April 24, 2024

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[THE INVESTOR] SK Telecom is facing a police investigation for damaging cable ducts installed by its domestic rival KT for the broadcasting system of the PyeongChang 2018 Winter Olympics, which kicks off on Feb. 9. 

According to police and KT, four employees of SK Telecom and its contractor allegedly damaged three cable ducts installed underground in Daegwanryeong in PyeongChang, Gangwon Province, for use by the International Broadcasting Center, a temporary hub for broadcasters during the event. KT is the official telecom partner of the PyeongChang Olympics. 

The SKT officials are accused of severing the ducts and installing their company’s optical cables in place, spanning some 6 kilometers.

KT has filed a report against SKT for business obstruction and property damage with the prosecution and the case has been handed over for investigation by the local police.

KT said its officials found damage to the cable ducts at a location some 42 meters away from the International Broadcasting Center building, and that SKT’s red optical fiber cables were inserted into the ducts built by KT.  

“It is very unfortunate to experience such a dishonorable incident ahead of the international event,” KT said in a press release. “Police will soon embark on an investigation.”

SKT, South Korea’s largest mobile operator by revenue and number of subscribers, downplayed it as a common error.

“It is just part of a frequently occurring practice in the industry,” a SKT official told The Korea Herald.

“The company was not aware that the cable ducts were built by KT,” he said. “When our employees found the ducts, they were empty.”

SKT also reportedly argued that the action was pre-discussed with the Olympic Organization Committee.

The committee, however, said that there was no such discussion and that the use of the cable conduit was not an issue subject to negotiation. SKT has since announced it has repaired the damaged ducts. 

The ducts in question were installed by KT between September 2015 and August this year as part of a telecommunication network spanning 333 kilometers across 12 stadiums and five nonstadium venues. KT has reportedly spent some tens of billions of won on the project. The infrastructure officially belongs to the Olympic Broadcasting Services, which has the absolute rights of broadcasting the sports event.

“The location where we found the damage is not supposed to be built for ordinary users, which makes SKT’s claim nonsense,” a KT official said. “These cables are planted for broadcasting the Olympic Games.” 

SKT is currently awaiting approval from the International Olympic Committee and Gangwon Development Corp. to establish network facilities for Olympic visitors who have subscribed to SKT services. 

“The cable incident was just part of our preparations for a better telecom service for the Olympics for our own subscribers,” the SKT official added. “KT found the problem in late October and the two companies have been communicating to address the issue for a given period of three months. Such legal action was not expected.”  

The two mobile carriers have been in fierce rivalry for years in the Korean market, where telecom firms are limited to three. The other one is LG Uplus.

“SKT is apparently engaging in tactics to find some niche where it can capitalize on the Olympic Games,” an industry source said. “If it gets bolder as the opening of the Olympics approaches, the IOC may take some action.” 

By Song Su-hyun/The Korea Herald (song@heraldcorp.com)