Satellite Sales
There is growing controversy as to whether or not KT sold its two satellites without the government’s approval. It is an important issue in that artificial satellites are regarded as strategic assets.
According to Rep. You Seung-hee of the main opposition Democratic Party on October 30, the KT Corporation sold the Mugunghwa-2 for 4.4 billion won (US$4.1 million) in January 2010 and the Mugunghwa-3 for 530 million won (US$499,790) in September 2011 to Asia Broadcast Satellite. Compared to the 4.57 billion won total sale price of both satellites, the investment costs were reported to reach 451.9 billion won (US$425.2 million).
Rep. You said that artificial satellites are export-restricted strategic items under the Foreign Trade Act. Therefore, any sales deal involving satellites must be approved by the Ministry of Science, ICT and Future Planning (MSIP), formerly known as Ministry of Knowledge Economy. In addition, approval from the Ministry of Science, ICT and Future Planning is needed under both the Telecommunications Business Act and the Radio Waves Act. However, it was reported that KT did not seek authorization from the government.
When asked about the issue, Korea’s second largest mobile carrier responded that the Mugunghwa-5 and Mugunghwa-6 replaced the old satellites, since they were no longer usable. Thus, the Mugunghwa-2 and Mugunghwa-3 do not qualify as strategic assets, according to KT. The company added that the sale was also inevitable, since the new satellites used similar frequencies as the old.
KT commented, “Apparently, Rep. You thinks that we sold those satellites very cheap, but it is not true. The two items were sold for much higher prices than those suggested by the lawmaker.”
The company plans to provide clarification on the issue as quickly as possible. However, the MSIP is reported to have already started examining the legality of the deals.