SEOUL, KOREA — As KT (a Korean integrated wired/wireless telecommunication service provider) finally jumped on the bandwagon of LTE (Long Term Evolution services), the next-generation LTE market is expected to be trisected. The top three wireless carriers (SKT, LG U+ and KT) have entered into a war to raise the number of their subscribers.
Thanks to the population heavily concentrated in the Seoul Metropolitan areas and the high concentration of ICT infrastructure networks, Korea has been the ideal breeding ground for LTE services. Besides, all of the Korean wireless communications service providers are capable of providing LTE services nationwide, which is unheard-of in other nations. Therefore, only one year after LTE service started to be available, SKT attracted 2.2 million subscribers, LG U+ 1.9 million and KT 500,000, taking the combined share of the top three Korean wireless carriers in the global LTE market to as high as 30%. This is huge growth. In addition, if the current trend continues, the number of LTE subscribers, some forecasters predict, will reach 14 million this year and 45 million by 2014.
The first round of the triangular competition is a technology war
The ultimate goal of the top three market leaders is faster speed and better call quality. However, a closer look at the triangular competition structure tells a different story: each company’s technologies differ to a great extent.
First of all, front-loading the PETA technology, SKT said it will double the speed and triple the capacity. PETA (short for Premium Quality, Excellent Speed, Total Stability, and Advanced Tech) is the first total solution dedicated to LTE services. For a start, technologies for Premium Quality include LTE Femto and Upgraded Repeater (UR). A LTE Femto cell, designed for better indoor coverage, works as an ultra-small base station which easily sets up LTE hot zones in areas where traffic is heavy. And the Upgraded Repeater technology guarantees smooth LTE services in reception-poor areas such as on subways through the installation of over 1 million 800M repeaters throughout Korea.
Excellent Speed is a plan related to Advanced SCAN (Smart Cloud Access Network), which is a project in which SCAN applied to LTE services will get enlarged in November to jack up capacity and radio signal interference between base stations will be efficiently controlled to improve voice quality. Total Stability is a plan that takes advantage of operational knowhow called SON (Self Organizing Network) to optimize networks and enable automatic error detection and corrections. And Advanced Tech means SKT will become the world’s first purveyor of new technologies such as LTE Femto and IPv6.
Not to be outdone by its rivals, LG U+ is pressing ahead with a new service called FAST (First All-IP Seamless Total network) that links nationwide LTE networks to LG Wi-Fi networks. LG U+ plans to set up nationwide LTE networks covering 84 cities, 889 counties, national highways and KTX (Korea's high-speed rail system) so as to raise the LTE speed to 100Mbps both for fixed and wireless services.
Latecomer KT set out to offer higher speed and better voice quality by capitalizing on its existing 3G networks. In addition, KT buoyed up the capacity of base stations and the speed of data services in areas between base stations through LTE Warp (a new cloud communication technology which brings together 144 base stations under one virtual station). LTE Warp was designed to assign data capacities based on the Internet traffic around specific areas. However, compared with LG U+, KT’s nationwide LTE network is at its infancy. Look the scoreboard below.
Speed: SKT (9 points), LG U+ (8points) and KT (8 points)
Stability: SKT (9 points), LG U+ (8 points) and KT (8 points)
Nationwide coverage: SKT (8 points), LG U+ (9 points) and KT (6 points)
The second round of the LTE battle revolves around VoLTE service rates
Payment plans are as important as call quality. With the launch of nationwide services, the top three wireless carriers have come up with seemingly differentiated payment plans targeting certain age groups such as teenagers and the elderly. Yet, unfortunately, there is no big difference in their payment plans.
Still, competition for VoLTE services (slated for commercialization in October, 2012) among the top three market titans is worth watching. VoLTE (Voice over LTE) refers to voice call services based on LTE. The existing LTE services adopts a dual mode in which data communications is based on LTE networks while voice calls are made based on 3G networks. In contrast, VoLTE enables both voice calls and data services over LTE networks.
Will consumers be satisfied with VoLTE services In conclusion, services will improve quality-wise. At the LG U+ VoLTE Service Preview event, held in March, 2012, LG U+ VoLTE was proven to offer clear, better voice quality through broadening voice grade (the bandwidth required to transmit human voice). Besides, LG U+ VoLTE services make it easier to use data services while a call is in progress – for example, photos taken during a call can be transmitted without ending the call.
Then, what kinds of changes will be brought about payment-wise Some forecast the commercialization of VoLTE will lower voice call rates, but such a forecast seems somewhat groundless. A majority believe that wireless communications service providers will raise rates on the pretext of new, “premium” services. There is no doubt that VoLTE services are an improvement on existing services. However, if the wireless carriers table exorbitant service charges on the grounds of new, “premium” services, consumers will for sure give the cold shoulder to VoLTE services. This means that wireless telecommunication service providers should appeal to consumers with upgraded services that truly benefit consumers and wireless carriers who offer new services at a lower price will win the LTE war.