Korea Attempts to Resolve Phone Dispute; May Help SK Telecom
--From AOL. Much clearer now <gg>-- Cooters
Seoul, Oct. 4 (Bloomberg) -- Korea's attempts to resolve a dispute over new cellular technology may inadvertently help SK Telecom Co. maintain its dominance in over Asia's third-largest mobile phone market, analysts said.
The government is holding a debate today on the so-called IMT2000 technological standard, allowing advocates of two rival technologies a chance to square off.
Analysts say the debate, though, could be just a pretext by the government to delay implementation of new services to help equipment makers such as Samsung Electronics Co. catch up with overseas rivals such as Ericsson SpA and Nokia Oyj.
``If implementation is delayed, then SK will benefit in two ways: its competition will be slowed down in network rollout, and it can have more time to milk out the current network,'' said Jeff Kahng, a telecommunications analyst at Credit Suisse First Boston Securities in Seoul.
Kahng said rivals Korea Telecom Corp. and LG Telecom Co. were planning to build a new network ahead of SK to lure customers away from Korea's oldest mobile phone company. SK has 57 percent of Korea's 26 million cellular phone users.
Fence Sitting
Along with its rivals, Korea Telecom and the LG Group, SK is expected to secure one of three licenses for new cellular services to be awarded by the government at the end of the year. In their bids, the companies also will have to choose which form of technology they want to adopt.
All of Korea's mobile phone service providers now use systems based on Qualcomm Inc.'s technology. Samsung, Hyundai Electronics Industries Co. and other Korean equipment makers have been the primary producers and developers of this technology.
Still, as the bid deadline nears, the government may be trying to please equipment makers and service providers by allowing service providers to all choose one standard while delaying service implementation to give equipment makers time to switch resources based on Wideband Code Division Multiple Access technology.
Two weeks ago, the ministry took what might have been the first step to delay the process by postponing applications for new service licenses to provide cellular services that give faster Internet access.
Thorny Issue
The choice of standard is a thorny issue for the government. On the one hand, export earning equipment makers such as Samsung Electronics are advocating Qualcomm Inc.'s CDMA2000 standard - a derivative of what they now produce and have concentrated on developing.
At the same time, service providers have said they want to use rival WCDMA technology, which they believe will be more widely adopted, enabling them to connect customers even while overseas, something not possible now.
Samsung and Hyundai Electronics have said they're two years away from rolling out WCDMA network equipment.
While the Ministry of Information and Communication has not changed its policy of ``leaving the choice to the industry,'' it may make a ``statement of its opinion sometime early next week,'' said Lee Ki Joo, director of the ministry's planning division.
Oct/03/2000 18:53 ET |
