Atlanta-based EarthLink, SK Telecom form wireless joint venture

<p>Internet service provider EarthLink Inc. and South Korea's largest cell phone carrier, SK Telecom Co., have agreed to form a joint venture to sell wireless voice and data services popular in Asia to the United States.</p><p>The venture, SK-EarthLink, will lease network capacity from Sprint Corp., which has signed a range of similar deals with companies wanting to launch their own brand of cell service. These include Virgin Mobile, Qwest, AT&T, and ESPN.</p><p>The partners are investing $440 million, and each will own 50 percent. EarthLink founder and chairman Sky Dayton, will be chief executive of the new company. The deal is expected to close in March.</p><p>To start, SK-EarthLink will sell services that are already offered by Atlanta-based EarthLink for devices like BlackBerries and Treos, as well as wireless laptop Internet access cards.</p><p>In time, however, the company aims to introduce some of the cell phone services now popular in South Korea, such as music, video streaming, real-time traffic information and even a GPS-based system for pinpointing friends' locations.</p><p>Rather that take direct aim at powerful U.S. carriers, SK-EarthLink will attempt carve out a niche by bringing "a completely different service" to technology-savvy consumers, Dayton said in an interview.</p><p>SK Telecom will bring considerable expertise to the task, since about 6 million of its 18.8 million Korean customers use a high-speed 3G, or third-generation, data network and 20 percent of its revenue comes from data services.</p><p>"They have a two-and-a-half to two-year lead on the carriers in the U.S.," Earthlink Chief Executive Garry Betty said.</p><p>The move offers EarthLink an opportunity to grow its revenue, which has been flat for some time. The company has struggled with a declining dial-up Internet access business, which it has offset with growing broadband business. To return to growth, EarthLink has been looking at wireless and telecom opportunities and has rolled out some services. But the partnership with SK Telecom is its most substantial move so far.</p><p>"They needed a way to start growing again. This is one way," said Jefferies & Co. analyst Youssef Squali.</p><p>SK Telecom has faced a saturated Korean market where seven in 10 people have a mobile phone and the company already controls more than half of the market. The company has need to look beyond its own back yard, and the United States is a large, growing market that's ripe for new services.</p><p>Earthlink shares rose 15 cents, or 1.5 percent, to close Wednesday at $10.43 on the Nasdaq Stock Market.</p><p>SK Telecom's U.S. shares fell 56 cents, or 2.7 percent, to $20.43 on the New York Stock Exchange.</p>

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