Pantech aims to be No. 6 in world cell phone market

Jon · Korean Citizen Joined: Mar 19, 2004 Posts: 510

MOSCOW - Europe is the key to Pantech's drive to become one of the top six mobile phone makers in the world, says Lee Sung-kyu, president of the Korean manufacturer.

"We expect to hit around 20 million in shipments for this year, thus making us the world's sixth-largest cellular phone manufacturer in terms of production. We expect the GSM-based European market as our most important growth opportunity," said Lee at a news conference held in Moscow yesterday.

GSM, global system for mobile communication, is the dominant digital mobile phone standard for most of the world. It determines the way in which mobile phones communicate with the land-based network of towers.

Lee arrived in Moscow to represent Pantech at the annual SVIAZ/Expo Comm Moscow 2004, Russia's largest telecom and information technology exhibition that runs through May 15. More than 200 companies registered for this year's event, including multinational giants such as Intel Corp. Nokia, Siemens AG, and Samsung Electronics Co.

Pantech is the Korea's third-largest cellular phone maker behind Samsung Electronics and LG Electronics, posting 615 billion won ($559 million) in revenue last year. Pantech expects total overseas sales to reach 15 million units this year, with its domestic sales hitting 5 million compared to last year's 3.18 million.

While most of Pantech's sales going to highly competitive Asian markets, including China, Taiwan and Thailand. the company is looking to Europe for new sources of revenue.

Lee said the Russian market would be a critical starting point and strategic test site for the company's expansion to Eastern Europe, which is one of the most rapidly growing mobile companies in the world.

Pantech began sales in Russia in January and says that it has sold more than 400,000 units of its four GSM-based models through April. With 12 new models scheduled for release in the second half of the year, Pantech expects to sell more than 1 million units this year in Russia, taking 8 percent of the projected market.

"We are betting on Russia's huge upside potential in the telecom industry, which is already one of the fastest growing markets in the world. We believe that Pantech will be the major handset provider in Russia somewhere down the road along with Korean competitor Samsung Electronics, which has similar initiatives towards the European GSM market," said Lee.

Russia's wireless population has been increasing by an average of 100 percent since 1999, with 21 million cellular phone users tracked in 2003. The Russian government estimates the number to hit 34 million by the end of this year. However, with most of the penetration heavily centered in Moscow and St. Petersburg, the country's telecom market is considered largely underdeveloped and has been a hot attraction for foreign high-tech investors in the recent years.

Siemens of Germany is the top mobile phone seller with control of 31 percent of the market, followed by Finland's Nokia at 21 percent and the Japanese-Swedish pairing of Sony Ericsson at 16 percent. Korea's Samsung Electronics, the world's third-largest cellular phone manufacturer, has a 7 percent market share.

"Despite already being a large market, Russia's mobile penetration rate is still below 17 percent, leaving a lot of room for additional demand. Considering that the trade regulations or licensing process is lighter than other foreign markets in comparison, we believe that our advancements in technology will give us a competitive edge here," said Lee.

(thkim@heraldm.com)

By Kim Tong-hyung Korea Herald Correspondent