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South Korea Would Allow Greater Foreign Investment in Telecommunications Industry By Jaime Niņo
Jun 7, 2001

The South Korean Ministry of Information and Communications reported that the government has agreed to revise the country's telecommunications business law to allow more foreign investment in the country's telecommunications sector. At present, foreign investors can own as much as 49% of a local telecommunications company. South Korean companies can own as much as 100% of a telecommunications company.

The new regulatory framework will also allow South Korean telecommunications companies to diversify into electronic-commerce businesses without the approval of the information ministry. Currently, telecommunications companies have to get the minister's approval if they want to diversify into other businesses.

The government's move is partly in response to pressure from the International Monetary Fund and foreign investors to open South Korea's lucrative telecommunications industry to the international market. The revision of the current law also comes at a time when the government is trying to attract foreign investment in Korea Telecom Corp. As part of the government's privatization plan, the government pledged to decrease its stake in Korea Telecom, the country's biggest fixed-line telephone service provider. The government is the largest shareholder in Korea Telecom, with a 58% stake.

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