IMT-2000 selection race still far from over

by Yu Kyu-ha

KOREA, 6 July 2000 (JoongAng Llbo) - The number of hopeful companies vying to win the lucrative IMT-2000 licence (an international move to coordinate and standardize the next-generation in wireless communications using a larger 2 GHz bandwidth) has been limited to three companies. In order to be able to be still considered for the IMT-2000 operating licence, a company is required to make a staggering minimum amount of 1 trillion won or $893 million available to the 'Information Promotion Fund'.

On Wednesday, the Ministry of Information and Communication (MIC) met with leading members of President Kim Dae-jung's Millennium Democratic Party and the cabinet at the National Assembly reporting that the field of IMT-2000 candidates had narrowed, which has been a controversial and contentious issue ever since the project came into existence.

The Ministry plans to finalize their list of requirements for possible candidates after holding a second public hearing this Thursday as well as getting approval from the Information and Telecommunications Policy Council (ITPC), which is scheduled to meet on Saturday. The ministry will continue to accept applications from communications companies until the end of September and select the actual company or companies winning IMT-2000 designation by year's end. The licencee is expected to develop and put into service the necessary support technology so that service can start May 2002, just in time for the kickoff of the World Cup soccer games.

Suk Ho-ik, director at the MIC, explained that they thought three as the ideal number of candidates in order to minimize overlapping or excessive investment outlay while securing business deals in trying to edge out the competition.

One of the key issues of contention many have raised against the governement is the selection process itself and the minimum requirements demanded by the Ministry. The MIC, in addition to examining submitted business proposals, is also taking the 'donation' amount (minimum of 1 trillion won) into account in its decision process, making it similar to an auction in most respects. Companies must front at least 50 percent of this amount when they are finally awarded the IMT-2000 licence, and pay the remainder (including interest) over a ten-year period beginning from the year 2002. Suk pointed out that "shareholders of this company or consortium will have to fund the owed amount, with them recouping this money through increases in the company's stock value eliminating any doubts of giving any special treatment or privileges to any one company."

As to the technology platform, the Mic expects the selected IMT-2000 operator to be, in conjunction with companies of other countries possessing similar technology, primarily responsible for creating an "environment advantageous" for Korean companies wanting to use the IMT-2000 standard. The company is also expected to avoid any trade friction with the United States or any other country, and adopt both the synchronous (North American CDMA) and non-synchronous standards (European w-CDMA) in order to eliminate any negative outcomes from choosing one platform or the other. Yet, the MIC, even though pushing for a multi-standard platform, will leave this choice to the company awarded the IMT-2000 licence.

Meanwhile, telecom heavyweights like Korea Telecom, SK, LG and Hanaro Telecom, who were interested in winning the IMT-2000 licence, are protesting that the 'donation' amount listed by the Ministry is prohibitively high. Despite their words of protest, the group is rumored to be manoeuvring to create a consortium to put them in the running again.

Finally, for what exactly is this IMT-2000 2 GHz bandwidth intended? It is to be the next-generation in mobile communications system able to support the use of videophones and ultra high-speed Internet 139 times faster than presently available to mobile phone users. Unlike existing mobile phones in use, users will be able to call anywhere in the world without having to first subscribe to a 'roaming' service, presently a complicated and costly affair.

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