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South Korea: Dacom Teams Up With Skylife on Web Access, Digital Satellite TV

Posted on: Monday, 12 July 2004, 06:00 CDT

Text of report in English by South Korean news agency Yonhap

Seoul, 12 July: Dacom Corp, South Korea's second-largest fixed- line telephone operator, said Monday it will introduce a package of high-speed Web access, Internet telephony and digital satellite TV under an alliance with Skylife Co, to attract customers from competitors such as KT Corp and Hanaro Telecom Inc

The new service, to be released in October, will cost 23 per cent less than Dacom's broadband Internet and Internet telephony services.

It will also cost 20 per cent less than regular subscriber access at Skylife, South Korea's only operator of digital satellite broadcasting.

Broadband Internet companies such as KT and Hanaro Telecom have already allied with Skylife to offer package services that combine high-speed Internet and digital satellite TV to boost sales and reduce customer defections.

Dacom, 30.1 per cent owned by LG Corp, a holding company of the country's second-largest business conglomerate, is battling to revamp its loss-making telephone and high-speed Internet access businesses.

In the second quarter, Dacom reported 5.6bn won (4.8m US dollars) in net income on sales of 261.4bn won.

The results came after Dacom sold its headquarters to a local construction company for 102bn won as part of its restructuring efforts.

In a press conference last week, Dacom chief executive Jung Hong- shik said the company is targeting 2.8m subscribers by 2008 with its bundled services, but the plan has raised investor concerns about its competitiveness.

Dacom shares fell 2.71 per cent to 4,060 won at 12.45 p.m. on the country's main bourse. The company lost nearly half of its market value this year.

As of the end of May, Dacom has only 198,671 customers from its high-speed Internet service. That compares with KT's 5.5m and Hanaro Telecom's 3m.

"Given the broadband Internet market's saturation, it is difficult for Dacom to lure more customers with the bundled services," Yang Jong-in, a telecom analyst at Dongwon Securities Co, said.

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