SKT Becomes First Korean Mobile Carrier in U.S.

Korea’s largest cell phone service provider SK Telecom has entered mobile telecom powerhouse the U.S.

SK Telecom on Tuesday said its U.S.-based joint venture Helio started offering mobile services throughout the U.S., the first time for Korean mobile service provider to foray into the world’s biggest market.

Helio was set up by SKT and Earthlink, the American Internet service provider, in January 2005 with each side owning 50 percent.

SKT expects Helio to sign up some 3.3 million subscribers there by 2009 and generate annual revenues of US$2.4 billion.


SKT’s entry into the U.S. market is also the first full-fledged commercial advance into an overseas market by a Korean carrier. SKT has made continuous attempts to go overseas since early 2000 but was only able to make limited advances into markets like Vietnam and Mongolia. Most nations consider fixed-line and wireless telecom services a key industry and a national asset they are loath to hand over to foreigners. SKT’s move thus represents an important milestone in its efforts to go global. If it is successful, it could help the company advance into emerging markets in Asia, where China and India are the biggest prize.

SKT plans to target Korean-Americans. Helio is headquartered in Los Angeles, where Koreans are concentrated, and will launch two bilingual Korean- English mobile phones. It initially charges only 10 cents per minute for calls from the U.S. to Korea. “We expect the 2 million Koreans living in the U.S. to play an important role in allowing Helio to spread throughout the country,” the company said.

SKT is pinning its hopes on its cutting-edge wireless Internet service, too. It plans to target young people by offering weather forecasts, traffic information, and sports and entertainment information to their phone and allowing them to search information on Yahoo and use its messenger service to send both video clips and text messages. It will also offer cell phone blog services free of charge no matter how much subscribers use them. That service too will be available in two languages.

But obstacles loom. The U.S. telecom market is saturated just like Korea’s and Americans are not nearly as enthusiastic about wireless Internet services on their phones as Koreans and Japanese. That explains why cheap, simple cell phones introduced by Nokia and Motorola, the world’s no 1 and no 2 makers, are hugely popular there.

“SKT’s strategy has been to minimize its investment risk by leasing telecom networks owned by existing providers in the U.S.,” says Kim Kyung-mo, an analyst at Mirae Asset Securities. “The company’s ultimate goal will be to enter emerging markets in Asia such as India.”

(englishnews@chosun.com )