A Korea Electric Power Corp (KEPCO) subsidiary has been given conditional permission to enter the telecom market, a decision which could have major repercussions on the telecoms industry in the country. The Ministry of Information and Communication ruled that Powercom, a wholly- owned subsidiary of KEPCO, may be given a conditional permit to operate a line leasing business.
If a final go-ahead is given at the end of next month, Powercom could enter the line leasing market as early as next year, breaking the monopoly held by Korea Telecom (KT).
As a condition of giving the license, the ministry stipulated the state-run power company sell off 66% in Powercom by next June and the remaining 34 percent by 2002. Powercom will use the optical cable network currently owned by KEPCO, the only nationwide cable network outside of Korea TelecomÆs.
An early casualty could be Thrunet, the internet service provider which had a highly successful debut on the Nasdaq exchange earlier this month, giving US investors direct access to the Korean internet for the first time. Thrunet leases KEPCO’s optical cable network at cost price in a special deal with the electricity company which is one of its shareholders.
An independent Powercom would certainly want to charge market rates, particularly as it is likely to end up being controlled by an existing telecom operator or line leasing operator.
