SEOUL, Nov 9 (Reuters) - South Korea’s SK Telecom Co. (017670.KS) said on Friday it had allocated $70 million to inject into its U.S. mobile venture with Internet service provider EarthLink Inc. ELNK.O, effectively gaining management rights.
“SK Telecom has allocated $70 million out of the $100 million it had decided to invest in July,” a spokesman for the South Korean company told Reuters.
“With this additional injection, SK’s share in Helio will become higher than Earthlink’s and it will gain controlling rights in the company.”
SK Telecom and U.S. Internet provider Earthlink said in early July they would invest “up to $100 million” each to help their loss-making mobile joint venture.
In September, SK said it would invest another amount, up to a maximum of $200 million, to expand Helio’s subscriber base through handset and service development and marketing activities.
No decision has been made on the timing and the exact amount of the second investment, the SK spokesman said on Friday.
Helio was set up in 2005 and launched in 2006 to target the highly competitive U.S. market by going after young and technology-savvy customers.
SK said in September it did not expect Helio to draw further investment from either parent company and added Helio may join forces with a strategic partner if needed.
The South Korean company, which owns half of its home market, is keen to find growth overseas. It invested $1 billion in China Unicom Ltd.’s (0762.HK) bonds last year and converted them in August into a 6.6 percent stake in the Chinese company.
It also confirmed on Thursday it was considering a bid for a major stake in No. 2 broadband operator hanarotelecom 033630.KQ, a move that could broaden its reach into the broadband and media sectors.
Reporting by Marie-France Han; Editing by Elizabeth Fullerton