Qualcomm to Make Windfall From GPS Requirement for Local (Korean) Telcos
Telecom manufacturers and cell phone operators are lining up to introduce a location tracking service as the government plans to draft a rule that will require them to adopt the Global Positioning System (GPS) technology.
But, with the introduction of the rule, local telecom firms are likely to be required to pay huge sums of money in royalties to U.S. firm Qualcomm, the only company that has the core technology for commercial application of the service.
Location tracking, which is available here with some mobile phone services, helps lost drivers find themselves on a map, while fire and ambulance services are able to track the cell phone users’ location in case of an emergency.
Qualcomm, which has core code division multiple access (CDMA) technology, collects 5.25 percent of local handset sales and 5.75 percent of exports from Korean manufacturers.
According to a report released by the National Assembly, handset manufacturers and cell phone operators had paid a total of $938 million in royalties for using CDMA technology to the U.S. technology firm by 2000.
Given that homegrown technology lags behind that of the U.S. firm, bringing in the GPS-enabled service requirement will be a windfall for Qualcomm, which will get a major boost in royalties for network system and handset sales.
The bill on the new requirement will be submitted to the National Assembly before April, according to the Ministry of Information and Communication (MIC).
Named the Location-Based Service Mandate, it will require all handset manufacturers and mobile phone carriers to adopt some sort of GPS-enabled technology. If it is passed, handset makers and mobile operators will be ordered to incorporate the location tracker technology.
Currently, SK Telecom and KTF have completed the construction of network systems for GPS-enabled services after paying out royalties to Qualcomm. The financial terms of their contracts are confidential, according to the company officials.
LG Telecom, the nation’s smallest mobile carrier, is considering adopting Qualcomm’s technology even before the new rule becomes effective.
Government officials said commercial applications for GPS-enabled mobile phones will increase gradually, mainly because it is impossible to add the location tracker chipsets and network system at one time.
``The new rule is designed to use the location tracker technology for emergency situations and to protect privacy,’’ said a MIC senior official, who asked not to be named.
``It is not the right approach that Korean telecom companies are adopting a new technology favoring one particular company,’’ he said.
The government will soon hold a public hearing on the issue with consumers and cell phone makers, he added.
To avoid the foreseeable pressure of royalties, some local manufacturers have attempted to develop alternative technologies, but no visible results have been achieved yet.
Samsung Electronics is reportedly developing a technology that would provide the location detection service without using Qualcomm’s GPS chipsets. But, the technology is still in a laboratory level.
By Kim Deok-hyun
Staff Reporter
kdh@koreatimes.co.kr
02-10-2003 17:24
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