EarthLink, SK Telecom Team for Cell-Phone Service

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Internet service provider EarthLink Inc. has teamed up with Koreas largest wireless operator, SK Telecom, in a $440 million joint venture to offer new wireless voice and data services and handsets in the United States, officials said Wednesday.

The new joint MVNO (mobile virtual network operator), to be called SK-EarthLink, will use the 3G CDMA (Code Division Multiple Access) networks of U.S. carriers, such as Verizon Wireless and Sprint, as well as Wi-Fi networks.

“We plan to leverage the systems and handsets of SK-Telecom, harnessing the emerging 3G [third-generation] and Wi-Fi networks of U.S. mobile operators, to bring a completely new wireless experience to market,” said EarthLink founder Sky Dayton, who will serve as CEO of SK-EarthLink.

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SK-EarthLink will focus on bringing to the United States some of the wireless voice and data services SK Telecom offers on handsets in Korea, such as using location-based services, watching satellite television, listening to music or video clips, and doing videoconferencing.

“Making phone calls will always be very important, but we see the value being on the data side and the types of things we can do with that,” Dayton said.

SK-EarthLink initially will offer converged e-mail and voice devices, such as Research In Motion Ltd.s BlackBerry. But by the end of this year, it will look to offer more advanced services, officials said.

As for handsets, SK-EarthLink plans to offer some of the next-generation handsets that SK Telecoms subsidiary SK Teletek already provides, as well as working with other handset providers.

Officials projected that SK-EarthLink will have about three million customers and $2 billion in revenue by 2009.

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The new venture initially will employ about 100 people, with plans to expand in the future, officials said. The new headquarters of SK-EarthLink have not yet been disclosed.

EarthLinks headquarters are in Atlanta, and SK Telecom is based in Seoul, South Korea.

Pending approval, the deal is expected to close in March 2005.

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