South Korea's Fair Trade Commission has approved, with conditions, the proposal by wireless operator SK Telecom to buy a large stake in the country's second-largest broadband service provider for $1.15 billion, an Associated Press report said.
The Associated Press report said the deal is still subject to final approval by the Ministry of Information and Communication, which is scheduled to deliberate on the commission's recommendation.
The report also quoted analysts as saying the acquisition would allow SK Telecom to bundle mobile with fixed-line services, helping it retain mobile market leadership while extending its influence into fixed-line and broadband turf.
The conditions the trade commission imposed are intended to discourage a monopoly in the mobile, fixed-line and broadband service markets.
'SK Telecom's acquisition of Hanarotelecom is expected to limit competition in the telecommunications market,' the antitrust regulator said in a statement. 'So, we decided to order measures to address such issues.'
KT Freetel and other South Korean telecommunications companies had called for a rigorous government review of the market leader's proposed takeover of Hanarotelecom, saying the acquisition could hurt fair competition, the report said.
SK, South Korea's largest wireless operator by revenue, is seeking a 38.9% stake in Hanarotelecom. If it goes through, the deal will bring SK Telecom's stake in Hanarotelecom to 43.6%, making it the largest shareholder in Hanarotelecom, which also offers fixed-line services, the report further said.