Carriers Rush New Wireless Options To S Korean Customers
Dow Jones Newswires
October 8, 2001
SEOUL (AP)--At a neon-lit shop in Seoul's bustling Chongno district, Kim Kyong-sun bought her second cellular telephone in six months.
"It's like a must-have ornament. You keep buying a new model to keep up with the trend," said Kim, a university student. "The phones are getting lighter, smaller and prettier, with new features like a bigger color screen."
Millions of young customers like Kim are key to the success of a cutting edge digital wireless technology being deployed by South Korea's three aggressive mobile carriers.
While most of the world may wait years for the arrival of the mobile Internet, South Korea's CDMA2000 1X service offers an early glimpse into the future of "third generation," or 3G, wireless communication. While 3G technology uses a high bandwidth to provide high-speed Internet links to the cellphone, 1X service tries to perform some of 3G's simpler stunts at lesser speeds, using the existing system.
Toting the snazzy handsets, youngsters download short video clips, games and songs while checking e-mails and stock prices, booking tickets, locating restaurants or reading news highlights.
Speeds aren't what the carriers promise, and consumers complain of spotty connections as the companies try to upgrade their networks. Those attempting to download video complain that images on the handset's color display are grainy like the screen of an old television.
But in subways and cozy cafes in Seoul, young people often peer into their cellphone screens, downloading cartoon characters and playing games.
The latest obsession is mobile Internet chatting. Dubbed a "thumb tribe," the high-tech youths use two thumbs to type on the small key pad.
"We are confident that the new service is taking off," said Pyo Hyun-myung, vice president for planning and coordination at KTF, South Korea's second-largest mobile operator, which rolled out the 1X service in May. "For many Koreans, especially young people, having a new model cellphone is a matter of prestige."
KTF, SK Telecom and LG Telecom recently bought a 1.3 trillion won ($1=KRW1309.6) government license to build wireless networks that can stream video and audio at speeds of up to 2.4 megabits a second, promising cellphone users the quality of Internet access they have come to expect from high-speed desktop computers.
But the 3G network won't be up and running until late 2002 or early 2003.
Old Networks Upgraded, But Speeds Still Lacking
Earlier this month, Japan's NTT DoCoMo started an early version of 3G wireless service at speeds of up to 384 kbps. KDDI Corp., another Japanese mobile carrier, plans to roll out CDMA2000 1X in April.
In Europe, companies spent billions of dollars in a bidding war for 3G wireless licenses, but they have been slow to develop phones and services. Many operators found themselves buried in debt amid a global market slowdown.
In the interim, South Korean mobile carriers have upgraded their existing networks, based on the San Diego-based Qualcomm Inc.'s technology, to support the CDMA2000 1X video-on-demand phones at speeds of up to 144 kilobits a second.
In reality, the speeds remain at 60 to 80 kbps.
"Minus the speed, the technology is already 3G," said Pyo of KTF.
Since 1X is a simple upgrade on their existing network, the carriers consider it a quick and cheap way to get consumers hooked on the wonders of 3G wireless technology. Critics accuse the carriers of prematurely packing the cellphones with new features to wring profits from their old network.
"They don't supply the old models anymore. Soon consumers won't have any other option than to buy 1X phones," said Ham June-shik, a mobile phone vendor in Seoul.
"For the carriers, the 1X service makes economic sense. You don't have to spend much to upgrade for the 1X," said Lim Byeong-yong, vice president for corporate strategy at LG Telecom.
Since introducing the 1X service last October for the first time in the world, South Korea's SK Telecom has converted 1 million subscribers to 1X phones. KTF and LG, which began the service around May, have a combined 210,000 subscribers using phones with Internet links.
SK expects KRW360 billion in revenues in its mobile Internet service this year, or 5.4% of its expected total sales of KRW6.6 trillion.
Prices Are Falling
In a race to stake out ground on the wireless Internet, the carriers are pushing down the prices. Once $600 apiece, the Internet phones are now sold at $130 to $430, depending on options such as a color display or high-quality speaker.
In prime-time TV ads, movie and rock stars romp with flashy phones with color monitors, holding them like a Nintendo to play games. A hot model comes with a detachable camera that allows the user to take a color picture and send it to a friend.
A key question is how often those owning the new models use the mobile Internet service.
"The screen is too small for the Internet, and the speed is not what they promised," said Kim, the college student. "So I still use my phone mostly to make calls."
"Full mobile Internet won't happen until the devices evolve to have a palm-size screen and their prices go down further," said Lim of LG Telecom. |
