Personalized, Situation-Centric Wireless Services (SK Telecom)
By Kim Deok-hyun
Staff Reporter
SK Telecom (SKT), the nation¡¯s top mobile carrier, plans to focus on providing
personalized and situation-specific wireless communications services, a move to build
earnings momentum in the face of low subscriber growth rates.
``Our aim is to offer perfect and feature-rich wireless communications services in line
with each customer's advanced mobile demand,'' said Shin Young-chul, a spokesman at
SKT.
In the consumer data communications market, the release of personalized services will
be only the start of new revenue streams of the future, he added.
As of the end of June, the number of Korea's mobile phone users were some 30.88
million people, accounting for around 67 percent of entire population.
The leading mobile carrier had 16.46 million customers with 53.36 percent market
share, according to official data released by the Ministry of Information and
Communication.
Its rival KTF, the wireless arm of former public telecom monopoly KT, had 10.13
million subscribers with 32.76 percent share, while LG Telecom, the smallest mobile
carrier, accounted for 4.29 million customers as of the end of June.
To cope with the limited prospects for future growth perspective, SKT has been
pushing ahead aggressively with its CDMA2000 1X network, also known as
2.5-generation mobile telephony, since the beginning of early 2000.
Last year, SKT presented its long-term business plan, named Vision 2010, under which
it will aim for positioning itself as a leader in ``personalized mobile platform service'' and
``financial enabler.''
The business plan, which covers the eight-years till 2010, calls for SKT to build a
common platform allowing customers to use all sorts of wireless applications whenever
or wherever they may be.
``When the common platform takes off, we will begin to use our mobile phones for
much more than just talking on the move,'' Shin said.
Under the plan, SKT aims to generate an operating profit of five trillion won on sales of
20 trillion won by 2005, taking a big leap towards becoming one of the world's top-15
telecommunications companies.
To achieve these targets, SKT has put its focus on Asia in an ambitious move to create
a so-called ``CDMA Belt'' that groups mobile phone subscribers in South Korea, China
and Japan.
The number of mobile phone users in the three countries are currently estimated at
some 300 million people, accounting for a quarter of total wireless users in the world.
By standardizing its CDMA2000 1X technology in the three nations which are leading
adoptees of new mobile technologies, SKT has pinned its hopes to expand its mobile
services and technologies further into Asia.
Early this month, SKT signed a memorandum of understanding with China Unicom to
launch a joint wireless Internet venture this year.
The preliminary pact, which was signed between SKT CEO Pyo Moon-soo and China
Unicom chairman Wang Jianzhou in Beijing, was a significant step for the company's
pan-Asian expansion plan, SKT officials said.
Under the accord, SKT and China Unicom will cooperate in developing mobile platform
standards in China, build and maintain the platform, and operate related mobile Internet
businesses.
SKT is also expanding partnership with China Mobile, the number one mobile carrier on
the mainland under a mobile phone roaming agreement.
According to a report by foreign investment banker UBS Warburg, by 2004 mobile
commerce spending in Asia will total over $113 billion, while wireless data access
charges in the region will be a $54 billion revenue opportunity.
Until the 1980s, Korea¡¯s phone services had lagged behind in terms of development
compared with Thailand, Hong Kong and Singapore, in part because of security
concerns emanating from the continuing confrontation with North Korea.
In 1984, a cellular car phone service that could support 15,000 subscribers was
introduced by Motorola of the U.S. and several Korean partners at a cost of $12
million. Five years later, AT&T won a $17.7 million contract to build Korea¡¯s second
30,000-line cellular phone switch and transceivers.
Over the period, fixed-line telecom giant KT (form Korea Telecom) transferred its
mobile phone service to the newly created Korea Mobile Telecommunications Corp.
(KTMC), the precursor of SKT.
One of the reasons for the sharp growth in Korea's mobile phone market has been the
successful commercialization of code division multiple access (CDMA) technology.
UBS Warburg said Korea's lead in wireless applications is to a large extent attributable
to the disproportionately high number of software engineers (particularly mobile handset
engineers) in the country.
The information-technology (IT) industry makes up 15 percent of Korea's total GDP
compared with 8.3 percent for the United States and 7.8 percent for Japan, it said.
Another interesting phenomenon is driving Korea's lead in wireless innovation,
according to the report. During the 1997-1998 financial crisis which devastated most
East-Asian countries, Korea's big business conglomerates, hard hit by the recession,
had to lay off many of their highly talented engineers, setting the stage for these
individuals to turn entrepreneurial.
``The result was the formation of dozens of software solution companies, turning Korea
into a breeding ground for cutting-edge wireless applications,'' the report said.
Indeed, the Korean economy, which had sustained remarkable annual GDP growth of
more than six percent since the 1960's, faced a severe financial crunch at the end of
1997 that resulted an economic contraction of 6.7 percent in 1998.
Indeed, a rapid transition has taken place in the inner circle of the Korean economy,
from the traditional industrial structure centering around heavy industries to a new
industry paradigm based on IT. According to data by Samsung Economic Research
Institute, a private economic think tank, the IT industry's gross production jumped at an
average annual growth rate of 44.1 percent in years between 1998 and 2000, compared
with mere 5.7 percent growth for the traditional brick-and-mortar industries for the
same period.
As for the investments on facilities, the IT industry expanded its investment spending
each year by 8.1 percent, while traditional industries recorded negative average growth
rate of 21.2 percent for the period.
Among the key products in the IT industry, the mobile phone has shown astounding
growth both in production and export volumes. Especially given Korea's CDMA phones
took the lion's share of the worldwide market with a total market share of 52 percent as
of the end of 2000.
kdh@koreatimes.co.kr
ÀԷ½ð£ 2002/07/28 17:43
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