Every new cellular system starts slowly but these numbers are pathetic. This means that they still are going to have to go through the debugging that is required when a system goes commercial. A thousand subs doesnt qualify.
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WiBro in Crisis as Service Flops in Korea
Korea’s homegrown mobile high-speed Internet service WiBro is in crisis after failing to attract subscribers. Promoted by the Ministry of Information and Communication and Samsung Electronics as a key future IT growth industry with boasts that they would attract 3.5 million subscribers worldwide by the end of 2006, WiBro signed a grand total of 1,057 subscribers here in the eight months since it was launched. SK Telecom said Monday its commercial WiBro service, launched at a cost of W170 billion (US$1=W936), has found a total of 151 subscribers. KT invested W450 billion since 2005 and secured 906 subscribers. Of the three firms that won licenses to provide WiBro services, Hanaro Telecom gave up in April 2005. What went wrong?
? Rudderless
The heroes of the development of WiBro, which offers broadband access in a car moving at 100 km/h, are the Ministry of Information and Communication and Samsung Electronics. The Electronics and Telecommunications Research Institute (ETRI), the country's largest state-run research center under the ministry, and Samsung jointly developed WiBro from 2003 to 2005. Samsung bore more than W30 billion in development costs. The prime movers were information and communication minister Chin Dae-jae and Samsung mobile telecom chief Lee Ki-tae. But Chin now runs a venture capital firm and Lee has been moved to Samsung Electronics’ technology development division.
? Suffering service providers
SK Telecom has not decided whether to keep investing in WiBro this year. Nobody argues about WiBro’s technological superiority, but it is threatening the main profit source of mobile service providers. Last year, SK Telecom registered about 29 percent of its sales from data communications -- i.e. Internet service for mobile phones. If WiBro grows, sales of data communications naturally dwindle. Many in the industry say SK Telecom only decided to participate in the WiBro business as a kind of insurance -- to prevent a scenario where other firms venture into the service and threaten it.
The same is true for KT. It has a majority stake in KTF, which is betting everything on the nationwide HSDPA mobile data service that starts in March. The 3.5th-generation service is a super-speed Internet technology that will make video communication possible. The service slightly lags behind WiBro, deemed a fourth-generation technology, but has found many adopters worldwide and looks like the most promising candidate for the next-generation international standard for mobile Internet connections. In the telecom industry, the best technology is the one most people use, never mind the quality of rivals.
Samsung Electronics will soon export WiBro technology and equipment to major U.S. telecom provider Sprint Nextel and Arialink. "WiBro, which is fast and stable, is still competitive in countries with a vast land mass but less developed wireless Internet services for mobile phones,” says Choi Nam-gon, an analyst at Tongyang Investment and Securities. But potential customers will hesitate if the country that developed the technology is not using it. Many in the industry urge the government to help export the technology and work out ways domestic mobile service providers can do this without excessive costs for them.
(englishnews@chosun.com )
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