Ubistar acquires Onse in latest telecom move

The most recent change in the fixed-line telecommunications market is that Ubistar Co. has acquired the defunct fixed line service provider Onse Telecom Co. Yesterday, Ubistar ― a maker of communication equipment, such as GPS modules and navigation systems ― said that it received final approval from the Suwon District Court to take over Onse Telecom, which has been under court receivership since May 2003. In a court meeting, 99 percent of mortgage holders, 73 percent of bond holders and 66 percent of shareholders at Onse Telecom approved of Ubistar’s takeover plan, Ubistar said in a release. Those plans include selling Onse Telecom’s high-speed Internet business and focusing on telephone services, such as international phone services and voice over Internet protocol (VoIP) telephony. Ubistar also plans to focus on wireless data service and Internet portal TV sets. Ubistar signed a deal to take over Onse on May 23, after bidding for the company in late February. At the time, Ubistar said that the acquisition was worth 140 billion won ($145.7 million). The acquisition of Onse Telecom was significant in the telecommunications industry because it put in context the changes that fixed-line operators are going through. A number of changes have been taking place rapidly in the past few months, as saturation in the high-speed Internet market has been pushing companies to seek new profit engines. KT, the largest fixed-line operator, began WiBro, a mobile broadband service, and Hanarotelecom started “hanaTV,” a video on demand Internet portal TV service. Dacom and Powercomm changed their names to LG Dacom and LG Powercomm, implying a fresh start and more structured business. Founded in 1992, Seoul-based Ubistar has about 60 employees; sales as of last year were 72.5 billion won. Ubistar’s largest shareholder is its chief executive, Seo Choon-gil, who holds 10 percent. The second largest shareholder is Goldman Sachs, with about 9 percent plus 6 billion won in convertible bonds. The U.S. based investment fund DKR Oasis holds $30 million worth of convertible bonds. After rising almost 50 percent over the past four trading sessions, Ubistar shares closed down 6.8 percent yesterday at 2,060 won. by Wohn Dong-hee