KT and Softbank wed in the cloud

Two years after the merger of Korea Telecom with KTF, the group claims 27% of its turnover in the "non-communication sectors", and targets 45% by 2015. "Non-communication" covers "convergence, IT service/media and global operations", which have something to do with communication but nevermind :
- 'Communication' means wired and wireless comms + call centers (KRW 18 Tn in 2010, 22 in 2015).
- 'IT service/media' stretches over 'SI/NI, cloud, solutions, contents', so typically Software as a Service (SaaS)... (evolution 2010-2015 : KRW 2 to 6 Tn).
- 'Convergence' includes 'communication-finance convergence' (KT will absorb BC Card and challenge more directly Hana SK Card or the duo SK Telecom - Hana Card), 'car' (KT Rental), 'security', 'ad/commerce' (evolution 2010-2015 : KRW 4 to 8 Tn).
- 'global operations' collects the rest : 'investment, IT and communication' (!), and probably real estate (evolution 2010-2015 : KRW 1 to 4 Tn)

In this last category, KT intends 'to expand its global markets for Smart City, Cloud, and ICT Solutions', and 'to secure more than ten new business items, such as Smart Home, Smart City and Digital Signage', or to 'develop globally competitive products and services and consider expanding its business worldwide from the launch of a project, as in the case of KT Kibot and CCC'. For your information : KT Kibot is a cute robot.

CCC means, of course, Cloud Communication Center. And that's where Korea Telecom and Softbank decided to create a 51/49 Joint Venture next September : a huge cloud data center will be created in Busan, with a back-up system in Seoul. A smart risk management move from ethnic Korean Masayoshi Son : the March 11 earthquake + tsunami followed by Fukushima meltdowns caused major business disruptions and massive energy shortages. This center will start with a 6 MW capacity (the equivalent to 700,000 PCs or 10,000 servers according to KT), and quickly reach 20 MW. A dedicated 10 GW line will secure the traffic and that's another reason why Korea's second biggest city was chosen : it's very and one of the closest to Japan (210 km or 130 miles), with all the right IT and human connections.

Yet. If Korea is spared by tsunamis and earthquakes, it is frequently attacked by North Korean hackers, and that's the reason why mobile banking and finance, a traditional strong point in the country, is not booming as fast as smartphone sales.

NFC-based Google Wallet* will have to overcome even more resistance there considering the company's image in Korea these days and the intense lobbying campaign from local netcos against its potential dominant position.


mot-bile 2011

* see "Coming soon: make your phone your wallet"

Korea : Nexus One in June, more robust networks in sight

Korea Telecom announced Google's Nexus One (HTC on Android FroYo) for June 2010.

Since Samsung preempted the green android territory and even protected the brand for handsets*, KT will have to find a different angle.

June, World Cup, Frozen Yoghurt... expect something fresher for this smartphone / app phone. Patbingsu style.

KT claimed its 700,000th iPhone sold in May, and boosted wireless data traffic by 17.5 in Q1 2010 vs Q1 2009. Q2 should be much more impressive as smartphones rise on track with 5M units sold by EOY 2010.

And 3D TV is becoming a reality (also on time for the FIFA World Cup), 3D is bound to pop up on Korean mobile phones as soon as possible. It's a matter of pride for Samsung and LG, it's also a priority for local authorities who are planning the country for very very high speed broadband.

That's for 2013. But mobile network capacity will become critical much earlier, even with LTE, and Korea's dominant operators (SKT and KT) are intensifying their aggressive race for WiFi hotspots.

mot-bile 2010

* see "KT claims 500,000 iPhones"

KT claims 500,000 iPhones

We've seen earlier how Korea, a laggard in smartphones, woke up with the help of iPhone* and the arrival of Android**. Now "smartphone" and "apps" pop up anywhere anytime, relegating "ubiquitous" or "well-being" to corny conversations. Among recent developments :

. KT announced today that it sold its 500,000th iPhone four months after launch, and that it's now batting a steady 4,000 new ones every day. Good score, but Samsung's Omnia 2 (Windows Mobile) will remain ahead (600,000th handset sold yesterday). Yet, Apple reaches beyond the smartphone, and KT estimated its market for apps, contents and software at KRW 470 bn, plus KRW 230 bn for accessories (KRW 700 bn means about USD 600 M these days). Unsurprisingly, early bird iPhone caught heavy mobile internet users : 44 times more than other KT customers (includes the majority of non users).

. Last month, Samsung made the headlines by snatching Android trademark for hardware in Korea, preventing rivals from branding any Android gizmo beyond the OS. LG's "Andro-1", an horizontal slider with keyboard sold exclusively by KT, definitely sounds borderline. Andro-1 itself is borderline : even if it came after Motorola's MotoROI (2.0) and the Samsung SHW-M100S (2.1), it runs on Android 1.5...

. In a country plagued with voice / email phishing scams, or even North Korean e-blitzkriegs, the brutal success of smartphones was bound to cause a considerable number of attacks much scarier than Rick Astley***. Competition among crimefigthers is quickly going wireless, and local expert AhnLab released new versions of its star antivirus : V3 Mobile for Android and V3 Mobile+ for iPhone. But operators don't want netcos to claim their own territories and the next day, mobile leader SK Telecom decided to offer McAfee antivirus to all its Android subs. Besides, even if for the moment the bulk of smartphone users are over 18, adult content is also becoming an issue...

Local internet powerhouses Naver and Daum don't want to be followers - Daum even planned to equip all its staff with iPhones ahead of the launch. Both are seizing opportunities and multiplying applications, and the coopetition between Korean netcos and MNOs will really become interesting.

mot-bile 2010

* "iPhone rocks Seoul and sacred cows"
** "SK Telecom pushes Android" followed by "Wal-Mart's Vudu Trance - home entertainment and apps"
*** see "iPhone worm raises its ugly head : Rick Astley"

iPhone rocks Seoul and sacred cows

KTF will probably sell between 300,000 and 500,000 iPhones in Korea, and Apple make a big splash for Christmas.

The buzz has been building up for many years, people have been massively preordering iPhones (over 60,000 units, to be compared to an estimated 400,000 base of smartphone users in Korea), and well ahead of the official release (yesterday), massively purchasing iPhone accessories.

As we mentioned before (see "iPhone wakes up Korean mobile internet market"), Apple will probably be associated with a boom in usages which should have happened much earlier : it's less a matter of design and hardware (Samsung and LG handsets have caught up in user experience), than a litany of missed opportunities, protectionist regulations, and terrible marketing (dissuasive pricing for data, app stores launched much too late...).

If Korean operators and manufacturers have no one to blame but themselves, at least KT / KTF will enjoy the exclusivity for awhile. And the context is perfect : hipsters don't have much choice for Xmas, all high tech fields considered. There are fantastic TVs out there, and the World Cup is coming soon, but that's a completely different range of prices.

Speaking of which... a "basic" iPhone 3GS 8 giga costs KRW 132,000 (about USD 112.6) for a 2 year subscription at the "basic" rate of KRW 45,000 (about USD 38.4 - the kind of basis many MNOs would love to boast). The 32 giga reaches KRW 365,000 (about USD 311), but the price goes down to KRW 264,000 for subs with a KRW 65k plan, and to zero for premium customers (KRW 95k / mo).

That's much more aggressive than what competitors expected, but Apple and KT obviously learnt a lesson from China, where the device struggles. Apple didn't want to fail in the homeland of two major rivals, and decided to forget about short term rentability.

What does it leave for rivals, beyond negative campaigning ? Differentiation by technology ? There's no DMB on iPhones, and that's the key techno for mobile TV in Korea... for the moment. And SKT customers pay for DMB TV, not KT customers...

You get it : the only way is to join the price war. In other countries, rival operators could counter the iPhone with a wider range of terminals but here, LG and Samsung control 90% of the market. Samsung and SKT united to discount iPhone rival Samsung Omnia2 to the max, dividing the price by two or three, and giving it away for subs who pay KRW 95,000 per month. The beauty used to sell for KRW 900,000, and incredibly enough, price cuts only started a few weeks ago, and by not even 15% ! So instead of acting as leaders and making the most of their window of opportunity, they wasted it milking the stupid cow.

By the end of the year, that will change. And the local smartphone market shall look a bit smarter.

mot-bile 2009

SK Telecom's Wild Hana Card

Since their coming out as an item on May 22, SK Telecom and Hana Bank have been advancing on their JV project (Korea's leading MNO taking 49% of Hana Card, the credit card unit of Korea's #4 financial group).

SKT seems to be seizing a great opportunity : Hana is lagging in the card business, and regulations were eased after the crash last autumn : big non financial groups, previously forced out, were ripe with cash. But even without Hana, SKT is not a small player in cards and financial services.

SKT's mother company, SK Group, boasts 30M OK Cashbag card members. The operator's own loyalty card is used by 40% of its 23M customers, and Moneta, its mobile finance / mobile payment platform, is already one of the most advanced on earth : wired and wireless, Mifare contactless payments for subway, hundreds of thousands of dongles across the country, 3G USIM / EMV Over-The-Air, T Cash / Mobile T-money - a partnership with T money... SK Telecom is the closest thing to a bank you can get in the MNO world.

Financially, the partnership could secure the MNO's business model in the long term at the national level, and facilitate the internationalization of its platforms.*

Hana doesn't bring much of a customer base, nor even disruptive solutions, but certainly new marketing opportunities. A more comprehensive understanding of customers would come handily for a mobile leader who tended to loose his fabled mojo.**


* see "SK Telecom's Semestrus Horribilis"
** see "KT-NTT Venture Forum". Well. The integration of Hanaro Telecom by SKT and KTF by KT didn't inspire much both leaders : triple and quad-play promotions badly lack imagination and appeal.

One Stop Selling

Sony and Samsung are showing us how major players are bracing up for tougher times. This could be the final call for big players to simplify market interfaces.

Sony Pictures Entertainment decided to organize itself around one global platform. The US and international divisions will merge to address more efficiently a market that demands swiftness and reactivity.

Samsung will regroup all its local mobile and nomadic brands around the samsungmobile.com hub. At home, the brand needed some taming : Samsung being ubiquitous from real estate to life insurance, most business units had to develop specific brands for each line of products (ie Hauzen for air-con, Raemian for appartments). And it was not only a matter of branding : Samsung Electronics managed specific CRMs for its mp3 players (Yepp), laptops (Zaigen), and mobile phones (Anycall). Synergies seem obvious, to the point of scaring competitors : getting a share of a Samsung customer will get even tougher.

But Korea has reached the point where choices had to be made in favor of convergence instead of competition. The country wasted too much time and money in sterile IPTV wars between telcos, cablecos, and broadcasters, threatening Korea Inc.'s overseas (see "IPTV in Korea", "IPTV wars and WiBro truce ?"). Korea could display its technological know-how in convergence, but no commercial offers.

A converged broadcasting-telecom regulator was created last year (the KCC - Korea Communications Commission), and a few months after mobile leader SKT wolfed down #2 fixed broadband operator Hanaro, landline leader KT is merging with #2 mobile operator KTF. At last, triple play offers and VoIP are taking off. Korea Telecom is advertising massively for QOOK, its new brand for convergence.

The current crisis will accelerate concentration, and a few ambitious players will emerge stronger in both size and R&D. Korean, Japanese, European, or American players cannot afford keeping a defensive profile for long : after stimulating R&D and investments (TD-SCDMA, stimulus plans), China will probably force mergers among telecom manufacturers the way it is pushing carmakers to join forces.

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.

KT-NTT Venture Forum

Announced last May, the first KT-NTT Venture Forum took place yesterday in Palo Alto, CA.

What's in a name ? This is a forum, it features Venture issues, and is led by KT and NTT, the fixed counterparts to KTF and NTT DoCoMo, whose partnership has been already blooming for a while. The brand KT appears first in this new venture, but NTT is a much bigger player.

What's in a location ? Initially planned to host the premiere, Seoul will organize the next round this September. How "neutral" can the Sillicon Valley be ? Both NTT America, Inc. (nttamerica.com) and NTT DoCoMo USA, Inc. (docomo-usa.com) are based in NYC, while KT America's HQ are in L.A. (ktamerica.com). But Palo Alto is home to DoCoMo Communications Laboratories USA, Inc. (docomolabs-usa.com), and NTT serves customers in the US far beyond the national expat community (ie Verio).

What's in a program ? 12 start-ups showed up and off at the Four Seasons Hotel Silicon Valley. 76 avid investors (VCs, Qualcomm, Sony, Samsung, Cisco, Intel & co) attended speeches by CTOs CHOI Doo-wan and Noritaka UJI. Each operator came with staff from 15 BUs. This was obviously meant to go beyond name-card trading and to let the Sillicon Valley take notice : we may not be the new sheriff in town, but we are no small fish either. And we are willing to invest, to make new things happen.

A few days earlier, SK Telecom confirmed the sale of Helio to Virgin*. To go to Hollywood from Palo Alto, you do have to go South...

Both Korean heavyweights are intensifying the competition at home, where KT and KTF will unite and where SKT purchases his way into the home broadband market. The former PTT is becoming more customer oriented and considering bundles (broadband at home with Megapass, IPTV with MegaTV, VoIP with KT, broadband on the go with KT Wibro...).

On the mobile turf, there seems to be a cultural shift these days :

- KTF found its mojo and developped a taste for marketing entertainment**.
- SKT keeps the overall lead (50%+ market share), but seems to be losing some of its cool factor. It is lagging behind his rival in the WCDMA frenzy : 27.4% of the market have been converted at the end of June 2008 and despite a better month by SKT, KTF holds 51.1% of these 12.3M subs.

SHOW succeeded the old SKT way : massive advertising, devoted shops, an aura of fun and buzz. "T" did enjoy the same treatment but with a rather "Deutsche Telecom" flavor : somehow less fun and less buzz. Actually, this zero-affect-non-brand sounds too techno-oriented and not very sexy, while the Show brand is clearly a hit : just compare "show-time" with "T-time" and it jumps at your face.

The leader is putting all its weight on the new USIM-based solutions (that's "T" and "USIM", not a new brand) including contactless payments. The loyalty strategy lies at the core of mobility, in a tiny little fortress of technology, at the very moment the competitor is embracing a more pervasive kind of ambition.


* see "Helio lands on Virgin island" (20080509)
** ditto Voda : Vodafone Music Reporter is to rock and roll with MySpace

Korea : 2G WiBro South, 3GSM North

North Korea (or at least certain parts of the hermitest kingless kingdom) has been enjoying 2G GSM since 2002. And for an even more restricted public since 2004, after the train explosion rumored to be an assassination attempt against KIM Jong-il.

Now the Dear Leader can enjoy movies on the go even outside of his personal bunker-train. CHEO Technology (a Korea Post & Telecommunications / Orascom - 25% / 75% - JV) was awarded a 25 year 3G W-CDMA license earlier this year and obviously started investing ($ 400 M for the network and the license).

Cross the border, China Unicom has been stripped of its CDMA network. New investments in online gaming (30% of Hong Kong's Magicgrids Networks and partnerships with its mainland China Magic Tech Network subsidiary) did not make up for this great loss for SK Telecom.

But the Dear South Korean Mobile Leader announced this week a successful real-time HD video trial of its Wibro Wave 2 : this 2G WiBro claims rates of up to 10Mbps / 37Mbps (up/downlink) will be rolled out across the capital (TTM H2 2008).

SKT wants to market Wibro Wave 2 cheaper than 1G WiBro. KT started its service much later but leads the market. Besides, it is merging its customer service units with KTF and the merger of the two companies seems everyday more probable.

And the competition is raging, forcing MNOs to slash prices for data (ie -30% for SKT phone-mail) and increase marketing expenses (+30% YOY for SKT 2008Q1 - handset subsidies frenzy is back). No wonder SKT's operating income went down 16.3% in 2008Q1.

The worst may be coming : as of July, USIM lock will end and Koreans will at last enjoy the fun of handset and operator switch.

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.

Burning gates in Korea

Seoulites are crying for the loss of the city's ancient Southern Gate : Sungnyemun, also known as Namdaemun, was burned down in arson two weeks ago. The building survived the Japanese occupation as well as the 1950s War.

Korean handset manufacturers are worrying about other another monument : the protective walls around their home market. W-CDMA is blooming across the country, and Koreans are getting used to seeing a USIM card each time they manipulate their much more valuable memory cards, but there is a lock on that one.

This month, the said lock will be partially lifted and consumers will be able to change handsets as often as they want. Provided they're from the same operator, at the beginning. Which limits the second hand market to today's leaders, especially LG (Cyon) and Samsung (AnyCall). But that's a beginning. LG Telecom, stuck to CDMA, can't take the move (no USIM there).

We're still a long way from European standards, but roaming charges are eventually about to drop. With China and Japan, as a start (KTF with its partner DoCoMo). On the fixed networks too, or so I hope : I do enjoy cutting edge home networking and VOD services but what's the point of FTTH ?

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)

SHOW time for KTF

KTF launched SHOW, its WCDMA service, last March 1st. The 1st Million mark was passed on July the 6th and 10,000 newcomers are joining every day (1,277,000 end of July 2007). "WCDMA" is now a cooler label than EV-DO in Korea. And it shows in KTF's end of July figures : during the last 3 month, its market share remained stable despite a 245k subs growth, but EV-DO subs were down (-45k). The 2-3G migration goes on (3G representing 52.8% of total, up from 47.4%) but furthermore, this confirms the CDMA migration has started, even at the 3G level (EV-DO down to 43.2% from 44.3%, WCDMA up from 3.0% to 9.6%).

Enough with boring figures. From a marketing point of view, you just need to know SHOW is the first real answer to June, SK Telecom's cool brand launched with EV-DO ages ago*.

As the name tells us, SHOW targets entertainment lovers in their 20s rather than business segments. And there is that "play" feature in the "O" of the logo. One third of subs use video telephony, especially couples. So KTF decided to launch, after the success of Movie Tariff Plan (1 free movie ticket per month included), a Movie Tariff Plans for Couples. And while they were at it another one for SMS addicts.

International Roaming (traditionaly restricted to the 2-3G CDMA world before) was another major sales pitch, and KTF announces more developments with partners DoCoMo / Conexus Mobile Alliance and Microsoft. Non-handset devices with USB connectivity are mentioned.

I guess it's time for KTF to propose something more relevant for business targets.

http://www.show.co.kr/ / http://www.conexusmobile.com/

* note that, unlike KTF, SKT declares no specific plan for migration to WCDMA. But the mobile leader is obviously and at last preparing triple play solutions with cablecos and fixed broadband players. As usual with a content flavor ("cable TV programs" are mentioned).

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".

Pay-Buy Mobile - DoCoMo inside

KTF will pioneer GSMA's "Pay-Buy Mobile" initiative in Korea this summer, a couple of weeks after SK Telecom's launch of a service with Visa International (30,000 3G subscribers from April on).

PBM combines NFC (which should please Nokia) with SIM/Cards techno (which should please operators), and the initial casting of 14 operators from 3 continents looks strong : overall, AT&T; China Mobile; KALL; KTF; MCI; MTN; NTT DoCoMo; Rogers Wireless; Smart Communications; Telenor, TeliaSonera; Telecom Italia; Turkcell, and Vimpelcom claim 900 millions subs.

Yet, don't look for a SK Telecom, a Orange, a Telefonica or a Vodafone out there. The Sympay syndrom ? The fear NTT DoCoMo might steal the show and try to make PBM converge with its own initiatives (FeliCa and EDY through BitWallet) ?

Don't look for a bank either. At this stage.

What I do see though, is a transcontinental initiative with a GSMA label. And only a crosscontinental move could force a change in Europe, GSMA's birthplace. Up to now, a lobbying deadlock has been preventing operators and financial institutions from reaching an agreement and m-payment from progressing towards standardization. No-one wants to lose ground on one's home turf (mobility, financial services), and no-one wants a competitor to succeed (ie banks blocking deals between cellcos and more reactive players like Visa or Amex).

Should this G14 federate a few institutions across - say - Asia and North America, things may change. No financial institution will want to lose the face on that one for too long.

DoCoMo did put a few coins in AT&T and KTF. An expensive dime at a not always relevant time. We are about to know if they were just playing with one-armed bandits or really expecting some payback.

embedded 3G+ and better rates

Strategy Analytics expects a 60% boom for embedded 3G in 2007.
Wi-Fi has already found its slot on laptops*, WiMAX's democratization will take some time, and 3G offers the best bitrate / security / continuity of service mix around.
In the transitional period before the industry adopts embedded connectivity, PC cards will not be as trendy as they used to. USB modems are cool and more consumer-oriented. Less PC-oriented, too, since more devices are to become 3G enabled. SKT proved it last year (with T Login**), KTF a few days ago (with iPlug, a SBSM - Single Band Single Mode - W-CDMA service), and Verizon Wireless today (launching its EV-DO Revision A service with the Novatel USB720 modem announced last year).
Laptops are definitely ripe for embedded 3G and if possible, embedded HSDPA. W-CDMA was too light for many applications run on a laptop, and HSDPA keeps rocking and rolling across the globe. Even in Korea, the country formerly known as Qualcommland, where LGT will launch EV-DO Rev A during the second half : both SKT and KTF are dumping cdma2000 for the W-CDMA - HSDPA - HSUPA - HSOPA roadmap, both will enjoy a nationwide HSDPA coverage this year, and both mean business.
KTF, for example, did launch iPlug with a USB data card, but intends to HSDPA-enable 50% of its handset line-up this year and 90% next year. KTF will have migrated half of its customer base from CDMA to W-CDMA and beyond by 2008 and 100% by 2012.
There is already a fierce competition in subsidies, and data rates should follow soon. SK Telecom just decided to reduce the data fee ceiling (and the level from which benefits are given) from 200 to KRW 150,000, and to slash its "Ting Data Free" flat data rates for teenagers by 30%. Officially, heavy bills deter many customers giving it a try without a flat rate offer (a generally binding and expensive item). But if boosting new usages sounds a noble cause, defending leadership may be a more plausible motivation for Korea's leading MNO : KTF proved a better competitor last year and will strike very hard in 2007. A new marketing culture is being pumped into KT's bureaucracies at the best moment : after years of regulatory hurdles, IPTV and quadruple plays will at last blossom in the Land of Broadband.


* it should keep spreading though, as the extension of the fixed sphere it was meant to be, and often on voice-centric devices - as it does through quad play offers
** see "T Login for HSDPA, EV-DO, WiBro and YouNameIt" (20060920). But today, I would be surprised if SK Telecom and Samsung were not considering embedded 3G+ as a part of their recent international partnership.

3M DMB subs - SBSM on its way

SK Telecom should hit the 1M mark by the end of this year for its TU Media S-DMB service (4% of which being in-car accesses). T-DMB claims 2.2M users because the service comes for free... but for the handsets, whose prices are bound to decrease : over 2.5M T-DMB devices sold this year, good news for Korea Inc.
Now its KTF's time to shine with a first : W-CDMA - HSDPA SBSM handsets are to be released within days.
And yesterday, the draw was held for Seoul Sup Hillstate appartments (Seoul Forest Hillstate). Among other home networking gizmos, the lucky winners will have an elevator waiting for them each time they park their RFID-enabled cars at their parking spot. From their terrace with jaccuzzi and BBQ, they will enjoy a breathtaking view on the Han river as well as on the collapse of the real estate bubble.

Pervasive Korea in US, China, Vietnam...

SK Telecom seems to speed up its internationalization process, more than doubling its subscriber base in Vietnam within one year to reach the 1M mark and targeting 4M by the end of 2008, which would at last sound like a significant position overseas.
But investors tend to be more impressed by less spectacular moves on more demanding markets and Helio doesn't seem to claim many customers in the US. Yet, SKT's UI, T-PAK, is coming up on some Motorola handsets soon. And NATE just locked interesting deals on mobile search engines with Google, and on telematics and in-car entertainment with GM Daewoo cars (TTM 2008) : telematics through NATE Drive, movies through Cizle, music through MelOn... Korea's leading cellco is eventually leveraging on its Jeju Telematics trials*.
Middleware, content and enablers are a surer bet than airwaves, even if Korea Inc keeps pushing its own technos : strong presence during the 2006 China Int’l DAB/DMB Forum & Expo in Beijing, recent deal clinched on WiBro in the US**...
Airwaves do cross the seas, but the other way : W-CDMA / HSDPA were already gaining momentum thanks to SKT and KTF, and now LG Telecom announces GSM-enabled phones by the end of the year. Of course, LGT will invest KRW 400 bn in EV-DO rA over 3 years (including 170 BS in Seoul), but only 15 will be spent by the end of 2006 instead of the 40 planned earlier.


* see "Jeju Telematics celebrates the wedding of GPS and DMB" (20060510)
** Neupara from Columbia, MD (neupara.com), chose POSDATA for its 2.3GHz WiBro trial in the US. Posco's subsidiary joins Samsung in the US market and Neupara keeps pushing Korean technologies after T-DMB in India. Its CEO, Mr John J. Shin, happens to be a Korean-American.

DoCoMo beyond DoCoMo

DoCoMo will soon expand its HSDPA coverage beyond Tokyo in Japan's major cities. 33,000 FOMA HIGH-SPEED handsets were sold during the first month of operation last summer and the MOVA / FOMA ratio fell from 54% to 45% between end of March and end of August 2006.
NTT DoCoMo's overall marketshare keeps going down too, but at a much slower pace (not even one point over the last two years). Churn rate even flirted with the 0.60% line lately. But MNP should boost it back up to 0.85%. And Softbank Mobile starts releasing impressive series of 3G W-CDMA handsets.
i-mode still suffers at the global level and e-Wallet / m-payment services seem to be the only promising driver right now : end of August, DCMX claimed 800,000 users (the service was launched in April) and Felica almost one third of DoC's 47.1M customers (15.5M enabled handsets). Besides, iD will share a common platform (PoS reader / writer, data center) with JR East's Suica next January and others will follow soon afterwards (JCB Co.'s QUICPay and bitWallet Inc.'s Edy). But nothing really new under the sun : JR East and DoCoMo have been working on it for over a year*.
Well... "DoCoMo Vision 2010" is getting older and it starts showing. Multimedia and Ubiquity didn't bring any major disruption, and Globalization looks gloomy. In Europe at least. Teaming up with KTF was the smartest move in the past few years.

* see "Zero noodle. Korea goes South" (20050730)

Long Term Evolution and short term profits

NTT DoCoMo keep pushing LTE, 3GPP's new label for Super3G (beyond HSDPA and HSUPA - the last step before 4G), and sets an aggressive calendar : specs completed by the end of next year, TTM by the year of 2009.
Not far from DoCoMo's home turf, both KTF and SKT launched HSDPA and WiBro. The former techno is meant to become nationwide and the latter devoted to dense urban areas only... which means pretty much the same both sides of the Han river. But for the moment, WiBro is only a laptop thing (over 300 bucks per PC card plus a 30 per month plan). Since the Korean netiquette prevents people from using their handsets in the subway (definitely a change for the better for passengers), I'm not so sure everyone will connect everywhere that soon. I'd bet a few more bucks on mini mobile TV players for short sessions. At home, even HSDPA cannot beat FTTH in the appateu areas.
Did you know Korea still represented 37% of all license fees collected by Qualcomm last year ? No wonder their armies of lobbyists keep redeeming their Morning Calm miles to and from Incheon these days. Microsoft also remain under the Korean regulator's fire as well but still have more to lose in Europe, where Viviane Reding could furthermore help broadband multiservice providers catch up financially with MNOs (international roaming charges definitely cannot remain that high that long).