Korea's telecom operators, handset makers try to balance views on CDMA and GSM
Korea's telecom service providers and handset makers are now trying to balance their views on CDMA (code division multiple access) and GSM (global system for mobile communication) technologies.
The country has been heavily dependent on CDMA technology, which was developed by U.S.-based Qualcomm Inc., and to whom Korean mobile carriers pay royalties and licensing fees to. GSM technology, however, is widely favored by European countries.
Analysts and telecom observers here say that Korea should pay as much attention to GSM technology as it does to CDMA technology, in order to stay competitive in the global mobile market.
CDMA has, undoubtedly, contributed significantly to Korea's ever- expanding share of the export market for telecom products, notably mobile handsets. It is time, however, for the government to shed its CDMA-oriented image, analysts said.
The Ministry of Information and Communication, which spearheaded the development and commercialization of CDMA- based mobile phone service, has come under fire for its obsession with CDMA. Some critics called the information ministry officials "CDMA Mafias," poking a fun at the excessive enthusiasm expressed by some government officials when it comes to CDMA service and their belief in its superiority and infallibility.
A local monthly magazine reported that the information ministry's obsessive favoring of CDMA essentially represents an anti- competitive bias that negatively affects the market.
The ministry in response, filed a suit against the magazine over the article. Observers said the ministry's defensive attitude only highlighted the problem.
The information ministry has been quick to promote CDMA standardization, in the six years that have passed since the Korean government formally adopted CDMA as the sole wireless standard for the nation, despite strong opposition from critics and GSM supporters.
CDMA's history in Korea goes back to 1991 when the nation adopted Qualcomm's CDMA technology as one of the state research projects. In 1995, the Electronics and Telecommunications Research Institute (ETRI) made a breakthrough in developing CDMA technology in partnership with Qualcomm. The first CDMA-based mobile phone services began in January 1996 in Korea, marking a new phase in the country's telecom industry.
Over the past five years, Kim Dae-jung's administration has eagerly promoted CDMA technology and its positive role in the economy and export drive. As new MIC ministers were sworn in, a government-led CDMA road show was staged. Telecom firms were asked to accompany government officials for such CDMA road shows, regardless of whether they backed the technology or not.
CDMA technology has benefitted Korea's telecom industry in various ways, but the problem is that some of the benefits have been exaggerated, while GSM is playing a larger role in the country's export drive in the mobile sector.
When it comes to export of mobile handsets and systems, Korea secures more revenue from the sales of GSM models than those of CDMA.
Samsung Electronics, the world's third-largest handset maker, is estimated to have sold about 42 million handsets worldwide in 2002. The portion of GSM phones accounted for 55-60 percent, while CDMA models carved out a 40-45 percent share.
In the year to end-November last year, Samsung sold 8.1 million CDMA handsets in the domestic market. But its export of CDMA handsets outside of Korea and the United States is less than 1 million units, suggesting that CDMA handsets are largely targeted at the domestic market.
Samsung had devoted its research and development to GSM phones in the 1990s. If Samsung had relied solely on CDMA and ignored GSM, it would have lost a great chance to expand its market share in the global wireless market, some 70 percent of which is dominated by GSM technology.
LG Electronics entered the GSM business relatively late. It sold some 2 million GSM handset units in 2002, but analysts said such volume is far from enough. The company, ranked sixth in the global handset maker rank, is now focusing on GSM handset export in a bid to expand its share in overseas markets.
Although Korea has sophisticated CDMA systems, major equipment makers are virtually blocked from entering the CDMA equipment market of the United States. Sprint PCS and Verizon Wireless are expanding their cdma2000 1x services and preparing for EV-DO services. But they are allocating CDMA equipment orders to Motorola, Lucent, Nortel Networks and other North American players, while excluding Korean manufacturers.
SK Telecom, the country's largest mobile carrier, is currently offering cdma2000 1x EV-DO service to its subscribers. The EV- DO is regarded as the full-fledged third-generation (3G) service based on CDMA technology.
But SK Telecom is scheduled to launch W-CDMA 3G service based on GSM technology in the third quarter this year, suggesting that it will not give up on the GSM-based wireless market.
KTF, which recently finalized a plan to merge with KT ICOM, is also set to launch W-CDMA 3G service in June this year.
If W-CDMA 3G services become available this year, Korea will embrace both CDMA- and GSM-based 3G services, and the dual standard is expected to help balance the country's view on the two competing technologies, despite the mounting criticism over the overlapping investment.
(insight@koreaherald.co.kr)
By Yang Sung-jin Staff reporter
2003.01.01
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As simmering anti-American sentiment in S Korea fuels anti-US opposition party forces, might Korea choose to slice off its own nose?
No.
"But SK Telecom is scheduled to launch W-CDMA 3G service based on GSM technology.."
wCDMA... based on GSM technology? Are journalists sworn to technical ignorance - even in Korea? <g>
"If W-CDMA 3G services become available this year, Korea will embrace both CDMA- and GSM-based 3G services..."
Concurrent with much of Europe delaying, and Asia rejecting wCDMA? Is there a business case for expensive, slow, buggy wCDMA in Korea?
No.
The real question is can Korea build wCDMA better, and take market share in Europe?
The real problem is the flawed standard... which holds everyone back... and will likely not be resolved till it's unfrozen and fundamentally altered. |
