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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: John Biddle who wrote (30761)	1/6/2003 12:13:17 AM
From: John Biddle	Read Replies (1) \| Respond to of 196674

3G Service Subscription to Break Through the 4.5 Million Mark By Kim Kyu-tae, Monday, January 06, 2003 etienglish.com Greater than 4.5 million people are likely to use 3G service by the end of this year. According to mobile communications vendors yesterday, cdma2000 1x EVDO terminals are poised to fall into the hands of more than 4.5 million by the year-end from 170,000 as of the end of December. In particular, VOD-enhanced terminals are expected to claim more than half of the total penetration rate of EVDO providing impetus to moving picture-enabled contents market. The Subscription Rate of 3G, a paltry 0.5% = Since the provision of EVDO network-supported 3G services from last year, SK Telecom and KTF secured 130,000 and 40,000 subscribers respectively as of the end of last year. In the case of VOD, the subscription estimate of the two communications service operators goes down to 67,000 and 12,000 respectively. 170,000 users of EVDO is translated into a meager 0.5% out of total mobile phone subscribers of 32.34 million for the entire year of 2002. This sluggish performance is attributable to insufficient contents as well as some glitches in the process of distributing EVDO terminals. An official from KTF said, "Last year, some flaws in the terminal features were blamed for the untimely supply, and it is not until these days that high-end terminals begun to make a debut in droves." An official from SK Teleocm also said, "The development of EVDO terminals was delayed due to the void of a solid consumer base as the demand is not generated worldwide except only in Korea." žThe Demand for 3G to be Lifted = The industry widely believes, however, that the mobile communications market for this year will go through the rapid realignment through the delivery of 3G terminals. An official from SK Telecom said, "EVDO terminals will account for 80% out of the total distribution for next year, and we target higher than 3 million units including the changes in terminals." KFT also puts its estimate of the number of EVDO subscribers for this year at 1.5 million. By the year-end when approximately 13 ~ 15% of the whole subscribers are projected to pick up EVDO, a 'critical mass' is likely to be ensured in the market, business operators predict. At this point, then, the deliveries of terminals and contents will be straightened out smoothly, they presumed. Along with EVDO, as SK Telecom and KTF are set to commercialize 2GHz asynchronous [WCDMA] IMT2000 services on Oct. and Jun. respectively, the 3G market is expected to grow beyond expectation. žExpensive Terminals and Costly Fees = Despite the lofty expectation for 3G, high-priced terminals are criticized as a fly in the ointment. A high-ranking officer from a mobile communications company said, "We have been appealing for subsidies for new services, such as PDA or EVDO terminals, as an exception, but the government is not buying," adding that the government needs to be more flexible in operating the subsidy institution in order to boost the economy. Furthermore, excessive rate of fees for using services is also pointed out. Mobile communications service operators are initiating a fixed rate of 25,000 won a month for their services on a temporary basis. Considering average fees of 45,000 won (as of last Nov.) for SK Telecom users, the price is still burdensome. A chunky slash in fees still remains elusive even though SK Telecom and KTF are seeking a reduction in the cost during the first-half of this year by analyzing a consumer pattern of service usage. In order to ensure 3G market transition, the authorities concerned need to carry out a decisive cut in data communications fees while complementing the operating losses, industry sources say.