Regulator to decide on KT-KTF merger next week

Korea’s telecommunications regulator said yesterday it will decide next week whether to allow KT Corp. to merge with its mobile service affiliate.

On Jan. 21, KT, the country’s top fixed-line and broadband Internet operator, asked that the Korea Communications Commission approve its merger with the second-ranked mobile carrier, KTF Co.

“A final decision will be made at a commission meeting scheduled for Monday,” a KCC official said, requesting anonymity.

KT controls some 90 percent of the country’s fixed-line telephony market and has over 12 million broadband Internet users. KTF commands a third of the nation’s mobile service market.

The KT-KTF merger is expected to create a communications giant that can compete with No. 1 mobile carrier SK Telecom, which also raised its business profile by acquiring No. 2 broadband operator Hanarotelecom Inc. last year.

Late in February, the Fair Trade Commission, the country’s antitrust regulator, gave its unconditional approval to the KT-KTF merger, saying it poses “no threat to other similar telecom operators.”

But rival companies, including SK Telecom, have been claiming the merger could hamper fair market competition as KT’s market dominance in fixed-line communications could spill over to the mobile sector.

Korea is one of the world’s most wired nations, with more than two-thirds of homes connected to high-speed Internet and more than nine out of 10 people owning a mobile phone.

As the nation’s telecom market becomes increasingly saturated, companies are trying to promote combined fixed and mobile services to cut costs and woo customers from rivals.

Yonhap