EarthLink, SK Telecom create virtual mobile operator

Internet service provider EarthLink Inc. and South Korean telecommunications company SK Telecom Co. Ltd. will launch a joint virtual mobile network operator in the U.S., called SK-EarthLink, the companies announced Wednesday.

The US$440 million, 50-50 joint venture will offer wireless voice and data services as well as handsets, the companies said.

SK Telecom, based in Seoul, sees the partnership as its gateway into the U.S. market and an opportunity to grow its worldwide subscriber base. The company can provide the joint venture with services such as interactive gaming, video streaming and location-based services, the companies said.

EarthLink, in Atlanta, has been actively extending its reach as a communications company since launching a wireless data service in 2000. The ISP has 5.2 million Internet customers.

EarthLink and SK Telecom said the joint venture could generate approximately 3 million net subscribers and revenue of around $2 billion by 2009.

Products using 3G (third-generation) networks and Wi-Fi technology will be announced in coming months, the companies said.

Under the terms of the three-year deal, which is expected to close in March, EarthLink and SK Telecom will each appoint three members to the six member SK-EarthLink board of directors.

SK-EarthLink will offer the services using network capacity bought from Sprint Corp. and Verizon Wireless Inc.

SK Telecom operates a nationwide CDMA (Code Division Multiple Access) network in South Korea and is one of the country's top two carriers. Sprint and Verizon operate CDMA networks in the U.S.

EarthLink already offers some wireless services although they are focused on mobile data offerings. It sells wireless modems for PCs that connect via Verizon's network and offers the Blackberry portable e-mail terminal though which voice calls can also be made.

(Martyn Williams, in Tokyo, contributed to this report).

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