IMT-2000 Based Gadgets Likely Commonly Available by 2005
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by Lee Chul-ho (Joon Ang Ilbo Newspaper, Jul.10.2000)
In a bid to decrease government financial outlay as well as criticism of 'playing foavroties', the Ministry of Information and Technology plans to leave the decision of platform technology for 'IMT-2000' to market forces ('IMT-2000' is an international pre-emptive move to standardize the next wave in telecommunications supporting wide-band video as well as audio feed.) Even though companies like telecom heavyweights SK, Korea Telecom,and LG have been voicing their complaints about the competition government has set up for the awarding of licence rights to IMT-2000, they have already started jostling for position within the framework the Ministry of Information and Technology has in mind.
Of the large field of hopefuls wanting the lucrative IMT-200 licencing rights, government has narrowed the group down to three companies with the Ministry of Information and Communication explaining that their decision was made to "ensure profits and success in the IMT-2000 venture as well as preventing overlapping or non-constructive investment competition." The Ministry had selected these three companies by evaluating their proposals for the IMT-2000 project as well as considering the amount of 'contribution' they tendered with their proposals, a reported minimum bid of a amazing 1 trillion won or $890 million.
Despite the required 'contribution' amount, companies are reported to have actually exceeded the minimum amount submitting bids close to the maximum set by the Ministry at 1.3 trillion won ($1.2 billion), since bidding anything less could make them less competitive and result in losing the potential profits of the IMT-2000 licence. This is all good news for the government, which is likely to use the required 'contribution' amount, which the winning company will have to pay, towards the huge amount of capital needed to aid North Korea develop its dilapidated infrastructure to minimum levels allowing for "economic cooperation" with the South.
Information and Communication minister, Ahn Byung-yub, met with the representatives from major companies individually last week to solicit opinions from the business community. Minister Ahn in a meeting with his aides, said that it seemed that SK and Korea Telecom (who were not part of the three companies still in the running for the IMT-2000 licence) were in favor of a synchronous system (CDMA system used in Korea and North America) while LG was opting for an asynchronous standard (w-CDMA used in Europe).
For their part, the Korea IMT-2000 Consortium, a group of smaller telecoms led by Hanaro and Onse Telecoms (also not part of the three groups selected by the Ministry but still in the process of putting together a 'contribution bid') has been strongly protesting the Ministry making public that it had narrowed down the IMT-2000 candidates down to only three. "The government is not showing any flexibility at all, when new comers like us to the competition should also be given a fair chance." The consortium is also being very critical of the Ministry's 'contribution' system, which seems to be transforming the competition into a bidding war awarding the licence to the company or group with the deepest pockets.
However, SK, Korea Telecom and LG had differing views on the 'contribution' system as well as the choosing of technological standards. SK executive Cho Min-rae made clear that his company had no problem with government's competition system "for the time being," indicating SK's continued intent to avoid entering into any consortium, and to cover the 'contribution' fee on its own from within the company itself.
However, Nam Jung-su and Lee Jong-shik, executives with Korea Telecom, said, that the 'contribution' expense of over 1 trillion won was somewhat "prohibitive". Also, Nam said that "it would be more favorable if technological standards were totally left to the market to decide". He continued, "we plan to make our choice [of technology standard] to further advantage our business proposals."
LG executive, Lee Jong-shik, noted that if SK and Korea Telecom chose to opt for a synchronous standard, LG would also follow suit. If LG insisted on the asynchronous standard, the heavy financial burden in start-up expenses would make their proposed project expenses, including the 'contribution' and initial investment, would surpass 3 trillion won ($2.7 billion). Moreover, there was also the possibility that the asynchronous-based system market would lose out in competing with the synchronous system to become the industry standard, making any company using asynchronous standards at 'severe risk'. According to these LG executives, "the possibility of the unified standard becoming synchronous as opposed to asynchronous sould not be ruled out".
Even though the IMT-2000 standard and related services is slated to go into effect by the year 2002, the general public will probably actually make use of the techonology years later. At the beginning, a mobile phone unit would probably exceed 2 million won with the lucky company or group awarded the IMT-2000 licence culling the 'contribution' fee from communication service charges and licencing fees. The intial customer base would likely be limited to those in business requiring the large data-transmission capacity provided by the IMT-2000 system, and then, eventually with communication devices going into mass production and service providers able to reduce communication service charges, more people listing onto the service would make IMT-2000 capable devices and service affordable by the year 2005. |
