Internet access service provider EarthLink Inc. announced a joint venture with South Korean wireless telecommunications provider SK Telecom to market wireless voice and data services in the United States using a mobile virtual network operator model. The venture, which will be dubbed SK-EarthLink, is SK Telecom’s first foray into the U.S. market and will expand EarthLink’s wireless MVNO solution that launched with data services in 2000.
Under terms of the joint venture, both companies will own 50 percent of the operations and said they plan to provide $440 million in funds during the next three years. The venture expects to add 3 million net subscribers by 2009 and be generating approximately $2 billion in revenues.
EarthLink founder Sky Dayton, who also founded Wi-Fi integrator Boingo Wireless Inc., will serve as chief executive officer of SK-EarthLink, with each company also appointing three members to SK-EarthLink’s board of directors.
Dayton said the venture will focus on offering wireless data services using both CDMA-based third-generation and Wi-Fi networks when it begins offering service later this year as well as traditional voice capabilities. The company said it expects to take advantage of SK Telecom’s long history of operating advanced CDMA-based networks in South Korea.
EarthLink’s current 30,000 wireless customers will be transitioned to the new venture. EarthLink’s current wireless data service is offered through an unnamed mobile carrier.
Dayton did not reveal which operators it would use to offer its new MVNO services, though he noted that the deals had been completed and would be announced in the near future. Published reports indicated that the venture would use both Verizon Wireless and Sprint PCS’ networks.
Handsets for the venture will initially be provided by SK Telecom subsidiary SK Teletec, which provides handsets in South Korea, with additional handset vendors expected to be announced later this year.
