Tuesday, July 7, 2009

More on KT and the Korea Communications Commission

The Korea Times reported yesterday that the Chairman of KT, Lee Suk-chae had gone "one up" on Choi See-jung, the Chairman of the Korea Communications Commission (KCC).  The article suggested that the relatively new KCC is already facing an identity crisis, and that the threat is coming from KT.  As noted in an earlier post, the Chairman of KT recently publicly questioned whether the KCC is the appropriate structure to "guide the country's information technology policies forward."
Last Thursday, the Ministry of Strategy and Finance announced plans to combine KT and state-run banks in a special purpose entity (SPE) to invest about $790 million in the network infrastructure for next-generation telecommunications services such as WiBro and Internet protocol television (IPTV).  An SPE is a legal entity owned by one or more organizations that is created to fulfill specific or temporary objectives. These entities are typically used when companies look to isolate themselves from financial risks on large-scale projects.
The problem is that Thursday's announcement by the Ministry of Strategy and Finance caught the KCC by  surprise.    KT officials noted that they have made no changes to their previously announced plans to invest in WiBro and IPTV.  However, they submitted the idea about the special purpose company to the finance ministry because "we were asked to come up with scenarios to help the economy and boost employment."

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