South Korea’s SK Telecom and U.S. wireless carrier Sprint Nextel are in preliminary talks to form a strategic partnership to develop new handsets and services, says the Wall Street Journal.
The companies have discussed the idea of SK Telecom making a minority investment in Sprint, but they aren’t discussing an outright merger, according to the story. Last fall, Sprint rejected a $5 billion investment offer by SK Telecom and Providence Equity Partners.
SK Telecom formed a $440 million joint venture with Earthlink to create Helio, a mobile virtual network operator (MVNO), using capacity leased from Sprint. On June 27, 2008, Helio was acquired in an all stock deal by Virgin Mobile for a net acquisition price of $39 million – in stark contrast to the $500 million investment in the venture.
SK Telecom now has a 17% ownership in Virgin Mobile USA, exchanging full Helio shares into a stake in Virgin Mobile USA and making a strategic investment in the company. SK Telecom, the largest mobile operator in South Korea with a 50% share, and Hanaro Telecom, are also rolling out WiBro/WiMAX nationwide in South Korea.
Competitor Korea Telecom has aggressively pushed WiBro service in South Korea, attracting some 150,000 subscribers. However, the Korean government allowed only data service through WiBro – not voice – limiting the potential market. KT hopes to have 400,000 WiMax subscribers by the end of this year.
SK Telecom is building out Wave 2 WiBro in Seoul and has sent HD video across the network in real time. Under optimal conditions it downloaded at 37 Mbps and uploaded at 10 Mbps. SK Telecom has generally been less enthusiastic about WiBro than KT since SK is also a cellular carrier.
