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Press Release
Acquired 49% share in Daghestan Cellular Network by supplying analogue equipment to the Daghestan Republic
Stepping stone to build presence in the Russian and CIS mobile service markets
SK Telecom is entering the Russian and CIS mobile market that is considered to have enormous growth potential.
SK Telecom said that it had signed a mobile service provision agreement with the Daghestan Cullular Network (DCN), the sole provider of mobile service in the Daghestan Republic, one of the 89 autonomous republics that is located in the coast of the Caspian Sea. Service starts on November 29 under the agreement, said the company.
Under the agreement, SK Telecom provided analog equipment in exchange of a 49% share in the Daghestan mobile carrier, and will participate in the management of the company as the second largest shareholder.
Myung Ook Park, head of the Overseas Business Division of SK Telecom said, ?Because we could minimize the cost of market entrance by trading our surplus equipment for shares, we expect to be able to stabilize the operation at an early stage. We also expect the agreement to lay the groundwork that is needed for us to enter the Russian and CIS markets where less than 1% of the population is using cellular phone.?
He added, ?We are looking at a plan to jointly provide the 2nd generation CDMA service with DCN?s parent company Dagsvijazinform?
Dagsvijazinform, sole provider of phone services, founded DCN in 1996 to offer mobile service. It had provided analog services using AMPS equipment by Samsung Electronics Company but stopped receiving new subscription due to limited system capacity as Samsung discontinued the product completely.
SK Telecom said that it was perfect timing to make a new investment and the goal of hitting the 100,000-subscriber target by 2005 would be easily accomplished considering the country?s low penetration rate given the size of the economy or the income level.
The Daghestan Republic has the population of 2.5 million and is richly endowed with natural resources. Particularly once the large-scale oil fields recently found in the Caspian costal region begin to produce oil, the Republic is expected to become one of the most rapidly developing countries in the region.
SK Telecom said that it had signed a mobile service provision agreement with the Daghestan Cullular Network (DCN), the sole provider of mobile service in the Daghestan Republic, one of the 89 autonomous republics that is located in the coast of the Caspian Sea. Service starts on November 29 under the agreement, said the company.
Under the agreement, SK Telecom provided analog equipment in exchange of a 49% share in the Daghestan mobile carrier, and will participate in the management of the company as the second largest shareholder.
Myung Ook Park, head of the Overseas Business Division of SK Telecom said, ?Because we could minimize the cost of market entrance by trading our surplus equipment for shares, we expect to be able to stabilize the operation at an early stage. We also expect the agreement to lay the groundwork that is needed for us to enter the Russian and CIS markets where less than 1% of the population is using cellular phone.?
He added, ?We are looking at a plan to jointly provide the 2nd generation CDMA service with DCN?s parent company Dagsvijazinform?
Dagsvijazinform, sole provider of phone services, founded DCN in 1996 to offer mobile service. It had provided analog services using AMPS equipment by Samsung Electronics Company but stopped receiving new subscription due to limited system capacity as Samsung discontinued the product completely.
SK Telecom said that it was perfect timing to make a new investment and the goal of hitting the 100,000-subscriber target by 2005 would be easily accomplished considering the country?s low penetration rate given the size of the economy or the income level.
The Daghestan Republic has the population of 2.5 million and is richly endowed with natural resources. Particularly once the large-scale oil fields recently found in the Caspian costal region begin to produce oil, the Republic is expected to become one of the most rapidly developing countries in the region.