SK Telecom is reported to be selling its mobile phone manufacturing division in China and is in negotiations with local firms for a sale. Reports state that the South Korean operator has refused to name potential buyers but said it plans to sell the division by the end of 2007. The company set up a joint venture company with Xinjiang Tiandi Group in March 2004 to manufacture SK branded CDMA mobile phones. The company formally entered the Chinese mobile market in April 2005 with the launch of two handsets. Local media reports claim that the business is being wound down because it has performed poorly in the past two years.
The move follows SK Telecom’s plan to acquire a 38.9 percent stake in Japanese broadband operator Hanaro Telecom for US$1.2 billion, announced this week. The company is also rumoured to have made an unsuccessful US$5 billion bid to acquire a stake in U.S. operator Sprint Nextel. Analysts have commented that the planned Chinese sale therefore reflects a shift from manufacturing to higher focus on global carrier operations.