SEOUL—LG Telecom Co. Ltd.’s next move is unclear now that South Korea’s Ministry of Information and Communications has stripped the carrier of its third-generation license after the company chose to bail out on its promise to launch IMT-2000-based services, opting instead to pour its resources into CDMA2000 1x EV-DO Revision A equipment.
Compounding the problem, South Korean law dictates that LG Telecom’s chief executive, Nam Yong, must step down. Yong has been leading LG Telecom since 1998, but he’s expected to resign next week as he receives official notification of the license cancellation from the government.
LG Telecom’s license was yanked because the carrier failed to launch IMT-2000 services by June 30, which was a condition of its 3G license. The carrier, South Korea’s third-largest wireless operator, bought the IMT-2000 license in 2002, agreeing to pay $1.2 billion in government fees.
South Korea’s government left LG Telecom with few 3G options, having rejected the company’s bid to operate a W-CDMA network. LG Telecom’s rivals SK Telecom Co. and KT Freetel Ltd. received licenses to operate asynchronous W-CDMA services in 2000.
Over the past few years, synchronized IMT-2000 technology has fallen out of favor within 3G circles, while asynchronous W-CDMA technology has risen in popularity. To date, LG Telecom has paid about $231.5 million in fees over the buildout, but the government has reportedly said the company must pay another $105.3 million in fees after the cancellation.
