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SK Telecom to be split into two, holding company to oversee non-mobile biz

Karim Husami

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SK Telecom to be split into two

South Korea’s largest mobile carrier SK Telecom Co. will split into two separate entities. It said it will create a new holding company for its non-mobile subsidiaries to accelerate growth in promising fields and tighten its grip on its chipmaking unit, SK Hynix Inc.

The horizontal spin-off is aimed at increasing enterprise and shareholder value, the operator said. The plan will leave the surviving company focused on its telecom business (tentatively named ‘AI & Digital Infra Company’) and the spin-off company taking over the memory business and new ventures (tentatively named ‘ICT Investment Company’).

Surviving entity

After the spin-off, SK Telecom will be divided into a surviving entity that will succeed its telecom business as a mobile network operator (MNO), and a new entity that is essentially an investment firm to seek new opportunities in non-telecom sectors.

The telecom operator’s spinoff plan had been widely expected after CEO Park Jung-ho said in a shareholders meeting last month that the company would overhaul its governance structure amid a slump in its share price in recent years.

SK Telecom’s share price had been in stalemate at the end of 2020 from the previous year at 238,000 won.

While SK Hynix has made active investments in the past, such as acquiring Intel’s NAND memory business in October last year for US$9 billion, its parent SK Group wants to tighten its grip on the chipmaker and help it aggressively expand investments.

The remaining entity will focus on the mobile carrier’s traditional telecom business and expand to new sectors, such as artificial intelligence and data centers.

The mobile carrier said it will decide on the details of the spinoff within the first half of this year.

Areas of interest

SK Telecom’s surviving entity will focus on artificial intelligence (AI) and digital infrastructure in addition to its current mobile and network businesses.

The entity will have SK Broadband Inc., the Internet service provider, as a subsidiary and will continue the current telecom and IPTV businesses.

The surviving company will also expand into a number of new areas such as cloud, data center and AI-based subscription segments. 

No merger

The latest announcement comes as the mobile carrier’s non-mobile subsidiaries have rapidly grown to account for 24 percent of the company’s total operating profit last year.

The subsidiaries have also formed global partnerships to boost their presence in the local market, with T Map Mobility joining hands with U.S. ride-hailing firm Uber Technologies Inc. to form a taxi-hailing joint venture in South Korea.

11Street has teamed up with Amazon.com Inc. with plans to offer the U.S. retail giant’s products to South Korean consumers.

SK Telecom is also preparing initial public offerings for app market unit ONE Store as well as security firm ADT Caps Co.

While analysts have speculated that the corporate revamp would eventually lead to a merger between SK Inc., the holding company for SK Group, and SK Telecom’s new holding company to elevate the status of SK Hynix in the conglomerate, the mobile carrier rejected the claim.

“There are no plans for a merger,” SK Telecom said in a statement.

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Journalist for 7 years in print media, with a bachelor degree in Political Science and International Affairs. Masters in Media communications.

Telecoms

Telstra announces $157 million co-investment fund to extend coverage

Karim Husami

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Telstra announces $157 million co-investment fund to extend coverage

Australian operator Telstra has announced a $157 million co-investment fund to generate additional investment in expanding regional mobile coverage.

This funding is in addition to the $118 million that Telstra plans to invest in the next 12 months to expand regional connectivity.

Telstra CEO Andrew Penn said the co-investment fund would run over the next four years and was aimed at enhancing and extending mobile coverage through stimulating infrastructure co-investment with governments, local councils and businesses in areas that would otherwise be difficult to justify on economic grounds.

“Technology is going to play a major role in meeting both of these aspirations – perhaps the most important role. Telecommunications technology is continuing to advance from 3G to 4G, 4G to 5G, from ADSL to NBN and from copper to fibre, satellite and mobile, and this is helping to bring new solutions to solve old problems,” he said in a statement.

Penn added: “In addition to the newly announcement co-investment fund, Telstra would be investing a further AUD 150 million ($118 million) over the next 12 months to improve its regional networks in a number of important areas.”

Both the $118 million and $157 million allotments are both backed up by a number of projects that has been awarded by the federal government, the telco claimed.

This includes the Regional Connectivity Program — which is set to receive $19.3 million in additional funding by the government in the upcoming Budget for 2021-22 — with Telstra working with the federal government to power $43 million worth of network upgrades.

Penn also claimed it was the only major mobile provider to both win projects and commit funding to improve services.

He said the telco has also participated in the federal government’s Mobile Black Spot Program, with it contributing “more than double the capital investment of the rest of the industry put together to build more than two thirds of the mobile black spot towers in the program,” he claimed.

Among the projects are eight mobile coverage improvements from Telstra, two mobile coverage upgrades from Pivotel, three projects upgrading fixed wireless coverage, two improving satellite broadband connectivity, and one project more than $2.53 million to shift from satellite coverage to fiber to the premise in Halls Creek.

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Three Chinese telcos to be delisted from NYSE

Inside Telecom Staff

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Three major Chinese telcos said late last week that they will be delisted from the New York Stock Exchange (NYSE) after the latter denied their requests for appeal, Reuters reported.

The delisting comes in line with the U.S.’ Communist Chinese military companies (CCMC) under the National Defense Authorization Act of 1999, enacted by the former Trump Administration.

The CCMC designation bars any U.S. investors from purchasing any shares or stakes from companies that the government considers to be linked to the Chinese military.

The three telcos – China Mobile, China Unicom, and China Telecom Corp – had filed an appeal request to the NYSE to review their delisting as soon as U.S. President Joe Biden was sworn in as the 46th president back in January.

The telcos noted in separate statements last week, that they expect the NYSE to notify regulators of their delisting after the appeal was rejected.

According to Reuters, the companies had highlighted that the delisting will become effective ten days after the exchange files a Form 25 to the U.S. Securities and Exchange Commission.

The three telcos join the likes of Huawei and ZTE who have also been delisted – however, budget smartphone maker Xiaomi was able to escape the same fate after a U.S. federal judge rolled back the blacklisting on the company citing insufficient evidence that Xiaomi posed a national security threat.

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Telecoms

NY: Broadband cos paid for 8.5M fake net neutrality comments

Associated Press

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The Office of the New York Attorney General said in a new report that a campaign funded by the broadband industry submitted millions of fake comments supporting the 2017 repeal of net neutrality.

The Federal Communications Commission’s contentious 2017 repeal undid Obama-era rules that barred internet service providers from slowing or blocking websites and apps or charging companies more for faster speeds to consumers. The industry had sued to stop these rules during the Obama administration but lost.

The proceeding generated a record-breaking number of comments — more than 22 million — and nearly 18 million were fake, the attorney general’s office found. It has long been known that the tally included fake comments.

One 19-year-old in California submitted more than 7.7 million pro-net neutrality comments. The attorney general’s office did not identify the origins of another “distinct group” of more than 1.6 million pro-net neutrality comments, many of which used mailing addresses outside the U.S.

A broadband industry group, called Broadband for America, spent $4.2 million generating more than 8.5 million of the fake FCC comments. Half a million fake letters were also sent to Congress.

The goal of the broadband industry campaign, according to internal documents the attorney general’s office received, was to make it seem like there was “widespread grassroots support” for the repeal of net neutrality that could give the FCC chairman at the time, Ajit Pai, “volume and intellectual cover” for the repeal.

The agency is supposed to use the comments it receives, from industry and public-industry groups and the public, to shape how it makes its rules.

The FCC did not immediately answer how or if it has changed its commenting process, but the acting chairwoman, Jessica Rosenworcel, said in a prepared statement that “widespread problems with the record” of the 2017 proceedings “was troubling at the time” and the agency has to learn and improve the commenting process.

The fake comments had high-profile victims. In 2018, two senators, Democrat Jeff Merkley of Oregon and Republican Pat Toomey of Pennsylvania, said their identities were stolen to file fake comments for the net neutrality proceeding. “We were among those whose identities were misused to express viewpoints we do not hold,” they wrote to the FCC’s then-chairman, Pai, asking him to investigate the fake comments.

Many expect the FCC to try to reinstate net neutrality rules once a third Democratic commissioner is appointed. The agency is currently split half Democrat and Republican, which makes undoing the repeal unlikely.

Broadband for America’s website says its members include AT&T and Comcast as well as major trade groups for the wireless, cable and telecom industries.

The campaign hired companies known as lead generators which created the fake comments, but that the attorney general’s office had not found evidence that the broadband companies had “direct knowledge of fraud” and thus they had not violated New York law, according to the report.

Still, the report criticized the broadband industry group’s behavior as “troubling,” saying the campaign organizers ignored red flags and hid the broadband industry’s involvement.

The lead generators copied names and addresses they had already collected and said those people had agreed to join the campaign against net neutrality, the report said. One company copied information that had been stolen in a data breach and posted online.

The attorney general, Letitia James, also announced agreements with three of the companies that were responsible for millions of the fake comments, Fluent Inc., Opt-Intelligence Inc. and React2Media Inc., that require them to change practices in future advocacy campaigns and pay $4.4 million in fines. The companies did not reply to requests for comment.

The attorney general’s office and other law enforcement agencies are still investigating “other responsible parties,” according to the report.

AT&T, Comcast and industry trade groups NCTA and USTelecom did not respond to questions.


By TALI ARBEL AP Technology Writer.

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