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SK joins hands with EarthLink to tap U.S. market

Thu, 01/27/2005 - 7:00pm
Staff

Copyright 2005 Hankook Ilbo

Korea Times

January 28, 2005, Friday

From Lexis Nexis

SK Telecom, Korea's top mobile phone service provider, has forged an alliance with U.S.-based broadband operator EarthLink to make inroads into the North American market.

SK Telecom said Thursday the firm and EarthLink would each spend $220 million over the next three years to establish SK-EarthLink, a 50-50 venture start-up, which plans to deploy mobile telephony services in the United States from the third quarter.

"SK-EarthLink sets a target of drawing 3.3 million subscribers and achieving a $2.4 billion annual turnover by 2009 on the back of our advanced wireless data technologies," SK Telecom vice president So Jin-woo said.

So added that the hook-up would open the door for Korean cell phone manufacturers and contents providers to tap into North American market combined with their leading-edge technologies in wireless data services.

Atlanta-headquartered EarthLink, which has roughly 5.3 million high-speed Internet subscribers, echoed the significance of SK Telecom's ability in wireless data services in striking the deal "SK-EarthLink has the potential to reshape the mobile communications market by meeting the growing demand of U.S. consumers who are currently underserved by existing voice-oriented wireless operators," EarthLink president Garry Betty said in a statement.

SK-EarthLink, which will be led by EarthLink founder Sky Dayton, will launch its commercial services later this year under the mobile virtual network operator (MVNO) system by leasing pre-existing networks.

MVNO refers to a mobile service operator, which does not have its own licensed spectrum or network. Instead, it buys mobile capacity from network providers and signs up users under its own brand.

To date, the MVNO system has been introduced mostly in Europe and its presence was extended later to countries like Japan, Hong Kong and the U.S.

Korea also looks to phase in the format to its homegrown portable Internet, called WiBro, starting in 2009, three years after the service debuts next year.

SK Telecom, which has more than 50 percent of the Korean market with 18.8 million subscribers, has sought to extend its reach beyond the saturated local market.

Since the Seoul-based outfit made its first overseas foray back in 1999 in Mongolia, the firm has advanced to other Asian nations like China and Vietnam under its globalization plan.

The operator, however, has never tapped American nations. The deal with EarthLink represents its first strategic partnership to enter the U.S. market.

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