Telecommunications In Korea Essay Research Paper INTRODUCTIONTelecommunications — страница 7

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code, protocol or similar aspects of a subscriber’s transmitted information, provision of additional, different or restructured information, and computer processing involving a subscriber’s interaction with stored information” (Jeong 4). The Understanding also illustrates the examples of value added services as follows: code or format conversion, protocol conversions, store and forward, facsimile communications which involve store and forward or one of the functions listed above, database, remote computer service, electronic mail, electronic data interchange, message handling service, value-added facsimile service and voice mail. Business Sectors Open to Foreign Investment With the enactment of the Basic Telecommunications Law and the Public Telecommunications Basic Law,

KTA and DACCA has provided only data communications, lease circuit, and international voice telecommunications services. For any additional services, MOC approval is required. General Service Providers are closed to foreign investment. In addition, no one shareholder may hold more than 10 percent equity interest in General Service Provider companies. Equipment manufacturers are not allowed to own more than a 3 percent equity interest in General Service Provider companies. Also under the Basic Telecommunications Law and the Public Telecommunications Basic Law, three Korean telecommunications companies, KMTC, KPTC, and KOTIS were licensed as Special Service Providers. Special Service Providers are open to one-third foreign investment. In addition no one shareholder, domestic or

foreign, may hold more than a one-third equity interest in any Special Service Provider company. No one equipment manufacturer or government-invested enterprise may hold more than 10 percent equity interest in Special Service Provider company. In August 1992, the MOC initially issued a preliminary license for mobile telephone services as a competitor of the Special Service company, KMTC. For the license, six consortia associated with eleven foreign concerns such as GTE, Hutchison, Bodafone, Bell Atlantic, U.S. West, Southwestern Bell, Swedish Telecom, Qualcom, Pactel, Mannesmann, Nynex and BT. Since the selected consortium returned the license to the MOC because of political turmoil involving the selected licensee, the MOC will issue another request for proposal within this year.

At the same time as the selection of the licensee for mobile telephone services, nine preliminary licenses for regional paging services were issued to nine consortia out of forty-one. Although foreign investment is allowed, no significant foreign service concerns were involved with the forty-one consortia except Millicom. As of February 1992, there exists 30 value added providers, 13 of which are joint venture companies. AT&T, IBM, EDS, and AMCOR from the United States maintain a minority interest in their joint ventures with Korean partners. Out of 30, only 4 Value Added Service Providers are registered to provide international value and services. These companies are Asiana Air, STM (joint venture between Goldstar and EDS), SDS (joint venture between Samsung and IBM), and

Trans World Net (Joint venture with Global Communications). In contrast to the telecommunications services, foreign investment in manufacturing telecommunications equipment may be freely made without any restrictions on foreign equity ratio, etc. For example, Motorola has maintained a wholly-owned subsidiary for manufacturing equipment in Korea. Such investment, however, must pass through the Ministry of Finance (MOF) approval process under the Foreign Capital Inducement Law (FCIL) that is generally applicable. One issue related to the value added services is shared use of leased circuits. Currently, while the shared use of Network Service Providers’ domestic leased circuits for data communications is permitted without any restriction on the relationship among the users, the

shared use of Value Added Service Providers’ domestic leased circuits for voice communications, international leased circuits for voice communications, and international leased circuits for data communications is permitted only within the group of entities which maintains a close business relationship. The scope of close business relationship includes affiliates with 30 percent equity interest and business partners which account for 20 percent of the total value of transactions. Users of Network Service Providers’ services within the same close business relationship are free to attach exchange equipment. Currently only one end of a domestic leased circuit for data communications is currently allowed to be connected with the public Network Service Provider network.