As Korea marks the 30th anniversary of the world's first commercial CDMA (Code Division Multiple Access) service, attention is turning to the history of SK Telecom (017670.KS), the company that led the "CDMA miracle." While many believe SK Group acquired SK Telecom during the Roh Tae-woo administration, the acquisition actually took place under the Kim Young-sam government.
Sunkyong (now SK Group) acquired Korea Mobile Telecom (now SK Telecom) in January 1994, during the Kim Young-sam administration. Under the Roh Tae-woo government, Sunkyong had participated in the selection process for the second mobile carrier and won the license by an overwhelming margin. However, facing political backlash and public pressure, the company voluntarily returned the license just one week later. Subsequently, during the Kim Young-sam administration, Sunkyong acquired SK Telecom through a public privatization bid for Korea Mobile Telecom.
Sunkyong began seriously preparing to enter the telecommunications business in the early 1980s. The late Chey Jong-hyun, former SK Group chairman, who was contemplating the group's future business direction for the next decade, designated information and communications as the group's future business area. While Samsung had claimed semiconductors and LG had taken home appliances as their new businesses, telecommunications faced less competition from existing players and offered significant growth potential. Sunkyong established a telecommunications team within its Americas Business Planning Office and founded Eucronics in the United States in 1989. In 1990, it established Sunkyong Information Systems with U.S. IT company CSC, followed by Sunkyong Telecom in 1991.
SK Telecom maintains there was no favoritism in its selection as the second mobile carrier during the Roh Tae-woo administration. In his memoir, former President Roh claimed that neither he nor the Blue House was involved in the selection process. He said he instructed Song Eon-jong, then Minister of Communications (now Ministry of Science and ICT), to proceed according to his own judgment but to be strict enough that no suspicions would arise even during parliamentary hearings.
In April 1992, the Ministry of Communications announced applications for the second mobile carrier license, and Sunkyong Telecom changed its name to Daehan Telecom in June of that year to participate in the bidding. Six consortiums competed, including Pohang Iron & Steel (POSCO), Kolon, Dongyang, Ssangyong, and Dongbu. Former President Roh mentioned that while Sunkyong's mobile communications capabilities far exceeded those of other companies, the company's special relationship with him escalated into a political issue, ultimately leading to the return of the license.
Indeed, official correspondence sent from President Roh Tae-woo's secretariat to Sunkyong at the time contained the Blue House's recommendation to return the license. Just one week after Sunkyong was selected as the operator in the second mobile carrier competitive bid, on August 27, 1992, the Blue House sent an official letter titled "Recommendation Regarding Mobile Phone Business" to the president of Daehan Telecom (now SK Telecom), under the name of Chung Hae-chang, then Chief Presidential Secretary. Ultimately, it is known that Sunkyong had to voluntarily return the second mobile carrier license it had legitimately obtained through proper procedures in 1992, due to its in-law relationship with the president, just one week after winning it.