IoT as in the 'Internet of Turds'?

If LG U+ got, as expected, the smaller chunk of 5G spectrum in this week's auctions, they sure made a splash with their connected bidet-toilets. 

* 

Let's start with these 5G auctions, where Korea raised 3.6183 trillion won from the 3 bidders, not even 10% more than the starting point of KRW 3.3 tn; just enough to show an illusion of fight. All 3 MNOs claimed 800MHz in the 2.8GHz spectrum, and in the 3.5GHz spectrum, #3 LG U+ got 80MHz compared to 100 for #1 SK Telecom and #2 Korea Telecom. 

Note that SKT just announced successful tests with Nokia on 3GPP-approved 5G SA (StandAlone), a national first following last December's world first on 5G NSA (Non-StandAlone). You can expect SKT and KT to launch on December 1st (the date the regulator set to allow service) to continue their battle over 5G leadership. They'll probably start on 3.5GHz, at least in the capital Seoul, and key entry points such as Incheon. 

* 

Now about that bidet-toilet thing. 

You first have to understand that many people in East Asia already enjoy electronic systems, complete with water noozles and seat warmers. Here, LG U+ teams up with Inus Bath to add connectivity to the Novita model:

This most essential innovation brings IoT to new territories (the 'Internet of Turds'?). From your smartphone, you can pre-warm your seats, or post-flush in case you forgot to do it. Each member of the family can instantly enjoy their preferred water temperature, pressure, or nozzle position, and you will receive alerts if you stay too long, because no one should be above the loo eternally. 

Mercifully, no cameras are connected so far, but in this over-connected country where last week, 20,000 victims of peeping toms demonstrated on the street, there were already cases of perverts installing spycams in public rest rooms...

In any case, paranoids should worry: LG U+ announced that A.I. will john later. Not Amazon's Echo (who wants more echo in this room, or Alexa sending your personal records by email?), but Naver's Clova: when it's (paper) rolled out, you can voice control this new sentient environment.

* 

The good thing with not being the highest bidder in an auction is that you're flush with enough money to become the highest bidet. 

Will LG U+ rivals enter this fascinating Game of Thrones? 

mot-bile 2018

Once GPON a time in the East

SK Telecom announced their 2.5 Gbps service over GPON (Gigabit-capable Passive Optical Network), 5 Gbps and 10 Gbps packages by EOY 2018.

SK Broadband already covers 40% of Korea, and targets 80% by 2020. Showcased in Pyeongchang* and at the recent Inter Korean Summit by KT, 5G shall be launched partly in March 2019 (3.5GHz and 28GHz auctioned), and nationwide in 2022. 

Don't worry about filling the pipes in a country that demands everyday faster services. The traditional mecca of extreme online gaming (MMORPG and esports) is getting addicted to blockchain and bandwidth-hungry services (MelOn HD, Amazon Prime...). If IPTV remains less popular than in France, subscriber bases keep catching up. SKT's broadband and mobile units now claim respectively 4.46M and 8.88M 'Monthly Active Users' (a 25.5% gain YOY for the latter, branded Oksusu).

SKT maintains its leadership over KT for another demanding service, A.I. assistants**: NUGU reached 3M users Q1 2018 (+9.6% YOY - 5M expected EOY), GiGa Genie 'only' 710k. And they are bound to leverage this key entry point in Korean households after the acquisitions of quantum sensing leader ID Quantique ('quantum-safe cryptography' from Switzerland), and the nation's second security service provider ADT Caps.

3M subs for NUGU, SK Telecom's A.I. assistant (presented here by plastic surgery - enhanced artificial assistants)

Anyway, SKT and KT are compelled to boost new streams of revenues: both posted small decreases in revenues following the switch to new accounting norms, and the sword of Damocles that has been threatening to strike them for 7 years might just do that: the Supreme Court confirmed that MNOs can't postpone anymore the slashing of their outrageously expensive plans.

mot-bile 2018

* see "South Cow-rea already cow-nected to 5G". Note that 77.9% of KT subscribers are already on LTE.
** according to them, people using simultaneously smartphones, fixed internet, and A.I. assistants at home will still enjoy more than 800 Mbps over GPON.

Do Seamless 5G Communications Start With Flawless 5G PR?

Last March, NTT DoCoMo, KT, and China Mobile announced technical collaboration on 5G, each one with an Olympic event in mind: Pyeongchang 2018 for Korea, Tokyo 2020 for Japan, Beijing 2022 for China.

China Mobile, who started 5G development 5 years after DoCoMo, is clearly the laggard here. But by its sole presence, the World's biggest operator already brings considerable leverage for the standardization as well as for the ramp up phases, securing the full involvement of an ever progressing Huawei*.

NTT DoCoMo just presented at the Yokosuka Research Park the results of its recent trials**:
- on October 13 with Nokia Networks (2 Gbps transmission on 70 GHz, in Roppongi Hills, with the help of "two new technologies: beamforming, which focuses radio waves in a specific direction, and beam tracking to control beam direction according to the mobile device's location" - beamform me up, Scottie!),
- on October 26 with Fujitsu (multi-BS, multi-device 11 Gbps on 4.6GHz),
- on November 12 with Samsung (2.5 Gbps reception on 28 GHz, in a moving vehicle in Suwon),
- on November 18 with Huawei (MU-MIMO transmission of 43.9bps/Hz/cell, outdoor in Beijing), and
- on November 19 with Ericsson (MIMO 10 Gbps reception on 15 GHz).

A concise and impressive display, and a nice PR operation for a leader willing to show it covers all the bases. I'm curious to see how KT follows. In a nation already 70% converted to 4G LTE, Korea's #2 mobile operator has been the most vocal about 5G, and even about 4.5G following the launch of GiGA LTE last June. The names of Samsung, Ericsson-LG, Alcatel-Lucent and Huawei have been announced for collaborations at the new 5G Research and Development Center (in Umyeon-dong, Seocho-gu, Seoul), and such technos as MIMO, Millimeter Wave, 3D beamforming have already been tested, like multipoint transmission in a moving car (with Ericsson last May, Distributed MIMO, 2 Gbps).

KT also demonstrated 'core technologies' for 5G (5G drone, 5G hyper-virtual reality, 3D hologram), which got a few Korean media confused between 5G-friendly services and 5G 'networks'***.

GiGA LTE or 5G? "Drone Ski Jumping with 5G Network" feeds the confusion

That's one of the differences between DoCoMo's 'engineer/product/provider' PR and KT's 'marketer/service/user' PR. 

We already saw how the pedagogy of 2.5G, 3G, or 4G worked, and we already know that quantum leaps at the operator's level can seem mere upgrades at the user's level. Let's not fret over hair-splitting debates between 'post-4G', 4.5G and 'pre-5G'.

mot-bile2015

* ZTE focuses on 4.5G ("pre-5G" deal with SoftBank)
** "DOCOMO Successfully Conducts 5G Trials in Actual-use Environments - Trials carried out with Nokia Networks, Samsung, Ericsson, Fujitsu and Huawei" (NTT DoCoMo 20151126) - see also "DOCOMO 5G White Paper" (NTT DoCoMo 201407)
*** e.g. "KT demonstrates 5G network at National Assembly" (Korea Times 20150902)

Korea's fourth license reload

According to The Korea Herald (May 29), the Korean government is considering reviving the project of a fourth MNO license as part of a plan to stimulate the market.

Is there a need for another 4G network? Korea is well covered with LTE to LTE-A, beefed-up locally through pervasive femtocells and WiFi. And the three incumbents don't want to sit on their laurels: Korea Telecom promised 5G trials for the 2018 Pyeongchang Olympics, and SK Telecom announced a partnership with Google on augmented reality ("T-AR for Project Tango").

Is there a need for more competition? It depends on the profile of the new player, and the impacts on a M-VNO ecosystem that, at long last, is biting into a pie still dominated by SK Telecom, Korea Telecom, and LG U+.

According to the Ministry of Science, ICT and Future Planning (MSIP), M-VNOs were claiming a 8.8% market share as of April 21 (up from 2.9% in June 2012), thanks to prices on average 57% cheaper than the MNOs.

But it's not as if you had one fourth player with a 8.8% market share, big enough to contest the leaders on more profitable segments. Today, Korea has 27 M-VNOs, most struggling to make their first profit, and likely to never see it. Significantly, their number of subscribers started to explode when they targeted more discount-seeking audiences (the youth, Chinese migrant workers...).

A perennial candidate for the 4th spot is actually a consortium of M-VNOs: KMI (Korea Mobile Internet) revived their candidacy in October 2013, and defending the existing M-VNO ecosystem could be a stronger argument today. In December 2011, the Korea Communications Commission not only rejected KMI's bid, but also that of IST (Internet Space Time lost the backing of Hyundai Group at a critical moment). Note that the KCC also canceled the auction for the WiBro spectrum. I explained a few months earlier ("A Kbiz MNO ? SMEs vs Korea Inc") how the attempt by the Korea Federation of Small and Medium Businesses (Kbiz) to enter the market looked more like a lobbying stunt to push WiBro.

A much bigger fish could also seek the fourth license, with more brand power. Typically, CJ Group is already a major player in telecom, IPTV, or multimedia contents. It has the money to invest on new networks (Daum Kakao or Naver would need serious backing), the customer bases to leverage, and the contents to fill the pipes..., but don't bet on price wars with fellow chaebol on the juiciest segments. 
 
A true new entrant from overseas? Global MNOs know how difficult it would be in a country where foreign majors are seldom allowed to take or maintain leading positions (see retail for example: Carrefour and Wal-Mart already gone, Tesco on the back seat). But joining a consortium, or creating one remains a rare opportunity for international platforms to push their solutions in an otherwise locked Korean market. And nowadays, the dominant platforms do not necessarily belong to telecom operators...

Anyway, expect more lobbying ahead of the government's guidelines, expected by the end of June.

• See also "Daum Kakao, Google Campus... Korean platforms on steroids", other posts related to innovation in Korea.

mot-bile 2015

* "Consortium to bid for 4th mobile carrier in S. Korea" (Yonhap News - 2013/10/08)

joyn or die? forget about KakaoTalk and Anipang?

Remember last year, when KakaoTalk celebrated its 10 millionth user (see "Kakao Talk of the day")?

Well, 1000 days after launch, the Korean player claims 70 M users in 13 languages, with daily averages of 27 M users, 43 mn per user, and 4.2 billion messages. Even if Skype remains far ahead with its 280 M users (and the support of Microsoft* - whatever that's worth nowadays), Kakao Inc. has already become a global phenomenon  - maybe level 5 on Gangnam Style scale - , and remains as ambitious as ever.

The way Anipang on KakaoTalk turned into an instant hit in the competitive game apps arena** probably scared the heck out of pure players (messaging services, VoIP...), not to mention much bigger netcos, starting at home with Daum and Naver, two giants on the Korean market who've - so far - failed to reach international recognition. Note that Kakao Inc. founder KIM Beom-soo is not an outsider: he created Hangame Communications, Inc., and headed NHN after the merger with Naver.

Even top players are paying attention. Sundaytoyz (Anipang's developer) is not Rovio, and Kakao is not Facebook, but I bet many people in Menlo Park start wondering what kind of value the Kakao platform will aggregate after games. And if Big G can leverage its superiority in searches to boost Google Voice (and counter Apple's Siri), the brand itself is not exactly a success.

Of course, the most nervous of all coopetitors are the MNOs, who see their customers use KakaoTalk for their calls and messages, and their own networks, even LTE-enabled, glogged with that booming data traffic. No wonder all 3 Korean cellcos decided to implement joyn, the GSMA's "Rich Communication Services" platform.

To start with, the "joyn" logo is the perfect anti-KakaoTalk: a double black on yellow speech bubble to counter a single yellow on black speech bubble. And RCS brings what operators who cooperate do best: interoperability. As the GSMA puts it in its sales pitch, the solution "delivers an experience beyond voice and SMS by providing them with instant messaging or chat, live video and file sharing across any device, on any network, with all the enabled contacts in their address book".

That's what cellcos will sell to their endusers - something young, sexy, colorful:

But first, the GSMA must convince its own customers, the MNOs, to implement the solution. Everybody must be on board for the promise to be delivered.

So further down the same page, the sales pitch sounds much more defensive and frigthening:

"Don't lose out to OTT  – stay competitive and innovate with APIs

Your consumers are hungry for access to the entertainment and interaction offered by RCS-based apps. Agile and innovative, Over The Top (OTT) providers are exploiting the massive penetration of Smartphones by developing appealing rich communication apps available at little or no cost to the consumer.

Research conducted by one operator discovered a direct link between the penetration rate of cross-platform messaging services and the reduction of outgoing SMS traffic. Without RCS, the decline of voice messaging is likely to be next, as consumers increasingly engage with alternative IP based voice solutions.

Once consumers start using an OTT app service, that offering becomes, for them, the lead brand for communications services. Operators remain more competitive by responding more rapidly to consumers’ expectations and behaviour, and by using RCS to enhance the value of their network and bring richer calls to their consumers."

And those most dramatic final words: "Act now before it’s too late - Implement RCS today!"

Stop pulling your hair out, try this air lotion and stop the airtime loss. We don't guarantee return of love.

And be quick: the end is nigh.


mot-bile 2012

* see "Skype keeps moving, Google googling"
** over 20 M downloads, only on Android (iOS to follow soon)

VoLTE pricing updates

Korean MNOs are still scratching their heads to find the optimal pricing system for Voice over LTE. LTE has been around for a while, but voice is basically using older routes (VoIP, 3G...).

VoLTE is not totally transparent for the user: theoretically, connections will come much quicklier, and sound quality will improve ("HD voice"). Of course, with the boom in smart device usages, the massive transfer of voice to data scares network owners. And the government is adding some pressure to prevent consumers from being charged too dearly (said consumers happen to vote for the next President this December).

One thing is sure: unlimited plans will not be offered as easily, and operators cannot abandon totally the time reference (minutes). More than ever, in-network calling will be promoted.

MNOs met to find common ground in the future, following the disclosure by KT of key elements of their LTE strategy ("HD Mobile Wonderland") and roadmap:
- "HD Voice" trials are under way for KT, with 300 testers and a target TTM of October 2012.
- August 1, 2012: LTE-only rate plans (see below), LTE roaming.
- September 2012: LTE upgrade for ABC Services (Always Best Connected is about seamless 3G and WiFi)
- October 2012: Joyn (HD "Rich Communications Suite") -  HD Games by the end of the year
- November 2012: Olleh TV LTE upgrade from 500Kbps to 2Mbps
- Q3 2013 Multi Carrier LTE starting in Seoul. Quad Antenna

KT's LTE Warp, a service twice faster than standard LTE, already covers 84 cities nationwide, and all KTX lines. The operator aims at 4 million LTE subs by EOY 2012 (1.4 M nowadays), and stopped introducing new 3G smartphones. Note that Samsung Galaxy Note II LTE is also expected for October, and that KT's latest promotions are already preparing the transition, leveraging on the successful launch of Samsung Galaxy III LTE.

The LTE rates introduced in July ranged from KRW 37,400 to 137,500 (USD 37.5 to 119.6):
. LTE-340 (750 MB, 160 mn) adds a discount of KRW 7,700, and if you take the KRW 924,000 Galaxy III for a 24 month engagement, it will cost you KRW 68,200 (USD 59.3)
. LTE-1250 (25 GB, 1250 mn)  adds a discount of KRW 33,000, plus KRW 32,000 for the smartphone, which adds up to KRW 141,667 per month (USD 123.2) over 2 years.
If you replace your phone, KT throws in a lot of free on-network calls to keep you onboard.

The LTE rates starting on August 1 allow data roll over:
. LTE-G650 (KRW 65,000): 6GB, 350 minutes + 3000 minutes in-network
. LTE-G750 (KRW 75,000): 10GB, 450 + 3000 minutes in-network
. LTE-1250 (KRW 125,000): 25GB, 1250 minutes + unlimited in-network (KT wired/wireless)
Now if they could do something about international calls...


mot-bile 2012

Face Recognition: When Smart TV Goes Too Smart

Samsung wants to implement face recognition in certain smart TVs. The function is already available for mobile devices but here, the idea is to adapt content to viewers, for instance in order block adult content when a kid is watching (tadaa - how about Junior in his Spiderman costume?). Swiss researchers have been studying the concept for years, but for a monitor equipped with an arm that allows the screen to follow the user (picture yourself in your kitchen with flour all over your hands and the urgent need to browse recipes).

Speaking of mobile and TV and following our previous updates about M-VNOs in Korea*, CJ HelloVision just launched "Hello Mobile" on Korea Telecom, and the country's second MSO could post interesting figures with the contribution of parent company CJ Group, still a food franchise powerhouse but now the country's multimedia leader (CGV, CGmedia, CJ Home Shopping...). CJ already proposes many mobile apps and multiplatform services (ie tving), but expect more e-commerce synergies ahead, particularly following the launch of Mobile E-Mart, also on KT. Homeplus (Tesco-Samsung) also considering entering the arena as MVNO.

Hello Mobile follows Insprit (Enspert tablet on Wibro) and SRoaming (Skype Roaming phone rental), also on KT, still the leader with a little more than 300,000 MVNO lines compared to about 50,000 for SK Telecom. Remember: KT struck the first deals two years ago*.

mot-bile 2012

* see "A Kbiz MNO ? SMEs vs Korea Inc", "Korea Telecom signs the country's first MVNOs", "Korea : Onse Telecom wants to be a MVNO"

NFC goes shopping : live in Seoul

As announced (see "Grand NFC Korea Alliance"), the heart of Myeongdong, a major shopping neighborhood popular among younger generations and Japanese tourists, will be a key test bed for NFC transactions in Korea next month.

This "NFC special district" operation is organized by the KCC (since security is key, the national authority delegated the mission to its KISA unit / Korea Internet Security Agency) and involves all 3 operators (SKT, KT, LGT/LGU+), 9 credit card companies, and key players and enablers listed last June (more are expected soon, particularly in ticketing / couponing applications).

Now for the hard(ware) part ? Terminals are ready on both ends : 100 shops will be equipped with dongles, and enough enduser should be enabled from day one. The NFC payment solution has already been embedded in the Samsung Galaxy S II and other recent models, and rival iPhones can join in thanks to a plug-in developped for Korea Telecom.

Microsoft might join later, but I'm not sure the Samsung Series 7 Slate has already the solution.

mot-bile 2011

A Kbiz MNO ? SMEs vs Korea Inc

The Korea Federation of Small and Medium Businesses (KFSB or Kbiz) wants to join SK Telecom, Korea Tecom and LG U+ (LG Telecom) as Korea's fourth mobile network operator.

This bid looks like a complete joke : a Kbiz-led consortium of 900 small businesses would invest about KRW 100 bn (USD 94 M) in "4G Wibro". How could it succeed where much stronger players failed and where MVNOs themselves cannot thrive* ?

Kbiz claims 2.7 million SMEs, but I don't see this greenfield player take those demanding customers from the big boys.

WiBro, a WMAN technology competing with WiMax, remains a Koreano-Korean thing with a convenient 4G label. Typically, KT is advertising about their "4G WiBro" coverage as SKT launches its LTE as the "real 4G", but eventually all 3 MNOs will implement LTE. Note that KT is also willing to close its 2G CDMA networks and proposing nice 3G/4G plans to die hard users, some of which have been keeping prehistoric handsets because of unbeatable unlimited rates.

Kbiz needs Samsung to propose WiBro, and that could be the actual aim of the game : not the candidacy to a license, but the PR operation behind the announcement.

Samsung is the ultimate chaebol, the perfect symbol of those almighties who rule over Korean economy and are often blamed for the weakness of the nation's SME ecosystem. Worse : they create their own SMEs to benefit from pro-SME incentives and suck even more value from the market. Even LEE Myung-bak, the CEO president who came from Hyundai Engineering and Construction, is campaigning about a 'fair society' where chaebols would allow small fish to survive.

I don't know if Kbiz will really go all the way, or if Samsung will pretend to play their game for image's sake... but Korean market remains fun to observe.

mot-bile 2011

* see "Korea : Onse Telecom wants to be a MVNO", "Korea Telecom signs the country's first MVNOs"...

Grand NFC Korea Alliance

Ten years ago, SK Telecom would carpet bomb Korea with 400,000 terminals ("dongles") to boost its Moneta mobile payment service. Yesterday, Korea Inc. announced 300,000 NFC-enabled Point Of Sales by the end of 2011 to put the country ahead of the pack in this very very strategic sector.

The difference ? This is not a solo act anymore : SKT alone couldn't succeed in setting the new standard in mobile payments at home and pushing the concept overseas, but this time, the whole value chain and ecosystem is following. And if it works, each player will claim a nice slice of a much bigger pie.

Under the regulator's umbrella (KCC, the herald of "NFC-based Mobile Smart Life Services"), over thirty Korean CEOs met at the Seoul Press Center to sign this decisive MOU in Near Field Communications, and if you throw in the members of the recently formed Grand NFC Korea Alliance, you've got the closest thing to a mobile payment dream team :

- all 3 Mobile Network Operators : Korea Telecom, SK Telecom, U+ (LG Telecom)
- the biggest card players around : Visa, MasterCard, Shinan Card, Kookmin Card (KB), Lotte Card, Hyundai Card, T-Money, MNO partners (Hana) SK Card and BC Card (KT)...
- key authorities and associations : KCC, ETRI, TTA, KISA (Korea Internet & Security Agency), MOIBA (Mobile Internet Business Association), RAPA (Korea Radio Promotion Association)...
- top manufacturers : Samsung, LG, Pantech...
- top enablers: UbiVelox, KEBT, MtekVision, 3ALogics Inc, KICC...
- top payment enablers / billing service providers : KSNet Inc, Mobilians, Galaxia, Danal Corp., KCP...

The only players missing on the picture are the endusers.

And as we saw before, pedagogy will be key in a country where hacking happens to be a national pastime (if you include North Korea in the package), where few people protect their handsets with a PIN code, and where distrust in smartphone security keeps spreading like wildfire.

Of course, "Near Field" meaning 10 cm and below, close encounters of the third thief will require more intimacy than via Bluetooth. Besides, many Koreans are already used to contactless micropayments thanks to T-Money (ie Seoul public transportations and taxis, thousands of convenience stores and vending machines...). Furthermore, NFC trials have been under way for quite a while : for instance KT's "Mobile Stamp" couponing system, SKT's Mobile Commerce Zone or Q Store pilots, or cross border trials between SKT's T-Cash and Japan's KDDI and SoftBank...

This MOU aims at multiplying testbeds and giving momentum to the technology, the bulk of the infrastructure being planned for Q4 2011. So where will NFC-based payments be available ? GS group plans to implement them in its convenience stores (GS25) and gas stations (GS Kaltex). Major retailers (Lotte Mart, Emart...) are joining the party. Seoul and Gyeonggi-do buses and subways, as well as many taxis will be converted. A major shopping area for tourists (particularly from Japan), Myeongdong has been identified as a strategic hotspot to feed the buzz.

Needless to say, the number of NFC-enabled handsets is another essential element in the equation. The alliance targets an ambitious 5 M units by the end of the year, leveraging on existing devices (Samsung Galaxy S II and Sky Vega Racer opened the way), and the Google-Apple war : since Android Gingerbread OS supports NFC, Cupertino had to consider it for iPhone 5.

And oh. This non-event : Samsung is expected to surpass soon Nokia as the world's top handset manufacturer.

mot-bile 2011

* sorry, not yet in English : "국내 통신사·금융(카드)사 CEO 최초로 한자리에 모여 NFC 서비스 활성화를 위한 MOU 체결"

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"

Apple heart(break)s Samsung

Copycats. That's how Apple sees iPhone / iPad rivals. The main culprit and market share holder with its Galaxy lines, Samsung would have infringed no less than 10 patents, 2 trademarks, and 3 trade dress. As much as it hates suing a good client (Apple devices scream "Samsung Inside" from many angles), Samsung will file a counter-suit for less specific motives.

Nokia, HTC, or Motorola also have two-way legal battles with Cupertino, who also faces lawsuits from H-W Technology, or Robocast.

It's like a poke game : sue me ? suits me: I poke back. Forget hardware, OS, platform, or app wars : lawyer layer's all the rage now, and that's where innovation will come from...

Speaking of upgrades : LTE will be commercialized in July 2011 by SK Telecom and LG U+. Korea Telecom will follow suit (no lawyer needed) the following year : if they haven't decided yet with which infrastructure, they can until then rely on a strong nationwide Wifi presence to absorb the smartphone boom (unlimited wireless data plans include free access to Nespot). LG Telecom is probably eager to switch as quickly as possible to a more universal technology than the CDMA allowed by its own 3G license.

4G in SK ? 3G in NK ! On the other side of the DMC, North Korea's mobile market keeps booming : 430,000 subs EOY 2010, not much for a 24 M strong country, but quite big for a place with so few strong people. Mobility reaches far beyond the first nomenklatura circles : this is the place where not so long ago, only a few priviledged people were allowed to have a radio, locked on official frequencies. Here, suits to be feared are less of the law than of the military kind.

mot-bile 2011

Kakao Talk of the day

Kakao recently claimed its 10 millionth KakaoTalk user - or is it app download ? -, including 10% overseas (mostly in the US, thanks to the Korean diaspora, but the service is also available in English and Japanese). Now the Bundang based venture wants to go global.

Good luck : VoIP is a highly competitive field where "incumbent" Skype almost looks like the obsolete PTT running on grand dad PCs. In Korea, Kakao faces giant netco Daum's MyPeople, a more comprehensive social networking tool, or pure players like NeoMecca (OlivePhone app)... not to mention Google Talk, present on all Android smartphones.

Note that rivals Daum and Naver are considering suing Google for its dominant position as Android's favored search engine.

Indeed, the Google brand is indeed reigning on every Android smartphone's main screen, and more discreetely but pervasively present across the app menu : "Talk" for Google Talk, "Maps" for Google Map, "Places" for Google Places, "Latitude" for Google Latitude, "Finance" for Google Finance. Also there : Gmail, YouTube...

What puzzles me most is the way local MNOs deserted the battlefield : where a Vodafone would have branded the UI, KT / Show remains in the background. You know you have an iPhone or an Android device, but the operator appears simply as the hardware salesperson, and a not so proud carrier.

As we saw earlier, Korean MNOs have very poorly prepared for the smartphone revolution, but even now, it almost looks as if they want to dump their own app stores.

mot-bile 2011

SK Telecom keeps Hoppin

While I was blogging about KT's cloud computing services, rival SK Telecom was presenting its own cloud computing platform to the press, N-Screen.

The idea is to make convergence as seamless as possible for the enduser and service providers : the platform automatically recognises the device and adapts the content to it, and all DRM hassles have been taken care of in advance.

There too, your handset is as more a smartphone as a smartTV enabler. It's a Samsung device, of the now well established Galaxy S family, and it's branded Galaxy S Hoppin (among other characteristics : Android 2.2, 1 GHz CPU, 4-inch Super AMOLED display...). Subventions included, it will cost you KRW 300,000.

SKT has already been advertising massively for Hoppin, with an enduser glued to the screen in every context, even asleep. Since Hoppin is also the name of their cloud computing service, they will eventually communicate about other devices (TV, PCs, tablets, fixed phones... - note that more and more models of fixed phones feature a color screen in Korea).

N-Screen is an open platform, meaning first of all that everybody is invited to join. To prove successful, that should include, beyond endusers, more than a few content providers or handset manufacturers.

Same story for Android platforms : SK Telecom boasts about its close partnership with Google in hardware and software development (GED / Google Experience Device, Samsung Galaxy, Motorola Xoom Tablet, LG Electronics G-Slate...), and it is a clear leader at the handset level (SKT sold 83% of all Android handsets in Korea and now averages 20,000 units a day), but the operator is still struggling at the BtoBtoC level, even if developers are proposed a "T Academy" to create more apps for the "T Store".

This press conference followed the announcement of a partnership with Japan's KDDI and Softbank Mobile for NFC-based mobile payment. Smart Poster will be operational in both countries and aims for the global market. Local competitors with exotic proprietary solutions, take notice :

The aim of the trial test is to establish mutual compatibility between countries using NFC as a common international standard instead of existing local Korean or Japanese mobile financial service methods. Currently in Korea, telecommunication companies provide mobile financial services such as credit cards, public transportation, stock trading and banking using a finance-enabled USIM chip called the 'Combi Card'. While Japan's finance service utilizes a self-developed method called 'Felica' by installing a second chip, apart from the USIM, within the mobile device

NTT DoCoMo, a partner of KT, must have appreciated the ironic tribute. Some may hear some bitterness in the tone : as we often mentioned earlier, SKT has somehow abandoned its cultural and innovative leadership to Korea Telecom. It reshuffled its management and pledged to develop a "young, speedy organization", to promote "openness" and "collaboration", and to regain confidence overseas.

MelOn recently made it in Indonesia, and this partnership with Japanese MNOs is really significant, but it will take more to be recognized as a major value aggregator at the international level. Let's see how the new management takes up the challenge.

mot-bile 2011

Communication-finance convergence: KT joins SKT

Seems like SK Telecom's debuts as a credit card operator (see previous posts about the SKT-Hana Bank deal) spurred the competition. Korea Telecom announced yesterday that their participation in BC Card, the national leader, would increase from 1.98 to 35.83% after purchases from Woori Bank (20%) and Shinan Bank (13.85%). KT also negociates a further 4.03% participation with Busan Bank.

Lucky Koreans MNO: they can become content majors or financial institutions just by signing checks. And they formed a common lobby with other financial institutions to promote mobile banking in Korea (SK Telecom and KT with Mastercard, Shinhan Card, Samsung Card).

"Finance-communications convergence" comes handy as MNOs need to completely revamp their business models : voice revenues keep decreasing, and the data equation went crazy.

Significantly, KT is now insisting on Wifi coverage in its smartphones advertising campaigns, and promoting uCloud for consumers also as an IPTV service (Smart TV tomorrow I guess). Remaining a leader in cloud computing is an absolute must... and it sure beats car rentals as diversification (KT are also campaigning about that peripheric service of theirs).

mot-bile 2011

Followers and leaders, hardwares and clouds

CES 2011 will probably celebrate Korea Inc's 3D, smart TVs, or cloud computing successes (see how Korea Telecom markets it's ucloud beyond business and professional targets, towards consumers).

And in retrospect, 2010 clearly marked a turning point for Korea : this is probably the year leadership spirit became mainstream.

I'm not talking about the "can do", "CEO me" spirit, but about a cultural shift from an eternal best follower to a trend setter.

Ever since I first came to Korea 20 years ago, business management has been based on international benchmarking, and executives obsessed with what others were doing overseas. Still now, you can feel this Japanese Complex (how to kill the economic father), or that CEO Complex (how would Steve or Bill think or do ?) almost everywhere, but a top down revolution is trickling down the hierarchy : start thinking by yourselves, go set the pace, all that come on, be a Tiger kind of stuff.

New generation of US-grown Ivy Leaguers instilled strategy into Korean boardrooms, converting top chaebol owners to quality, sustainability, and proactivity. Most notably, Hyundai's Chung Mong Koo or Samsung's Lee Kun-hee had to literally shake their own companies to force much needed cultural revolutions. A couple of years later, both companies shine among the top stars of 2010, but both have yet to confirm and to reach new levels in order to secure their recently claimed leaderships.

There's little choice for them : even if Samsung increases by 18% its research and development investments, competition remains fierce, and Chinese players keep catching up in all major innovation fields.

But this Korean revolution also faces two major homegrown bottlenecks : a SME ecosystem and an education system unfit for the challenges to come. Because paradoxically, the most connected country on Earth generated monsters hampering the emergence of a truly efficient network society.

Of course, this is a country where netizens have more power than anywhere else, but precisely because there's a wide gap between the people and the politic, economic, or media elites. Indeed, Korean society it as the same time too connected and too disconnected.

But let's get back to business, where evergrowing and ever more agile chaebols leave no room for manoeuvre to SMEs : small fishes can only grow dependent from bigger fishes as clients or providers... or end up as trophies in their acquisition sprees. Even at the peak of the economic crisis, SMEs had a tough time hiring or keeping talents because everybody wants to work for a big brand.

Big fishes are only starting to realize they need stronger players around. Take mobile applications, for instance : for years, the most advanced country in mobile multimedia was lacking a balanced ecosystem because operators wanted to control the whole chain and push their own solutions. The irruption of Apple in the local pond did not only wake up the smartphone market at the hardware level, but also the complete middleware and application ecosystem, forcing everybody to open up new stores and to look for new partners. If Korean mobile industry took over Europe ten years ago, it is only catching up now by moving towards a more open ecosystem, fitter for innovation*.

As usual, major cultural changes can't happen without a top-down intervention, and it sometimes takes a whale to set the pond in order : last year, the Korean government had to coerce industry leaders into collaborating with each other as well as with smaller companies on key R&D fields, because that was the only way to compete at the global level.

As a matter of fact, Korea's ultra-competitive culture doesn't prepare for coopetition nor for next generation partnerships : it's all about winning against competitors, being number one, nixing the Other.

The same can be said about Korea's ailing educational system. Ailing ? Korean students fare so well worldwide that this system is often praised as one of the most efficients... but record denatality and suicide rates tell a completely different tale : this system is now completely corrupt and must evolve. If Korea reached the top thanks to a merit-based, social-ladder-friendly educational system, it will collapse if it persists into this unfair, money-based nightmare where creativity is totally castrated, and where young humanoid robots compete in the ultimate dystopian race for conformity.

So instead of celebrating 2010 as the year of the confirmation of Korea as a global power in such various fields as economics, Olympics, or diplomacy, I'd like to expose 2010 as the year the Korean model reached its limits.

As we've seen, change is coming. And I'm confident it will quickly radiate across a society which enjoys an amazing ability to embrace change. The 1998 crisis could have brought an abrupt end to the Miracle on the Han River, but the country somehow managed to rebound, leveraging on regional opportunities (struggling Japan, booming China), but mostly on its own dynamics.

Seoul, the capital city, is showing the way by embracing cultural diversity and collaborative sourcing of new ideas to stimulate the SME ecosystem, to improve everyday life and international competitiveness. And at long last, the national government is reconsidering SMEs as a priority. Unfortunately, the much needed reform of education is not on the agenda of this otherwise very conservative power.

Now is the moment. Flush with money, surfing on an unprecedented wave of international recognition, Korea must have the courage to change key parts of its DNA if it wants to remain a top player.

mot-bile 2011

* Apple itself is not really a model of open business, but that's yet another story

IPTV in Korea (continued) - until really Smart TV takes over

Yet another update for Korean IPTV*. The market is nearing its second birthday, and the 3M subscribers mark : 2.93M as of December the 5th, according to the regulator (Korea Communications Commission).

Leader KT claims more than half of the pie (1.64M), with SKT a distant second (0.691M), and LGT - now U+ - not far behind (0.597M).

Nice, but not that impressive considering the wide adoption of broadband in the country. But as we saw before, the only 3 IPTV operators have faced many regulatory hurdles... which they deserved as the only 3 mobile network operators.

Note that this trio / kartel created SPOTV, a common channel to lock the rights for major sports. They were probably scared by the SBS revolution in the broadcasting arena : for the first time in the country, one network snatched exclusive rights for major sports events, the FIFA World Cup and the Olympic Games.

But I guess they are furthermore unwilling to enter a costly war which could also hurt IPTV as a whole. IPTV now claims 30% of digital pay-TV and seriously undermined their cableco rivals, but competition remains fierce, and one new major player will soon modify the broadcasting landscape: now allowed to enter the race, all major press groups are competing for new TV licenses. For the general channel license, Maeil Business Newspaper, Korea Economic Daily and Taekwang Group have little chance against the local giants : JoongAng Media Group, Chosun Ilbo, and Dong-A Ilbo. For the news-only channel, Yonhap faces CBS, Seoul Shinmun, MoneyToday, and Herald Media.

And IPTV set top boxes are already passe : Smart TVs are all the rage, with their handfuls of apps. The next big thing. They're actually quite cool, but you can't even check your email with them. Except of course by coupling these smart monitors with smarter devices.


mot-bile 2010

* see previous episodes, including "IPTV and VoIP in Korea : an update" and "IPTV in Korea: an update"

Smartphone Overloads and Tablet Scares

Korean operators are just beginning to "enjoy" the dark side of their honeymoon with smartphones : capacity issues. This as smartphone penetration remains relatively low (about 5 M users), and data-guzzling tablets loom on very close horizon (Samsung Galaxy, Apple iPad...).

MNOs can't say they weren't warned : they've been waging a war to secure as many hotspots as possible, rolling out WiFi, Wibro, and all you can eat fiber networks to prevent data overloads.

What puzzles me is the commercial war that accelerated wireless data network saturation this summer : non existent before, unlimited data offers have taken over the country and right now, every other smartphone user subscribes to these proven networkphobic plans. Furthermore and as we saw earlier (see "VoIP over 3G, unlimited data... SK Telecom victim of the summerheat wave ?"), the ones who ignited the war were no others than the ones who risked the most : market leaders SK Telecom. Needless to say, #2 KT soon followed suit, causing #3 LG U+ (formerly LG Telecom) to join the suicical party short afterwards.

Short term vision 101 ? On the brighter side, this madness may help next gen networks bloom even earlier : Korea already targets 1 Gbps and 10 Gbps for mobile and fixed data by 2012.

mot-bile 2010

Korea Telecom signs the country's first MVNOs

A decade after other countries, Korea is discovering the charms of MVNOhood.

Korea Telecom signed 3 partnerships - a classic mix indeed :
- voice-centric Free Telecom (prepaid offers)
- data-centric EverGreen Mobile (EGMobile)
- entertainment-oriented Entaz (mobile games)

Partnerships were clinched via KTF DoCoMo Mobile and the Fast Incubation Center (FIC), the new unit in charge of stimulating the ecosystem around the company, including a Smart Open Forum.

"Open", but to a certain point : none of the first 3 MVNOs is a big name, even in its own field. Bigger fishes were kept at bay, like ONSE Telecom who, as we saw earlier, was a more than outspoken candidate. It rather looks like the perfect alibi for the regulator, and a convenient training ground for new processes and business models : wider "openings" will be requiered, and KT wants to remain competitive at the international level.

Rivals SK Telecom and LG Telecom will probably follow a similar path. I wouldn't expect from the leader a disruptive deal with a flamboyant player... unless of course the said player is a in-house spinoff in disguise (ie MelOn or another multimedia brand, and a business-centric package.


mot-bile 2010

On Your Mark, Get Set, Go

The day after Steve Balmer shook hands with Lee Sang-chul to celebrate a strategic partnership in cloud computing between Microsoft and LG U+ (formerly LG Telecom), Google's Andy Rubin and SK Telecom's Bae Joon-dong did the same over Android Market, to boost the Korean developer ecosystem around the robot version of Shrek (this green Android oger has layers too, beyond the OS stage).

Significantly, the deal was at the CEO level for Korea's #3 MNO and at the VP level for the leader.

Steve Jobs didn't need to show up in Korea, where the Apple-KT partnership ignited much delayed smartphone boom (see previous episodes). Furthermore, he wouldn't be welcomed these days : the war of words between Apple and Samsung has turned nasty in the UK, where the latter countered repeated attacks by the former with a comparative ad in spite of specific orders from Seoul headquarters : Samsung is certainly a major competitor to the iPhone (half a million Samsung Galaxy S sold during the first month), but also a major provider for Apple.

If the Microsoft / Number 3 model is a classic, the Google-SK Telecom deal could prove a game changer in a country where the 3 major operators dominate too much the value chain / value cloud for app providers to multiply, thrive, and become global players.

But overall, between Microsoft, Apple, and Google, Korea Inc somehow confirms its return into the US Inc technosphere of influence.

Korea Telecom's idea of diversification ? Setting up KT Estate, a real estate arm, to manage its already impressive assets : 30% of revenues last year !

mot-bile 2010