SK Telecoms Board of Directors approved the acquisition of 51.19%(81,899,545 shares) of Shinsegi Telecom shares from POSCO. The purchase will be done with about 1.09 trillion Won of cash together with about 6.5% of SKT shares. The contract will be signed tomorrow.

The transaction needs an approval of the Fair Trade Commission of Korea. SK Telecom currently has 42.7% of the cellular market share while Shisegi Telecom?s market share is 14.2%. In the fiscal year of 1998 SK Telecom recorded approximately 3.5 trillion won of revenue while Shinsegi reported about 1.3 trillion won as its revenue.

The two companies will operate as a separate entity for now.

SK Telecom expects to bring savings in the areas of capital expenditure, and marketing expenses. The deal will bring greater utilization of the current frequency bandwidth. Both companies use 800 MHz band for the cellular services. There has been some inefficiencies due to Shinsegi?s use of middle part of that spectrum, the acquisition will address that inefficiencies. Furthermore the deal will have positive impact on IMT 2000 licensing prospects of SK Telecom.