Web 2.0 Asia

CNBC reported Korea's #1 mobile carrier SK Telecom is in talks to acquire Sprint of the US. This is definitely not the first time SK Telecom was rumored to be interested in such a deal.

Should SK Telecom buy Sprint? I think so, given these:

1. SK Group has a fairly deep pocket and has a track record of hit acquisitions, so they will probably make this work right. Sprint is bigger than SK Telecom, but if we talk about the whole SK Group instead of SKT as a single company, it's a whole different story. This is relatively little known outside of Korea, but SK Group, Korea's #3 chaebol (after Samsung Group and LG Group), practically built itself through successful acquisitions. SK Telecom itself was an acquisition, and SKT has been quietly gobbling up content companies including Cyworld over the years. Of course there were some bad deals too (did someone just say Helio?), but you win some and you lose some, right? I believe there are more than enough # of smart guys at SK Group who will make sure a deal of this magnitude won't go sideways.

2. For SK Telecom, which is thriving in the Korean market but has been pretty much nonexistent outside the country, gaining an international presence is the name of the game. You can rule the Korean market as much as you want, but you're still limited to about 20-25 million subscribers range (Korean antitrust law demands SKT to keep its market share to about 50%). Sprint will give them a pretty nice presence in the ever-important US market, as well as a decent number of subscribers.

3. Sprint will be a much better platform on which SK Telecom can roll out advanced handsets and services, than Helio was. Remember Helio users (albeit very few) were quite happy with their slick phones and their ARPU was a whopping $80. SK Telecom can introduce interesting mobile services running on slick phones (such as the Samsung Instinct). Of course it will be a huge challenge to stack up against the iPhone and its app store.

But even if SK Telecom indeed buys Sprint, one thing they should never ever do is to try to inject Korean blood (human resource, corporate culture, services not localized enough, etc) into the American body. That doesn't work, and I'm sure everyone at SKT knows it by now very well, through their largely failed attempt to bring Cyworld to the US.