On Second Thought, SK Telecom Getting Out Of The Handset Business
By Mike Masnick, Wed May 04 00:15:00 GMT 2005

Less than a year after saying it was going to make more of its own handsets, SK Telecom has decided to go in the other direction.

Last summer, SK Telecom started making noises about how it wanted to buy more handset makers. The company already owned SK Teletech, which makes handsets, but was hoping to expand that further by picking up some smaller handset makers. The thinking appeared to focus on the growing question of customer ownership. While it had appeared that mobile operators were winning the battle over customer ownership, there were still some questions concerning how the handset makers would respond. While this issue still isn't completely settled, it appears that SK Telecom has decided that owning everything just doesn't make sense.

Not only did the company eventually decide not to buy more handset makers, it's now selling most of its stake in SK Teletech to Pantech & Curitel Communications Inc.

In some sense, SK Telecom has realized that in getting rid of the handset division, the company may get the best of both worlds. It still has a stake in SK Teletech, and will work with Pantech & Curitel to design new handsets for future operations -- with specific emphasis on the new SK Earthlink effort in the US. This way, it still has a strong say in the handsets being offered, without having to worry about that side of the business. This deal lets Pantech & Curitel focus on the core competence in handset design and manufacturing while still allowing SK Telecom to own the customer relationship.

Of course, eventually, this relationship could become troublesome. Historically, Curitel manufactured phones on an ODM basis, allowing others to own the brand. However, late last year, the company decided to begin emphasizing the Pantech brand, especially in the US. Either way, this suggests that the operators are increasingly comfortable with their position in owning the relationship with subscribers, and are less afraid of handset makers exerting their own brand and taking over some of that ownership for the time being.