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To: tom pope who wrote (6986)	8/15/2000 12:30:06 PM
From: Jim Lurgio	Respond to of 34857

Korean 'war of nerves' over 3G standard koreaherald.co.kr Wireless operators in war of nerves over 3G technology standard Korea Telecom (KT), the SK Group, the LG Group and the Korea IMT-2000 Consortium are preparing to make a key decision in their strategy for waging the war for one of the three available third-generation mobile telecom licenses. Their choice has only two options, but is not an easy one: cdma2000 or W-CDMA standards. With the exception of the Korea IMT-2000 Consortium led by Hanaro Telecom Inc. (HTI) which will make final announcement on its consortium partners including foreign operators at the end of next week, the other bidders have closed applications for participation in their consortiums. The final lists of the consortium partners are expected to be available by the end of next week and once that is taken care of, the four sides will have to face the daunting task of making a final selection for the technology standard that will be deployed for the IMT-2000 service. While all the four bidders have so far said they would adopt the W-CDMA standard, prevalent in Europe and Japan, over the cdma2000 standard developed by Qualcomm, the Ministry of Information and Communication (MIC) remains adamant that at least one operator will choose to go along with cdma2000. Increasing the pressure on the bidders as they appear resolute on the technology issue, Song Hong, director-general of telecommunications policy bureau at the ministry, last week said that the government had never said that it would leave it up to companies to select the standard. "What was said was that the government would leave it up to the industry," said Son, indicating that the standard issue would not be left solely up to the individual wireless operators to decide. Son said that the equipment manufacturers would need to be listened to regarding the technology standard. Most of the manufacturers, including Samsung Electronics and Hyundai Electronics Industries, have been calling for the adoption of cdma2000, LG Information and Communications (LGIC) being the only exception, and the ministry now seems ready to use the equipment makers to persuade operators to switch to cdma2000. In an apparent warning to wireless operators, another high-ranking ministry official was recently quoted as saying that if Qualcomm decides to participate in the bid through Korea IMT-2000 Consortium, it could lead to one of the remaining three bidders losing the bid. Although Qualcomm has put the matter on hold for now, the Korea IMT-2000 Consortium did officially invite Qualcomm to participate in the consortium. Despite the various signals from the ministry, the four bidders for 3G licenses are still standing by their decisions to use W-CDMA standard. However, they are also engaged in subtle and often not-so subtle maneuverings to have the competition take up the less-favored cdma2000. The strain between the SK group and Korea Telecom is particularly acute with each side trying to force the other to take cdma2000. A high-level KT official said recently that there is no chance that the company, which is about to be fully privatized, would adopt cdma2000 under pressure from the outside. He added that choosing the multi-carrier standard which accounts for less than 30 percent of the wireless market could spell the end of the company. "Should at least one company need to adopt cdma2000 for the sake of national interest, that it should be one that has the most extensive infrastructure in the CDMA technology and which has more than 50 percent of the mobile phone service market," said the official, in clear reference to SK Telecom. Meanwhile, the SK group is striving to let everyone know it is not merely paying lip service when it maintains it plans to adopt W-CDMA. On Aug. 3, SK Telecom announced the results of developments in the W-CDMA technology, a project which it has been pursuing with 63 small- and medium-sized businesses and venture firms. The company also reiterated it would have no problems conducting a trial run of W-CDMA system at the end of the year and meet the May 2005 deadline for commercial deployment of 3G. "As far as technology standard is concerned, we are firm on W-CDMA," said an SKT official, adding that if the government needs to have a company adopt cdma2000, it could use a state-owned company, meaning Korea Telecom. However, industry sources say that SKT's final decision is still very much up in the air, as the company may use its position on the standard issue as a bargaining chip with the government in its bid to takeover Powercomm, a company which spun off from Korea Electric Power Corp. (KEPCO) with nationwide optical network. It appears that Korea Telecom is not absolutely fixed on W-CDMA either, a high-ranking official from Korea Telecom Freetel recently questioned the rationale behind dumping what has been a very successful experience with CDMA for a very small shot at the 80 percent market claimed by W-CDMA. "We are a major force in the CDMA market, although it may only account for 20 percent of the global wireless market. On the other hand, we have no leading technologies in the W-CDMA market, a market that is dominated by well-known global players," he said. Coming from a senior-level official, those remarks reflect the state of dissention within the Korea Telecom camp even as it has ostensibly announced it will not be forced to adopt cdma2000. Updated: 08/16/2000 by Kim Hoo-ran Staff reporter