Internet service provider EarthLink Inc. said Wednesday that it agreed to form a joint venture with Korean wireless carrier SK Telecom to market wireless voice and data services in the United States.
The new company, to be called SK-Earthlink, will be a mobile virtual networks operator with EarthLink and SK Telecom contributing $220 million each over the next three years for equal stakes in the venture. Under terms of the agreement, EarthLink and SK Telecom will each appoint three members to the venture's six-member board.
The companies expect to close the deal in March 2005, and said their business plan forecasts that the joint venture could generate about 3 million net subscribers and revenue of about $2 billion by 2009.
SK Telecom has more than 18 million customers and over 50 percent of the mobile services market in South Korea. The Seoul-based company offers wireless voice and data products including interactive gaming, video streaming and location-based services.
EarthLink founder and director Sky Dayton _ who will serve as chief executive officer of the SK-EarthLink joint venture _ said, "In South Korea, kids on the street are using their mobile phones to listen to music, watch TV, video conference, locate their friends and access the Internet _ as well as make voice calls _ as opposed to the United States where the mobile experience is primarily about talking on the phone. Using emerging third-generation networks and harnessing the explosive growth of Wi-Fi, SK-EarthLink will take the wireless experience in the U.S. to a new level."
EarthLink shares rose 12 cents to $10.40 in morning trading on the Nasdaq National Market, while American depositary shares of SK Telecom fell 32 cents to $20.67 on the New York Stock Exchange.