Friday, April 1, 2011

SK Telecom Runs Out of Domestic Growth Opportunities

South Korea's SK Telecom Co. is considering a bid for movie-rental chain Blockbuster Inc., which filed for bankruptcy court protection last year, the Wall Street Journal reports. Whether a bid emerges, and whether it is the best use for SK Telecom's cash, is probably debatable, some might think.

But the possible move does indicate a problem that faces many fixed-line and mobile service providers, namely that opportunities for domestic growth are very challenging. To stay within their historic industry areas of competence, service providers are being forced to look to international, out of region markets, or, as this possible idea suggests, businesses outside the original core competency.

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