A steep salary gap may impede South Korea's top mobile carrier SK Telecom Co.'s post-merger integration efforts even if it obtains government approval for its proposed acquisition of CJ Hellovision, industry people said Tuesday.
In the January-March quarter, SK Telecom's 4,184 employees received an average of 51 million won ($43,000) per person, almost four times higher than the average salary of 14 million won for CJ Hellovision's 1,109 workers, according to data from the Financial Supervisory Service (FSS).
SK Telecom beat two industry rivals -- KT Corp. and LG Uplus Corp. -- in average quarterly salary. KT and LG Uplus paid an average of 22 million won and 26 million won per employee, respectively, according to the FSS data.
SK Telecom promised to take over all of the employees of CJ Hellovision without job cuts when it signed to acquire the cable television operator in December. Moreover, CJ Hellovision workers are expected to demand at least similar wages for the same work in an integrated company.
If SK Telecom offers salary raises to CJ Hellovision workers, it will be a big financial burden for the company, industry officials said. SK Telecom's operating profit fell 0.13 percent to 402.13 billion won in the first quarter from 402.65 billion won a year earlier.
SK Telecom said the industry has gone too far with its predictions.
"It's too early to say the big salary gap between SK Group companies and CJ Hellovision could impede SK Telecom's PMI efforts following (the planned) acquisition. There should be approval from the government to finalize the deal," an SK Telecom official said.
On Dec. 1, SK Telecom signed to buy a 53 percent stake in CJ Hellovision from CJ O Shopping for 1 trillion won ($841 million), with a plan to merge the cable TV operator of CJ Group with its wholly owned Internet service provider SK Broadband Co.
SK Broadband also paid an average of 25 million won per employee in the first three months, higher than the salary level at CJ Hellovision, the data said.
Still, SK Telecom has yet to obtain approval for the deal initially from the Fair Trade Commission (and then from the Ministry of Science, ICT and Future Planning. The FTC is still reviewing whether the acquisition could hurt fair competition among players in the telecommunications markets, the official said.
KT and LG Uplus have expressed concerns that the acquisition and merger plan, if approved, will strengthen the No. 1 player's dominant position in the market.
Meanwhile, in its report sent to the New York Stock Exchange in April, SK Telecom said it may not succeed in carrying out the deal if not for approval from the antitrust regulator and the ministry. (Yonhap)
