South Korean telecoms operator SK Telecom is on the verge of making a significant investment in satellite/terrestrial 4G-LTE wireless broadband venture LightSquared.
A spokesperson for the Korean telco confirmed to SatelliteFinance that the two companies…
South Korean telecoms operator SK Telecom is on the verge of making a significant investment in satellite/terrestrial 4G-LTE wireless broadband venture LightSquared.
A spokesperson for the Korean telco confirmed to SatelliteFinance that the two companies are currently holding discussions over SK becoming a shareholder, although the precise amount and terms of any deal have yet to be finalised.
The investment is, however, likely to be far higher than the US$100m that has been mooted by a number of media reports. On 26 May 2010, the SK Telecom board of directors conditionally approved an investment of up to US$1bn in Harbinger Global Wireless, which along with SkyTerra became LightSquared.
If the transaction is successful, it would mark the first return to the United States market for SK since it exited the country following the sale of its unprofitable US mobile joint venture Helio to Virgin Mobile USA in June 2008.
In spite of the failure of Helio, SK continues to follow a policy of international expansion, particularly given the relatively stagnant growth in its domestic market, where it and KT Corp dominate. Indeed, in order to counter KT Corp’s increasing competitive threat, SK announced in 2009 that it would construct its own nationwide LTE network that will be commercially launched in 2013.
Meanwhile, LightSquared has also reportedly secured a US$750m 4-year loan from UBS, the investment bank that is, alongside BoA Merrill Lynch, advising LightSquared on its financing options.
LightSquared director of corporate communications, Tom Surface, said that the company could not comment on the speculation. However, one banker told SatelliteFinance that it would be highly unlikely that UBS would provide such a facility, despite its relatively short term, on its own and that it is more likely that it would seek to syndicate it.
