SK Telecom has insisted that talks to sell a stake to Japan's NTT DoCoMo are ongoing despite a report that discussions were on the brink of collapse.

The companies have been negotiating for about two years about a possible 15% stake for DoCoMo in the Korean firm.

But despite the difficulties SK says it hopes to strike a deal by the end of this year.

A partnership could be lucrative: South Korea's top mobile carrier won a third-generation (3G) mobile licence last year.

If the companies synchronise technologies they could take advantage of the high numbers of people who travel between Japan and South Korea, especially with the two countries jointly hosting the football World Cup in 2002.

Technical delay

But this seems to be one of the sticking points in the talks.

SK plans to delay the commercial launch of so called WCDMA, the 3G mobile standard adopted by DoCoMo and many European operators.

WCDMA is primarily aimed at business users and the amount of business travel between Japan and South Korea is important to the companies.

SK plans to delay commercial launch of WCDMA services to 2003 from an earlier schedule of next May, citing slow progress in development of necessary networks by telecom equipment makers.

DoCoMo caution

Laurence Delgrande, telecoms analyst at Lehman brother in Tokyo, told the BBC's World Business Report that the companies are having problems coming to an agreement.

"DoCoMo are facing potential losses on some of their previous acquisitions, so they do not want to do any deal for which they overpay," he said.

Because of this, the Japanese company is taking longer to make decisions that it took on previous deals.

However, there are not many other credible players in the region for DoCoMo to tie up with.

DoCoMo has been in talks with SK about taking a 15% stake in the Korean operator.