Qualcomm's 3G technology faces uncertain future in Korea
Korea was the first country to rollout CDMA (code division multiple access)-based
commercial wireless service back in 1996. However, more than four years later,
cdma2000, third generation mobile telecom technology evolving from the second
generation CDMA technology, cdmaOne, is becoming harder to sell to Korean
operators.
Even SK Telecom which was the first operator to launch CDMA service recently
declared it would jump ship and adopt W-CDMA (wideband code division multiple
access) for the upcoming 3G service, also known as IMT-2000 service, abandoning
what had been its pet project.
"There were strong proponents for both technologies within the company but
W-CDMA won the day in the end," said a SK Telecom official. The decision was
based largely on market potential, according to the official. "The Japanese and
Chinese markets are difficult to ignore," he said, referring to the problems that
Qualcomm, CDMA developer, has been experiencing in gaining foothold in those
countries.
Meeting with reporters yesterday, Korea Telecom (KT) President Lee Kye-cheol said
that the company was still undecided on which of the rival technologies it would
adopt. Denying recent speculation that the state-owned company would be obliged
to adopt cdma2000 at the urging of the government, Lee recalled recent comment
by the Information and Communication Minister Ahn Byung-yub that the technology
issue would be left solely to the operators to decide.
"It is my understanding that it is up to service operators to decide which standard to
take up and internally we have not reached a conclusion yet," Lee said.
However, all indications are that the company would pursue W-CDMA if left to its
own devices. "The government could push cdma 2000 down our throat but it cannot
ignore profitability with the company due to complete privatization by 2002," a KT
official said. The telecom company in which the government holds a 59 percent
stake is scheduled to complete privatization in the first half of 2002.
Once again, marketability of the technology developed by Qualcomm is an issue for
KT as well, as Korea makes up half the global market for CDMA technology with
chances for wider uptake apparently slim.
LG TeleCom's (LGT) stance on the technology has been clear from the beginning,
having declared early on that it would go with W-CDMA. "There is no wavering in our
position," said an LGT official, adding that if SKT opts for W-CDMA, the company
would stick with the direct spread technology without any hesitation.
With all of the major contenders for IMT-2000 license hinting at plans to adopt
W-CDMA for 3G service, the government may be forced into negotiating with KT, in
which it is the majority shareholder, to have it take up cdma2000.
However, given the smaller marketability of cdma2000, with 80 percent of the world
expected to go with the competing W-CDMA technology, it would not be easy for
the government to convince KT to give up W-CDMA.
In the end, it may be the threat of potential trade pressure from the United States
that will force the government to impose cdma2000 on KT, according to industry
insiders. "It has happened in Japan and there is no guarantee that it will not happen
here," an industry official said. |
