QCOM--Korea to require two 3G mobile technologies
(UPDATE: Recasts throughout, adds quotes, analyst comments)
By Yang Sung-jin
SEOUL, Oct 10 (Reuters) - South Korea will require two technologies to be adopted for third-generation mobile phone users to appease competing interests among service providers and equipment makers, the Information Ministry said on Tuesday.
Three carriers vying for lucrative licences to offer wireless multimedia capabilities have expressed a preference for a platform called W-CDMA, citing its 70 percent share of the world's mobile market.
W-CDMA (wideband code division multiple access), being developed by Nokia and Ericsson , competes with Qualcomm's (NasdaqNM:QCOM - news) cdma2000.
Manufacturers of telecom equipment, including Samsung Electronics , which are part of consortia bidding for the third generation (3G) licences, have lobbied heavily for the Qualcomm version.
Minister Ahn Byung-yub told reporters the ministry wanted both technologies adopted and would not allow all three bidding consortia to opt for just one.
Two would be allowed to opt for W-CDMA if they chose, but the government would then hold a follow-up auction to find a cdma2000 carrier, likely by next March.
SK TELECOM REGRETS DECISION
Samsung Electronics Vice-chairman Yun Jong-yong earlier said the issue was a ``heavy concern'' and it would be best for manufacturers if South Korea avoided going W-CDMA exclusively.
The 3G wireless telecom services, called IMT-2000 in Korea, would allow global roaming, faster Internet access, multimedia and real-time video conferencing.
Analysts said the government's policy on 3G technology, which earlier favoured letting the consortia each work out the matter, could hurt foreign investor confidence in South Korea's already struggling telecoms sector.
Top-ranked mobile service provider SK Telecom was quick to respond, expressing ``deep regret'' over the government's decision.
SK shares ended unchanged at 256,000 won on Tuesday but are down 37 percent so far this year.
``Our policy on (favouring) W-CDMA has not changed,'' SK said in a statement.
SK leads one consortium seeking a 3G licence and is competing with two others led by Korea Telecom and LG Telecom .
Korea Telecom and LG Telecom also told Reuters they would stick to W-CDMA bids.
APOLOGY OVER POLICY
Minister Ahn apologised for confusion caused by the ministry's handling of the licencing process.
``I am sorry that we failed to reach agreement over the technology issue,'' Ahn said. ``Proper preparations were not made.''
Still, he said the decision to insist on two standards was taken to safeguard South Korea's exports of second-generation CDMA technology.
Ahn said in the long run it would also give service providers an edge in negotiating royalty agreements for the respective technologies.
``The government is likely to lose credibility for mishandling the 3G licence issue,'' said Stan Jung, a telecom analyst at LG Investment & Securities. ``By forcing carriers to adopt cdma2000, the message to investors is that they cannot trust its words.''
South Korea has one of the highest mobile phone user rates in the world and more wireless phones than land lines.
A ceiling of 1.3 trillion won ($1.17 billion) has been set for bids for 3G licences and a floor of one trillion won.
The government has said licences would be awarded based on bidders' technology, experience and financial strength. |
