BT buys into South Korea

NEWS BT is continuing its long march into Asia's regional telecoms market with the purchase of a 23.49 per cent share of LG Telecom, South Korea's second largest telco. The investment, worth around $390m, gives BT a solid foothold in Asia's second largest telecoms market. In August, South Korea had just over 11 million subscribers to mobile phone services. Richard Slogrove, managing director of BT Asia Pacific, said: "Our investment into LG Telecom is among the most significant we have made in Asia." BT's investment is set against the backdrop of a deep economic crisis in South Korea. Under pressure from a weakened currency and depressed global markets, many local conglomerates are being forced to undertake strategic mergers and 'bargain-basement' asset sales to reduce the burden of their debt. The LG Group is said to be trying to generate around $6.5bn in foreign investment. In a market dominated by growth in the mobile telecommunications sector, LG Telecom has nevertheless shown aggressive expansion. Peter Bonfield, BT's CEO, said: "In the space of less than a year they have grown a customer base of about 1.5 million customers."
The share acquisition will also give BT access to LG Telecom's expertise in Code Division Multiple Access (CDMA) and GSM (Global System for Mobile Telecommunications) technology. South Korea is one of a few countries that has managed to launch commercial mobile phone services using CDMA digital transmission technology. BT's move follows a series of strategic investments elsewhere in the region. The company's $10bn alliance with AT&T is also thought to have accelerated the BT's Asian spending spree. Earlier this year BT spent $436m to acquire a 33 per cent stake in Malaysia's Binariang Telekom. That deal made BT part of telecommunications consortium (StarHub) that has gone on to win fixed and mobile licences in the lucrative Singapore market. Elsewhere in the Asia Pacific, BT has gained a foothold in the world's largest telecoms market - Japan - through an alliance with the Marubeni Corporation.