China Mobile Makes Initial Investment Of 283 Million Dollars For South Korea’s Fourth Telco Company
China Mobile has officially entered a consortium that bids to form South Korea's fourth telco.
According to Mobile World Live on June 29, the South Korean government announced in May that they will be accepting applications for a fourth mobile license to increase competition and reduce mobile tariffs, while the Ministry of Science, ICT and Future Planning (MSIP) plans measures to open opportunities for a fourth operator by establishing incentives.
"While existing mobile carriers turn their income sources to lending telecom network infrastructure, budget mobile phone services providers may develop their business models in advertisements from content applications," said a ministry official. "This will ultimately reduce the telecom expenses of ordinary customers."
The three telco companies that are currently operating in South Korea include SK Telecom with 50 percent of shares, KT Corporation with 30 percent and LG Uplus with 20 percent.
The world's largest telco by market value, China Mobile, has allegedly invested 320 billion won, approximately 40 percent in shares in the KT Net consortium, which is currently bidding to form the fourth telco in South Korea, reported ZDNet on Tuesday.
The government's effort to find the fourth telco has constantly been failing from lack of funds from bidders to date.
The KT Net consortium is set to raise 1.6 trillion won until the later date of the application where China Mobile plans to invest another 320 million won. Details and progress on the consortium agreement have all been included in the contract.
The consortium was established by South Korean locals after attempting for years to establish a fourth telco.
As of August, China Mobile currently has 820 million subscribers, with 229.2 million of them using TDD-LTE.
Once KT Net Consortium has been awarded the fourth spot for South Korea's telco companies, a TDD-LTE band between the country and China will automatically be formed to deliver free roaming services to users.
