UPDATE 1-S.Korea KT to offer Google's Nexus One smartphone

Sun May 30, 2010 11:45pm EDT

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SEOUL, May 31 (Reuters) - KT (030200.KS), South Korea's top fixed-line operator and No. 2 mobile carrier, said on Monday it would offer Google's (GOOG.O) Nexus One smartphone from late June, building on its success with Apple's (AAPL.O) iPhone.

As mobile operators pin big hopes on smartphones to boost wireless data usage and revenue, KT has enjoyed an early lead with iPhone's popularity and its own broad WiFi network.

But it faces growing competition from bigger mobile rival SK Telecom (017670.KS), which is expected to gain on a smartphone drive with Android phones, especially from Samsung Electronics (005930.KS).

South Korean smartphone users jumped to about 2 million at end-May from just 200,000 in June last year, according to KT.

To maintain the smartphone momentum, KT has to continue bringing in successful devices and strengthening its network and software support, while dealing with government moves to cap telecom companies' marketing spending.

KT CEO Lee Suk-chae said the company planned to set up a company to sell and lease mobile WiMAX telecom equipment jointly with Samsung Electronics, Intel Corp (INTC.O) and financial investors.

The new company, expected to be launched in August with 320 billion won ($268 million) in capital, will provide WiMAX gear for KT's coverage expansion for the high-speed wireless Internet.

KT is also working to introduce mobile WiMAX business in South America and Africa, Lee said.

"We will continue to invest in WiFi and Wibro (mobile WiMAX) networks to build on our leading position in networks," Lee told a news conference.

"We will also target global markets with smart technologies," he said, referring to network technologies used in building energy-saving power grid and other advanced infrastructure.

KT has made no decision on whether or when it will introduce Apple's next iPhone model, Pyo Hyun-myung, mobile business group president, told the conference. ($1=1194.5 Won) (Reporting by Rhee So-eui; Editing by Nick Macfie)

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