KT, KTF set to merge landline, Internet services
Competitors cried afoul when KT Corp. - the nation's largest fixed-line carrier
and second-largest mobile carrier - considered bundling its wireless LAN
service - called "Nespot" - with a mobile phone service offered by its wireless
sister unit, KTF.
KTF officials have insisted that it is perfectly legal to bundle the two different
telecom services since the convergence of technology and services is the very
trend shaping the telecom industry in Korea.
"It is a major trend that we put together different services for the benefit of
customers, and there's no regulation that will prevent KTF from offering its 3G
service as part of bundle services together with KT," said a KTF spokesman to
The Korea Herald.
The spokesman further said that KT as the parent firm of KTF, is making a
logical and legitimate move to link the two different, yet closely-related wireless
Internet services. While KT's Nespot allows subscribers to hook up to the
Internet network via their notebook laptop computers and PDA (personal digital
assistant) in so-called wireless "hot spots," KTF supports a wireless Internet
connection through its cdma2000 1x EV-DO service optimized for data
transmission over the existing CDMA network.
KTF's EV-DO service "fimm" is designed to offer a data transmission at up to
2.4Mbps, whose speed is fast enough to compete with existing landline digital
subscriber line (DSL) services.
The combination of Nespot and fimm, is likely to strengthen KT's competitive
edge. The bundling package, if introduced, will allow subscribers to surf the
Web via PDAs and laptops at restaurants, hotels and airports where "hot spot"
wireless access is available, which relies on cdma2000 1x EV-DO technology,
especially when finding a hot spot is difficult.
The obvious benefit for customers is now irking competitors. Critics say a
dominant telecom service provider is essentially banned from offering bundled
services, and KT's move to team up with KTF could violate such a fair trade
rule.
With the formal introduction of the integrated service set to be launched later
this month, Hanaro Telecom Inc. and SK Telecom are arguing that the
government should not allow KT's bundling attempt.
Hanaro Telecom is the country's second-largest broadband carrier competing
with KT for the fast-evolving high-speed Internet service market. SK Telecom,
the country's largest mobile carrier, is also competing head-to-head with KTF for
market share.
The Ministry of Information and Communication (MIC), however, has yet to
clarify its position on the bundling of mobile Internet services. Nonetheless, KT
is keen to roll out its latest service that combines landline and wireless Internet
networks for a wider coverage and seamless flow of broadband services.
Korea is one of the key test fields in which both third-generation (3G) mobile
networks and wireless LAN services are competing with each other for
dominance in accessing varied channels for the a wider Internet network.
KT's vision is that their two services should be integrated, and KTF officials said
SK Telecom and LG Telecom can join the race by forging partnerships with KT
or other landline broadband carriers, instead of stonewalling their attempt to
provide convergence services.
SK Telecom and Hanaro Telecom have expressed concerns that KT's attempt
at bundling telecom services could destabilize the wireless LAN and mobile
industries in Korea.
The government currently bars SK Telecom and KT from launching bundling
services since they are the so-called dominant telecom operators in the mobile
and landline sectors, respectively.
Nespot, however, is a service that falls outside of the regulatory purview, as the
government only bans the bundling of fixed-line telephone and other services by
KT. SK Telecom's position nonetheless is that Nespot should not be bundled
with other telecom services since KT is also the dominant broadband carrier
with a 50 percent market share.
Information ministry officials said that they haven't received any requests from
KT and KTF over the revision of the terms of agreement with regards to the
bundling of Nespot and fimm services.
(insight@koreaherald.co.kr)
By Yang Sung-jin Staff reporter
2003.02.12
koreaherald.co.kr |
