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SK Telecom: No Plans to Buy Sprint

In a move meant to quell speculation, SK Telecom (Nasdaq: SKM) said Thursday it was not planning to buy a controlling stake in any U.S. wireless company.

The rumors began to swirl Tuesday after business channel CNBC reported that the Korean wireless company was seeking to purchase Sprint Corp. (NYSE: S). But later reports indicated that the two companies discussing a strategic partnership to develop new handsets and services.

"We are studying various business opportunities in the United States but are not seeking to take control in (any) major U.S. mobile operator," SK Telecom said in a filing with a Korean stock exchange. Additionally, SK Telecom is believed to be seeking to make a minority investment in the U.S. wireless company. Sprint had previously rejected a $5 billion investment offer from SK Telecom last fall.

A potential deal could benefit both companies, which use CDMA technology to run their networks, making a potential collaboration easier.

While Sprint is the third-largest U.S. wireless carrier with 53 million subscribers, it has been steadily losing customers and revenues. But, it has seen some success with the Samsung Instinct recently, and a partnership with SK Telecom could lead to more technologically-advanced handsets.

For SK Telecom, a deal would give the company another opportunity in the U.S. market. The Korean carrier had previously partnered with EarthLink Inc. (Nasdaq: ELNK) to roll out data-heavy phones under the mobile virtual network operator Helio Inc.

Despite critically acclaimed handsets like the Ocean, Helio attracted only 200,000 subscribers, and it was acquired by Virgin Mobile Virgin Mobile USA Inc. (NYSE: VM) for $39 million last month.

— Marin Perez, InformationWeek

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