Hanaro gets primary bid for Thrunet

Hanaro Telecom has been selected as the primary negotiator in the bidding for Korea Thrunet Co., Korea’s third-largest broadband Internet service provider. KPMG Samjong Accounting Corp., which is managing the sale of Thrunet, said yesterday that the Seoul Central District Court has selected Hanaro Telecom, the second-largest broadband company in Korea, as the prime negotiator. Hanaro beat out the consortium of Dacom and Merrill Lynch LP Holdings. Although the accounting firm did not disclose Hanaro’s offer, industry experts estimated it at 460 billion won ($433 million), about 60 billion won more than rivals’ bids. Once the negotiations are finalized and Hanaro Telecom takes over Thrunet, industry sources said the high-speed Internet market will be reduced to a race between Hanaro Telecom and KT, the biggest provider of high-speed Internet service in Korea. With the acquisition, Thrunet’s 1.2 million subscribers would boost Hanaro Telecom’s market share from 23 percent to 34 percent. Currently, KT dominates the market, with a 51 percent share. Dacom has a 1.7 percent market share. Hanaro is drawing up big plans after the purchase is complete. “If our company takes over Thrunet, we will make new investments in VoIP (voice over Internet protocol), Internet phones and expand business to mobile Internet and broadband television by 2006,” said a Hanaro Telecom official. As the primary bidder, Hanaro Telecom had to put down 5 percent of the offered price as a deposit. The final contract on the purchase is scheduled to be signed Jan. 13. The Dacom consortium will act as a backup bidder in case the negotiations with Hanaro Telecom fall through. Dacom was said to have aggressively pursued Thrunet, even giving up its bid for a government contract to start up a WiBro, or wireless Internet, business to do so. by Yoon Chang-hee, Lee Ho-jeong