Shareholders OK Merger of LG Group’s 3 Telecom Units
Shareholders of LG Group’s three telecom affiliates approved Friday a merger of the companies next year to better compete with two local telecom powerhouses.
A majority of shareholders of the three — mobile carrier LG Telecom, fixed-line operator LG Dacom and broadband Internet service provider LG Powercom — voted earlier in the day to allow LG Telecom to absorb the other two companies as of Jan. 1, 2010.
LG Group, one of South Korea’s leading family-run conglomerates, filed an application last month with the South Korean telecommunication’s regulator for permission for the move. The Korea Communications Commission will make the final decision by mid-December.
LG Telecom, the smallest mobile carrier in the market, competing with bigger rivals SK Telecom and KT, announced the merger plan last month. It said the move would help draw more subscribers as it would allow the company to provide fixed-line and mobile package services.
South Korea’s telecom industry is keen to develop services that bundle up fixed-line, wireless Internet, mobile and broadband access as companies compete for more subscribers in the country’s saturated market. Market watchers expect the introduction of wireless-fidelity (Wi-Fi) mobile devices to further accelerate the drive toward convergence services.
Once the merger goes through, the new LG Telecom is expected to become the third South Korean telecom giant with annual sales of more than 7.72 trillion won (US$6.65 billion) and an operating profit of over 690 billion won.
YonhapNewsAgency
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