hankyoreh

The top executive of LG Telecom Ltd., South Korea's smallest mobile carrier, expressed concerns Thursday over a recently announced takeover deal by its bigger rival SK Telecom Co. of a local broadband Internet operator.

The LG executive urged the government to take measures to guarantee fair competition.

"We are very concerned about the deal," Jung Il-jae, LG Telecom CEO, told a press conference, referring to SK Telecom Co.'s move to purchase a controlling stake in Hanarotelecom Inc., the nation's second-largest Internet service provider. "The government should consider ways to reduce anti-competitive market conditions that could be triggered by the takeover deal."

The remarks come after SK Telecom announced on Monday that it has signed an official contract to buy a 38.89 percent stake in Hanarotelecom for 1.08 trillion won (US$1.17 billion). The takeover deal is subject to government endorsement and SK Telecom said it is preparing the necessary documents.

Market observers say SK Telecom's tie-up with Hanaro will help strengthen its market dominance both in the mobile and fixed-line sectors at a time when the two services are rapidly converging.

Smaller operators, however, say that the consolidation could threaten their existence as SK Telecom could use its dominance in the mobile communications sector and in the fixed-line communications area where companies compete fiercely for customers.

SK Telecom is South Korea's largest mobile service provider servicing more than half of the total of 43 million handset users.

LG Telecom's market share stood at around 18 percent at the end of November.

Earlier in the day, four mobile and fixed-line players including LG Telecom, KTF Co. and LG Dacom Corp. called for the government to take measures to ease an anti-competitive environment that could emerge due to the SK Telecom-Hanaro deal.

Jung made the remarks at a press conference held in central Seoul where LG Telecom announced it will complete its third-generation communications network nationwide by the first quarter of next year, a move intended to provide speedy, seamless data service to its customers.

"Market conditions next year are expected to remain tough for LG Telecom as bigger players including SK Telecom will likely further consolidate their dominance," Jung said. "Against this backdrop, we will focus on providing affordable data service (through the network) to our customers."

SEOUL, Dec. 6 (Yonhap)