SK Broadband was pressuring its equipment suppliers to cut unit prices, people familiar with the matter said.
Negotiation has been “tight”, they told TheElec Thursday, since Choi Jin-hwan became CEO of SK Broadband. Talks that usually ended between March to April is still ongoing, they added.
Another person with direct knowledge of the matter said the SK Broadband was trying to improve its profits this year ahead of an IPO, leading to the pressure.
IPTV and internet service provider SK Broadband buys transceivers from Woorinet, Telefield and Coweaver, among others. It uses equipment from HFR, Dasan Networks and Deonet for its fiber to the x (FTTX). SK procures access points from Mercury Corporation and HFR.
SK Broadband is yet to start relevant procedures such as naming a security firm for an IPO, a company spokesperson. Solidifying finances was a normal activity conducted by any company, they added.
Park Jung-ho, CEO of SK Telecom which controls a 100% stake in SK Broadband, said at this year's annual shareholders' meeting that flotation plan initially slated for 2020 for the internet service provider will be delayed by a year.
SK Broadband posted 37.4 billion won in operating profits in the first quarter, near double that of 19.3 billion won from a year prior. SK Telecom said this was due to “efficient management of marketings.”
SK Broadband completed its merger with T-Broad last month. The merger is expected to provide 800 billion in new annual revenue for SK Telecom.