Originally, the three companies KT, SK Telecom and Hanaro Telecom obtained the WiBro business license. However, Hanaro Telecom gave up its license, saying that it has no business capacity. KT plans to begin the commercialization service in Seoul and the surrounding Gyeonggi province in areas such as Gangnam-gu, Songpa-gu, Seocho-gu, Sinchon and Bundang-gu, where it already implemented a pilot service.
SK Telecom also plans to offer the service to some regions in Seoul, including Seongbuk-gu and part of Gangnam-gu.
KT and SK Telecom began the quasi-commercialization on June 30 for the first time in the world, but they had engaged in a subtle war of nerves on the date of commercialization before the launching.
KT and SK Telecom were in a situation to commercialize the WiBro service before the end of last month at any cost according to the business blueprint they submitted to the government in case of acquiring the business license.
Amid worries over the shortage of technology for commercialization in the market, they felt that the schedule for commercialization was too tight. They had a sense of crisis about the commercialization of the WiBro service at a time when the appraisals on the ripple effects of such competition services, including HSDPA, were not sufficiently analyzed.
The SK Telecom side, which decided to launch the commercialization service on June 28 two days ahead of KT, said that if the world's first WiBro commercial service is limited to such small districts as a "dong" unit, its significance will be reduced by half, saying that KT, which had propelled the WiBro business in the past, should commercialize the WiBro service for the first time in the world as a matter of course and advance the commercialization date.
As for KT, it said it had no plans for advancing the commercialization date fixed for June 30, refuting the calls that SK Telecom should rather commercialize the WiBro service for the first time in the world.
Ironically, they tried to turn over the world's first commercialization service to each other, despite the fact that business providers should compete to become the first to launch the first commercialization service in a normal situation.
Accordingly, the Ministry of Information and Communication (MIC) in charge of the business suggested mediation to the two companies to unify the commercialization date between the two - June 28 or 30.
Such a phenomenon seems to reflect the skepticism in the market over whether the WiBro business will succeed or not.
In fact, WiBro is one of the core services of the ministry's IT839 strategy and an important technology, which was reflected in the goal of the global standardization of WiBro.
Accordingly, in a fear that postponing the timing for commercialization may be interpreted as shortage of technology, relevant service providers had stuck to the planned commercialization date, despite the criticism against imperfect preparations.
An official of the MIC said, "The two companies submitted an article for use to the ministry on June 29 and said they would launch the commercialization service from June 30. The ministry gave them the green light as they kept the permission term fulfilling the deadline of the end of June and there was no serious problem in the article."
| WiBro Service Charge Announced On June 29, both KT and SK Telecom announced that they have lounched the commercial service of WiBro in the given districts of the Seoul Metropolitan Area, and also that they have set the service charge system, the subsidy size for terminal purchase and contents of service. According to their report, KT has prepared a "Free WiBro" fixed service charge system of W16, 000 per month on a temporary basis until the end of this year, considering the limited coverage and service level. In addition to this, KT has introduced three kinds of promotion service charge system, which provide a 70% discount rate of the basic service charges: WiBro Saver, WiBro Basic, and WiBro Special. But SK Telecom has prepared only one fixed charge system of W30, 000. The terminal has adopted only one type of PCMCIA (Personal Computer Memory Card International Association) card. The subsidy of both companies is equally set at W100, 000, thus placing the actual purchase price of a terminal at W270, 000. |
In the future, SK Telecom in cooperation with Samsung Electronics will introduce an integrated communication card, which is designed to use different networks, including WiBro and HSDPA, with a single PCMCIA card.
KT also plans to develop and produce an integrated terminal carrying a 2.8-inch screen that combines WiBro and terrestrial DMB. KT also said it will produce a cell phone-type WiBro terminal in the fourth quarter, along with Samsung Electronics. In the meantime, KT and SK Telecom have decided to inject 500 billion won and 170 billion won, respectively, in the WiBro project this year.
The Telecommunications Technology Association (TTA) promoted the WiBro standardization three years ago and presented the technology to the Institute of Electrical and Electronics Engineers (IEEE). And Korea set the 3.5-generation mobile communication service as the national project.
Now, whether WiBro will become the world's "next killer application" or not is becoming the focus of interest at a time when the commercialization is in the initial stage.
Service-users in the commercialized region are able to download a 36-page newspaper within a maximum of one second or an MP3 music file within 5-6 seconds. In this case, the frequency band is expected to be set at 2.3ß., the Internet speed (service bandwidth) at about 1Mbps, and the service charge at 30,000 won a month.
In case of establishing WiBro terminals such as wireless LAN on personnel computers, notebook computers, PDAs or car receivers, users are able to use the Internet freely as a cell phone even in a moving car or subway.
Although the maximum Internet-using speed is 5.5Mbps for uplink and 20Mbps for downlink technically, the actual speed appeared through the pilot service by users was 1Mpbs~3Mbps, similar to the Asymmetric Digital Subscriber Line (ADSL) speed of the super-speed Internet for home use. The use of Nespot is limited to around 50-meter hotspot region where a base station was set up. On the other hand, the WiBro's radius for use is about 1km and the handover going over from one base station to another base station is possible so that users can utilize Internet while moving without disconnection. Also users can receive several services with limited contents through the wireless Internet of mobile phone and the service charges are very expensive, so they use the services chiefly for downloading bell sound or characters. However, they can use a variety of super-speed wireless Internet services at more rational charges with WiBro.
-
Business plans of mobile WiMAX service providers
KT started its commercial service in some part of Gangnam-gu, Sinchon, Bundang, the subway line of Bundang, Seocho-gu and Songpa-gu, and SKT launched the service in six hotspot zones, including such university districts as Anam-dong, Hanyang University and Sinchon.
They plan to expand the service available area to all regions in Seoul and major towns in the Metropolitan Area by early next year. Thereafter, they plan to expand the service area further on a step-bystep basis, considering the market demand.
SKT plans to increase the number of hot zones from the present six to 15-20 before the end of this year and expand the service area further every year. From 2006, SKT is planning to expand its coverage gradually to demand-intensive regions in towns such as center commercial districts, housingswarmed districts and subways. To this end, it plans to invest a total of 800 billion won.
Both companies plan to apply a partial fixed charge system, under which they will impose a fixed fare, but, in case of data exceeding a certain quantity, they will apply a differentiated charge according to the quantity of use Considering the payment ability for communication, using pattern, using terminal and quantity of use, KT plans to introduce a variety of customer-tailored charge systems based on a fixed amount system.
The two companies are also moving to produce PDA-type terminals, WiBro-embedded notebooks, mobile phones and DBDM (dual band dual mode)- type terminals that combine WiBro in the future.
In the case of contents, SKT plans to offer information services, including messaging, video & music, game and location based service, and Biz services such as B2B, in addition to the basic service providing access to Internet in a moving environment.
By making the best use of its 4,670 menus and 680,000 contents, it plans to offer contents most suitable for WiBro at the beginning of the service, activating the market.
KT will introduce such basic Internet data services as information search, e-mail and news; media services, including multimedia blog and web media; and the specialized communication service PTA, which offers the video chatting and multimedia message services.
It is also preparing a service for online game that enables wire & wireless to interlock freely, and a remote file management service.
KT will provide such WiBro services as news, searches, maps, VOD, music, banking and home shopping contents and introduce a package contents service based on individual intelligent services, including video-exclusive blogs and portals.
Success of the KT's WiBro service commercialization depends on how attractive the terms and conditions of the service supplied to users are. Related to commercialization, users pay keen attention to the subscription terms and service charges.
However, the fact that the cost to purchase PCMCIA cards is higher than expected is likely to affect KT's marketing strategy and the activation of the initial market.
The provision for use includes contents on the method for service subscription, fare and subsidy. Considering the service coverage in use and limited terminal terms, however, the contents of the provision reported by KT for the first time are not so concrete. In particular, discount favors for super-speed Internet (Mega-pass) or Nespot users were not included in the provision, inviting complaints from existing users.
-
Consideration of commerciality of mobile WiMAX
At the time when the WiBro service was about to launch, the price of PCMCIA cards was expected to be slightly higher than that of general wireless LAN cards and not to exceed 100,000 won, considering the subsidy. However, the card price amounted to 300,000 won when the service was commercialized, imposing a heavy burden on consumers and resulting in poor responses to the service.
Accordingly, persistent conflicts are expected between KT, trying to lower the price to the maximum to reduce the burden on the subsidy and activate the initial market, and Samsung Electronics, which has to call for a hike in the price in case of failing to secure a certain amount of supply.
Amid growing concern about whether the WiBro service will become another killer application or not, relevant service providers that anticipated astronomical commercial viability of WiBro have paid keen attention to take the initiative in the nextgeneration communication business field.
When they applied for WiBro business licenses, market watchers carefully raised the possibility of its convergence with wireless VoIP. Although there is no clear answer to the matter, it is expected to graft the VoIP service onto the WiBro in the future as the original purpose of mobile communication companies is the data service covering all regions.
If do so, the degree of use is likely to go up significantly in terms of commercialization of WiBro. However, Lee Jae-chul, leader of the Telephony Business Division VoIP Business Team, said, "For success of WiBro, relevant companies should map out a design in such a way as to draw the direction toward the implementation of the mobile WiMAX service exactly. Service providers should open their networks wider and carefully listen to opinions of businessmen who hope to participate in the business. If things go wrong, it may fall into the shape of the old TRS.
Related to business viability, all people concerned, including service providers and equipment makers, should concentrate all energy on investment in a direction to see the future clearly and sagaciously."
-
Showdown between HSDPA and WiBro
Controversy over market competitiveness between HSDPA and WiBro, both of which launched commercialization in a similar period, is continuing in the domestic market. For the time being, accordingly, the focus will be placed on which service system between the HSDPA and WiBro consumers will prefer, rather than on whether WiBro will jump into the global market or not.
As each service has respective characteristics and merits and demerits, it is difficult for service users to select anyone that will lead the market in the future. The three main elements of communication are voice, data and media. At a time being changed from wire to wireless, the answer to which system between HSDPA and WiBro will take charge of the mediation role will be left to service users.
In the case of WiBro, companies will expand the scope of coverage according to users' demands for seamless service. As it was already known, WiBro is more economical than HSDPA. Its service charge system that is cheaper than existing service will also draw attention from service users.
If HSDPA is described as a form going over from voice to Internet, WiBro is the one going over from Internet to voice.
WiBro has the most effective structure for superspeed data transmission without consideration of voice service. Meanwhile, WCDMA (HSDPA) has a structure dealing with the voice service first and enables transmission of middle and high-speed data transmission.
WiBro is slightly superior to WCDMA (HSDPA) in the transmission speed and offers the Nomadic service for demand-intensive regions. WCDMA (HSDPA) offers nationwide services centering on voice.
Meanwhile, some people raise the possibility that WiBro is inferior to HSDPA in the wireless data market owing to limited coverage in the initial stage of commercialization at the end of June, absence of various terminal line-ups, and conflicts with existing Internet users in staging active marketing.
--
WiBro will generate future benefits for the next-generation mobile communication
Korea already experienced many errors and trials in the process of technology development through 2G and 3G, making full preparations for the nextgeneration communication environment.
Through this progress, accordingly, Korea acquired advanced know-how. Lee Ki-tae, president of Telecommunication Network Business, Samsung Electronics, said. "Samsung set 2006 as the first year of the WiBro globalization. If a company hopes to use the portable Internet service, it has no option but to use the WiBro technology and engage in negotiations with us."
In 2006, Korea reached the world's top level in the WiBro and DMB sectors, boasting of its nextgeneration communication technology.
As a result, if the top five information media . portable Internet WiBro, the next-generation mobile communication (WCDMA, HSDPA), digital multimedia broadcasting (DMB), Internet-based IPTV, and data broadcasting . are activated, Korea can enjoy great success with exports of relevant equipment.
Against this backdrop, former Minister of Information and Communication Chin Dae-je recently said, "Korea has found a vein of gold with which the Korean people can eat and live for the coming 10 years."
Samsung Electronics already decided to supply WiBro equipment to six countries, including the United States and Japan. It demonstrated terrestrial DMB at the Germany World Cup last June and plans to demonstrate WiBro at the Torino Winter Olympics in Italy in February net year.
The top five information media will bring about a great change in the landscape of the communication and broadcasting circles. Victory or defeat will be decided according to who will offer the services combining communication and broadcasting more perfectly.
According to Electronics and Telecommunications Research institute (ETRI), the top five information media are expected to create a market worth 30 trillion won in Korea before 2010, creating employment for 360,000 persons.
Experts also anticipate that the top five information media equipment will emerge as an export-promising item rivaling mobile phones or automobiles. WiBro is not only a "portable Internet" but also a provider of the wireless Internet telephone service and the multilateral video call and broadcasting program transmission service.
Although some of the above services may encroach upon existing service and their commercialization may be delayed, it is certain for WiBro to significantly change the landscape of daily living and the industrial sector.
--
Necessity of Korea's global branding for globalization of WiBro
The most important thing for Korea is to ensure that WiBro first succeeds in Korea. Selling the service, if it has failed in Korea, to foreign countries does not make sense.
Let's take the example of CDMA. Although we are accustomed to CDMA, only 20 percent of the world uses CDMA. The remaining is GSM.
Of the sale of Samsung, 14 percent was CDMA and the remainder was GSM. On the other hand, LG's sale of CDMA is higher than Samsung's case and the sale of GSM is lower.
However, the heat for CDMA was so strong that it could have an appeal to the world.
To globalize this product, it should be one that has scored success in Korea. Only when a number of people know merits of WiBro and select it, Korean companies can go abroad with confidence.
In case of WCDMA, Qualcomm has been reluctant to plunge into this field. The reason stems from its judgment that Korea is the only guaranteed market in this field.
The wireless business is not so simple as the wire business. In the case of cable, a subscriber makes a call and application for setup of facilities for connection. But, regarding wireless, there is no infrastructure, so a lot of investment is required for the setup.
We stand now at an important stage and have many tasks to solve. We should carry out bold policies without hesitation for the bright future. We should suggest favors carrying new conceptions after considering the issue on securing subscribers and the existing ADSL subscribers.
To have 10 million subscribers turn their eyes to WiBro, Korea should make its best efforts. Korea's WiBro has yet to secure competitiveness in foreign countries.
Most people in Europe and the United States use WiMAX and recognize that WiBro is the standard of Korea. Korea should not excessively insist on its own WiBro in the global market.
Namely, Korea needs to stress characteristics of Mobile WiMAX and the point that the Korean standard is the standard cosmopolitans want. Korea should enhance the value of our technology to the maximum extent while not hurting the pride of other countries related to technology.
To sell WiBro to the world, Korea should also open the domestic market wider. It should allow Intel with its high degree of recognition and market competitiveness to engage in a joint study on WiBro technology with Korean companies and create a business boom.
In other words, we need to make a bigger pie to eat in the market. It is better to have a branding work with global companies armed with market governing power than to let Samsung engage in marketing activities alone in the global market.
WiBro gaining recognition for its technology for global standardization
Is the Korea-type portable Internet technology WiBro only being commercialized in Korea The answer is no.
IEEE, an international standardization organization for communication technology, has already officially approved the "mobile WiMAX" (802.16e) based on the WiBro technology as an international standard. The WiBro jointly developed by Samsung Electronics and ETRI became the global standard in fact. As a result, any businessman hoping to engage in the WiBro service must first have royalty negotiations with ETRI and Samsung Electronics.
Samsung Electronics filed applications for patents in 203 cases in the portable Internet field, securing the No. 1 position in the world in terms of the number of applications. Accordingly, it can expect huge amounts of royalty income.
Of course, "Mobile WiMAX" is part of the "WiMAX" led by Intel of the United States. It has become the international standard under the joint cooperation between Intel and Samsung Electronics. Accordingly, if the two companies cooperate, the globalization of WiBro could be accelerated. At the same time, Korea needs to have selfconfidence in its WiBro relay technology as a number of people from advanced countries in technology, including Japan, came to Korea to learn it.
Korean-made repeaters boasting of the top quality in the world carry 95 percent in the localization ratio for both 2G and 3G.
It is because there are no imported chips in repeaters necessary for most communication generations.
Eem Ki-ho, president of MTI, said, "Korea has steadily engaged in R&D projects for repeaters under the anticipation of its bright future. After experiencing many trials and errors, Korea has finally succeeded in producing excellent repeaters today. With persistent technology development, we will enhance the price competitiveness."
Tasks to settle beforehand for success of WiBro
Although WiBro has been commercialized, there are many problems to solve, including technical weak points and various regulations hampering smooth combination service. Strictly speaking, WiBro is a service born for convergences such as convergence between communication and broadcasting and a merger of wire and wireless.
In fact, KT televised Arirang TV and CNN programs in a running car when it demonstrated the WiBro service at the places of the Asia-Pacific Economic Cooperation (APEC) meetings held in Busan last November.
It means that WiBro has a destructive power as a media of convergence between communication and broadcasting, in addition to wireless of cable. Owing to this, both the communication and broadcasting industries pay keen attention to WiBro. One thing to be improved immediately at a time when WiBro is commercialized is the conflict structure that has not yet been solved in relation to the WiBro service.
To seek activation of WiBro, we should recognize IPTV. Korea's broadcasting committee has objected the introduction of IPTV endlessly to protect financially weak broadcasting companies whose profits reach one-eighth of those of KT. Of course, we can understand its position. The convergence of communication and broadcasting is a global trend, but Korea's broadcasting is still conservative regarding acceptance of new ground and new solutions.
If such a conflict structure continues, Korea can still achieve profit structure at home, but find no place in foreign countries with severe competition. While we were repeating tough games owing to conflicts on the convergence of communication and broadcasting, Japan already developed IPTV and purchased relevant equipment from Korea's small and medium-sized companies for preparations of smooth commercialization.
While IPTV could not enter the domestic market owing to insufficiency of laws and systems, the nation's venture broadcasting solution company EGC & C concluded a contract to supply IPTV total solutions worth 7.65 billion won for the coming three years, including 2.85 billion won for this year, to OBS-TV of Japan around last March. Kim Yong-wha, CEO of EGC & C, said, "Japan, under the government's active support to dominate the world's IPTV market, plans to offer the services to Korea by making the best use of Internet's borderless characteristics. China is also planning to push for construction of China network for overseas Chinese by making the use of IPTV."
He also said, "Our company is now engaging in consultations with several large Chinese companies for supply of solutions. It is feared that Korean companies will turn over the market to their foreign competitors not only in the global market but also in the domestic market, as they failed to offer the service even though they developed solutions."
EGC & C, which had originally planned to supply the IPTV-related equipment to KT, exported the products to Japan after receiving approaches from them, while the domestic mobile communication company and the broadcasting committee have been feuding for a long period over the introduction of IPTV.
In such a poor environment surrounding the communication and broadcasting industries, is it possible for Korea's WiBro to succeed While we are snarling at each other at home, foreign competitors are overtaking Korean companies in terms of technology and marketability. We need to understand others' position well and solve problems through dialogue. In particular, the communication committee, the broadcasting committee and the Ministry of Information and Communication should seek harmony and cooperation within the scope of not infringing on others' turf.
저작권자 © Korea IT Times 무단전재 및 재배포 금지
