SK Telecom Buys 42.2% Stake at Record Company in China

(Business News & Technology News, 5 Mar 2008)

SK Telecom has signed an investment agreement with Beijing Taihe & Rye Music Co. Ltd (TR Music) acquiring a 42.2 percent stake of the recording company. SK Telecom will participate in the management of the company as the equal majority shareholder along with Taihe Media, the current largest shareholder.

Through this agreement, SK Telecom successfully laid a strong foundation to enter one of the largest and most vibrant music markets in the world. SK Telecom expects the new partnership to create strong synergy effects with its other businesses such as mobile phone, content, and convergence services.

Leveraging the expertise of both organizations, SK Telecom and TR Music will focus on pioneering new business areas, developing capable producers, fostering young talent while striving to develop new business models for digital music contents.

TR Music, established in 1996, is now considered the largest music company in Mainland China, excluding international music labels. As one of the most well known record labels in China, TR Music owns the rights to around 1,000 songs of top Chinese stars.

The Chinese music market is posting continued growth thanks to the broad consumer base, fast-growing digital music service, and government efforts to address the illegal market. With the advancements, SK Telecom plans to build the TR music into a major music label not only in China but also in Asia. The company will furthermore utilize the digital music contents developed through TR Music to become a leader in the Asian digital music industry.

Digital contents created by TR Music will also be offered through Viatech and UNISK, SK Telecom's subsidiaries in China. This will help SK Telecom secure strong distribution networks in the digital contents market and create synergy with telecommunications and convergence business in the future.

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