SK Telecom's Semestrus Horribilis

The light at the end of the tunnel ?

Starting August 8, Hanarotelecom will offer quad play bundles featuring synergies with its new owner SK Telecom (probably under the SK Broadband brand). Telemarketing operations, suspended following a scandal over personal information leaks, are to resume August 11.

When SKT integrated it last February 22, Hanarotelecom claimed a 24.6% market share for broadband internet subscriptions (3.6M, 1M of which FTTH : 100Mbps optical LAN network coverning over 12M households), and 8.9% for fixed telephony (2M lines).

SKT paid a dear price for this, not to mention a few obligation imposed by the regulator (to open their mobile internet gates beyond Nate, to share access to their 800MHz frequencies, to invest massively in suburban networks...), and legal consequences of the personal information scandal. SKT considers suing former shareholders Newbridge and AIG for not mentioning this practice :
Hanarotelecom has been massively losing customers (even on the booming IPTV market : Hana TV has lost 50,000 customers over H1 2008 while KT's Mega TV gained 220,000 and myLGtv 70,000), thousands are filing for a class action suit, and even more through direct channels.

After a first half of 2008 which saw local rivals KTF and LG Telecom revive, US rival Virgin absorb Helio, and such brands as TU media and T struggle, SK Telecom has an opportunity to redeem itself, provided it delivers the goods and wages the convergence wars as a respectful leader.

A disruptive move would be to boost VoIP on a market that lags behind many others, to the risk of endangering voice revenues even in the mobile business. It's time to leverage on SKT's already multiplatform services and to restore some of the brand's fun factor.

IPTV in Korea

A 100 Mbps connection, a brand new Homevita home networking service including a complimentary Samsung Q1 Ultra (slick, black, DMB enabled, lovely keyboard). And all I can get is VOD channels. The closest thing to live TV I get is through classic web browsing or through CCTV (most exciting Reality TV program : who paid me a visit the last few days ?).

Forget about real time broadcasting : the Ministry of Information and Communication is in favor of it but the Korea Broadcasting Commission lobbied against it. The freshest news, sports or series you can get must be at least 24h old. And provided your IPTV service reached an agreement with the broadcaster, you must pay for them (like KRW 500 apiece - never mind those corny loyalty program points).

24 hour old ! Ancient by the standards of a (supposedly) information / knowledge society where 90% of households are already enjoying pay TV, where internet / mobile banking is commonplace, where interactivity starts when you wake up and stops when you fall asleep.

In spite of this key regulatory hurdle (the only reason why France is still a leader in commercial IPTV), and the competition of so many technos (including DMB*) IPTV is on its way to 3 M subs by EOY 2008.

And Daum still wants to become the 4th player this summer ; a TVNO on its competitors' backs with powerful partners : Microsoft (platform and Xbox 360 access), Celrun (set top boxes), and NHN / Naver (Korea's second portal and already a key VOD and TV aggregator - see Naver VOD or Naver TV news for example)

The competitors ? The usual suspects :
- SK Telecom : the mobile leader is wolfing pionneer and leader Hanaro Telecom down. HanaTV targets 1.8M subs EOY (800k EOQ1 2008) with a break-even point at 2M.
- Korea Telecom (on the way to merging with KTF) : Mega TV has the cutest logo and the best network (optic fiber all the way through its Megapass broadband subsidiary).
- LG Telecom : #3 as always for the TTM as well as the market share. myLGTV has the weakest VOD catalog but that's better than nothing.

These 3 players just reached the 10M 3G subs plateau : 5.28M for KTF (+440K for Show in April), 4.68M for SKT (+470K for T Live) and 190K for LGT's Rev. A service.

* KBS, a top broacaster, is also national and regional T-DMB license holder (with KTF) - about U-KBS (VOD, KBS Star, KBS Heart, KBS Music, KBS Data, KBS-Mozen TPEG telematics... - yet another "Ubiquitus" service), see kbs.co.kr/dmb.

VizaOzavi and other bull's eyes

What's in a name ? With zaOza*, Vivendi decided to drop 2 "vi"s at the edge of Vizzavi, and to add a bull's eye in the middle. Like : this time, I don't want to mess around but to go for the real thing ?... Maybe they purchased Activision to enhance their eyesight and optimize their chances to hit the said bull's eye.

Vodafone and Telefonica are into better targeting too : the Anglo-saxon leader and the Latino leader took a stake in Amobee Media Systems, a mobile advertising joint.

The Shoogle application must target Parkinson disease victims, blurring the frontier between handsets and handshakes. Next time you go to the pub, don't forget to fill her up with scotch.

SMobile Systems targets the soft spot of mobile linux : the first Android app is as sexy and useful as Norton. SecurityShield is the name, paving the way for developpers the game.

Elsewhere :

- NFC takes the tube - the London Underground before a greater coming out ?
- Outdoors, the OFCOM allows UK Broadband switch from TD-CDMA to WiMAX. If they can make it, that is. WiMAX seems to be losing ground in the US, where Verizon picks LTE.
- Korea keeps migrating at high speed : HSDPA claims 3.2 M subs end of Q3 2007 (2.02 for KTF). Users are discovering the beauty of (U)SIM cards and the easyness to drop a handset or an operator for another.
- Turned down by Sprint-Nextel (while KTF and DoCoMo snatched each 17% of U Mobile in Malaysia), SK Telecom takes 38.89% of Hanaro Telecom (including a 25% market share in fixed broadband). SKT discovers true convergence even later than Vodafone - and postpones a much needed boost in internationalization.


* the commercial name of "Vivendi Mobile Entertainment : Vizzavi's Second Life ? " (20070526)

106.8% penetration rate for broadband

106.8% for Seoul, 99.2% for Incheon, 100.7% for Gyeonggi province... as of May 2007, 90% of Korean households had a fixed broadband connection, Jeollanam-do being the usual local laggard with a 58.4% penetration rate most G8 countries would dream of posting.

Mobility is also behind with 87.3%. Despite a nationwide HSDPA coverage, 3G remains an EVDO thing for SK Telecom (55% of total subs). With the technical help of DoCoMo, KTF reached the 1st million mark for HSDPA (about 10% of their total customer base + 42% for EVDO) and expect 2.7M for EOY 2007.

IPTV remains relatively low, but more than 500,000 households have already subscribed to HanaTV (Hanaro's VOD service), and after the recent opening by the regulator, KT can at last target 300,000 subs EOY for MegaTV (1M for EOY 2008). Mobile leader SKT is out of that race and tries to enter the PC to mobile communications business. For them, international activities and payment solutions appear once more as one of the few remaining drivers for growth.

NB : this photo "Wireless Korea" (2003) is available on SnapVillage.com as "power lines".

T Login for HSDPA, EV-DO, WiBro and YouNameIt

SK Telecom having a knack for new brands and new technos, customers must be struggling to keep the pace with the operator's launching machine.
T Login isn't Deutsche Telekom's latest Business Unit but a key to all SKT wireless data accesses (3G EV-DO, HSDPA, WiBro... or why not TD-SCDMA tomorrow* ?) for all devices (laptops, PMPs, digital cameras, car navigators...).
And which common denominator connectivity do you think they picked up before embedded solutions - T Login inside - are available ? Neither Bluetooth nor a vulgar 802.1x wannabe, but Korea's ultimate entry point : the USB.
Yet another proof of SKT's priorities, the first T Login modems will start with HSDPA and add WiBro on time for Xmas and at full throttle 3 months later**. Thanks to KRW 190,000 subsidies, retail prices are slashed to KRW 50,000 or about $ 50, which reflects the importance of this new entry point. SKT decided to boost the buzz by recruiting 30 "quality reviewers" on the web besides the usual pilot testers. Service rates range from KRW 29,900 per month for 2GB (+ KRW 184 per additional MB) to KRW 45,000 for 3GB (+ KRW 123). To be compared to, say, a basic fee of KRW 33,000 for Hanaro Telecom's unlimited Fiber LAN access for cyber apartments.
Overall market is estimated at 2 million people, with the usual suspects mobile office workers and road warriors among core targets, but also students because the group intends to embed its major entertainment brands MelOn, cyworld & Co. too - hell, they even offer dodoris as prelaunch incentives ! In a country where PC cards failed, HSDPA does stand a chance and SKT can leverage on security advantages as well as roaming perspectives for business users.



* since the techno is about to enter Korea (see "TD-SCDMA in Korea" - 20060901)

** No S-DMB in sight and anyway TU media didn't communicate much after the launch of free T-DMB services while KTF claimed 164,000 customers end of May.

WiBroken hearts

How could WiBro possibly make it ? KT seems to maintain their 2006 TTM but earlier this week Hanaro decided to drop a techno their partner SKT was already feeling so-so about (focusing on HSDPA, the next "universal" mobile techno...). The MIC may be looking for new WiBro license holders, who can sign a check for it and for the roll out ? That would be a little bit less than a billion bucks for an ailing project even the nation's #2 broadband powerhouse can't afford. Hanaro still needs to recover from the purchase of Thrunet and must face fierce competition : Dacom's Powercomm is coming, and the leader KT keeps pushing harder on convergence (ie their last phone service KT Ann extends the home sphere with sms and more innovative gimmicks such as ringo). Even in Korea, being a leading broadband ISP is not enough anymore.

Finding MIMO ? after MoMu and MoMa

July 2004 : long before the opening of the new MoMa on the West 53rd, the MoMu opens its virtual gates to the world. SK Telecom's online Mobile Museum encompasses 20 years of wireless experience and is in itself a broadband experience : even with huge Hanaro or KT Megapass bandwidth, browsing the site takes some time. The thing is all major architects were drafted for the Leeum, Samsung's Chairman Lee Geon-Hee's Xanadu and a place to see if you love Korean ceramics (ie a unique Buncheong ware collection) and traditional art - as far as modern art is concerned, Leeum's impressive check-list sounds like a turn of the millenium's Frick collection.
Well. R&D people have other worries than art, worries worthy of the age of mobile broadcasting : will "Finding MIMO" (Multiple Input Multiple Output) be the next blockbuster, will this uncertain roadmap "Trow mamma off the train" or will they have to bury "The Mummy" ?