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

Is SKT's MelOn-opoly MP3 game over ?

One day SK Telecom is fined 3.8 billion wons for illegal subsidies and the next 330 million for anticoncurrencial behavior in the mobile music field (these days KRW 1,000 = about EUR 0.827 or USD 1.090).
Even ten times lower, the second punition could be most bitter to swallow : if "subsidies" were a simple breach of clearly written rules (decision by Korea Communications Commission), market dominance demanded a much more complex analysis and reached a much higher level (decision by the Fair Trade Commission). In any case, two blows in a row cannot be considered good news.
The KCC gave SKT 60 days to allow the subscribers to his service to play MP3 files downloaded from other providers.
As seen earlier in these columns, MelOn is Korea's favorite flavor in the juicy market of mobile music, with millions of subscribers paying 5,000 wons a month to download from their mobile phone as well as from the web. Yet, it gives SKT the music major a 60.2% market share on the mobile music market which is only slightly over that of SKT the mobile operator. This isn't what I would call a MelOnopoly. But from the "customer share"'s point of view.
SKT appears to be eventually experiencing the drawbacks of its pervasive strategy, and may not remain free of entering any given market without assuming the burdens of his leadership in mobility. At home at least.
On the other hand, compelled to open up its entertainment / financial / you name it activities could lead it towards even higher ambitions.

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.

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.

RFID shopping and 3G shutting

RFID interactivity starts showing in various shops across Korea. Your mobile phone remains quiet but that shouldn't last long. Major retailers prefer developping their own screens to enhance customer experience : as soon as the shopper picks a product on the shelf, a screen nearby displays more information about it. Just a few items enjoy this feature for the moment but that could be a blessing - you don't want everybody around hearing about the performance of the hemorrhoid treatment you just discretely dropped in your caddy.

Can things possibly go worse for LG Telecom Inc ? The Korean cellco will lose its 3G cdma2000 license, about $300M (the part of the license fee they already paid) + $100 M in fines, and finally its CEO. From the start, LGT was doomed for being Korea's only non-W-CDMA 3G license holder*. More bad news for Doc Jacobs in Qualcomm's former Kingdom...

Things can definitely go bad in Korea : VK loses everything and one should expect more bankrupcies among Korea's small to medium sized handset manufacturers. Samsung looks untouchable as it becomes China's most recognized foreign brand, but profits start shrinking, and not only because of a stronger Korean Won.


* by the way, while launching 3G+, SKT started talking about HSUPA and released their Q1 2006 key figures... starting with a T1 figure : TU Media claimed 534,000 S-DMB subs end of April 2006 (1.2M expected end of year). We'd like to see the end of Q2 stats and the impact of subsidies... Note that GXG joined MelOn and cyworld as a key PR tool for the new King of Content... who doesn't deliver any data yet for his 3D game portal though... MelOn's 5M subs and mobile cyworld 286,000 active users brought respectively KRW 16 bn and 13 bn in revenues over Q106 ; the equivalent of 0.63% and 0.51% of SKT's overall revenues. But the recent deal between SK Communications and T-Online should boost cyworld across Europe... soon on a T-Mobile phone near you ?

MySpace Mobile On Helio with Hero and Kickflip

This isn't the latest George Lucas flick but a series of announcements made last week by Helio LLC (SK - Earthlink's Haryuwood M-VNO aimed at the younger generation)*.
We knew SK Telecom planned a rather ambitious fun-based strategy to succeed in this year's highly competitive draft (Virgin & co). They seem to be delivering the goods : a key partnership with MySpace, and two exciting 3G EV-DO handsets :
. the Hero by Pantech & Curitel : processing power optimized for music & video plus stereo speakers (MelOn anyone ?), a 2 megapixel cam with digital zoom & flash (straight from your mobile to your MySpace blog), a superb luminescent screen and even a removable memory...
. the Kickflip by VK Mobile : a swivel handset with the Hero capabilities, said to be addictively ergonomic.
The surprise comes from the deal with Murdoch's MySpace, a competitor to SK Telecom's Cyworld (even if the latter's popularity mustn't go far beyond LA's Koreatown this side of the Pacific Ocean).
To me, this proves how determined Helio are to succeed. Size matters, as well as Time To Market : the MySpace community claims 5M new members every month and must be reaching the 50M mark...
How long will this exclusivity last ? Even if it's for a few months, that's definitely good news for the marketing and sales teams : other partnerships should follow soon.
And who knows... Why not an even bigger deal with Sir Rupert ?


* See "Hello Helio - here comes the sun" (20051118 + the previous posts related to Helio / SK-Earthlink).

SK Telecom - the year of the milking cow

I must confess financial data tend to bore me. SK Telecom's figures for 2005 look nice enough, even after retracting SK Teletech's sale*.
Considering the competitive circumstances, keeping a 50.9% market share and adding 750,000 subs inspires respect. The success of Wireless Internet (26.6% of all cellular service revenue) should be tampered by the vastness of the definition of "wireless internet", but no one can contest the achievements of MelOn and Mobile Cyworld, or the ingeniosity of the MNO's data plans.
2005 was yet another exciting year for them (even when followed from this not so exciting blog), but also a year of restructuration with spectacular changes in management and a significant marketing rationalization (the marketing expense to sales revenue ratio went down from 17.2% to 19.2%).
2006 should be less juicy from a financial point of view : SKT must invest in HSDPA, face the competition of DMB-T and Wibro at home, and push abroad... but the year could prove much more exciting from a strategical point of view, especially in the contents / partnerships arenas and in the US**.

* see "Hardware behind, hard work ahead" (20050504)

** see "Hello HELIO - here comes the sun" (20051118)

IPTV and happy TV

Korea already enjoys 12M broadband connections ; about 80% of all households or 25% of the population, compared to about 45% and 80% for fixed and mobile lines. Yet, genuine IPTV cannot be launched, limiting Korea Telecom to a few symbolic demos despite their ambitious plans for 2006 ($300M). Now they're talking Q2 2006 for an actual launch.
The Korean Broadcasting Commission, backed by the country's powerful cablecos, plays it "over my dead body" : IPTV is broadcasting stuff, not to be regulated by a telecom body.
Elsewhere, Mobile TV is still struggling. We're not hearing much about TuMedia stats and SKT officials are more verbal about MelOn (600k paid subs out of 4M).
Anti-competitive issues notwithstanding, Korea's MNOs would certainly love to put a few wons in classic TV channels. And I guess with higher stakes than NTT DoCoMo in Fuji TV.

Hardcore gaming

According to Marketing Insight, 40% of Korean mobile users are also m-gamers - over 6% for hardcore mobile gamers (daily use). If you want to know what a Korean hardcore gamer is, ask Mr Lee : the 28 year old collapsed after playing 49 hour non stop in a PC Bang. Mr Lee would often stay there 3 days in a row but this time he died. No wonder : I tried the same game ("World of Warcraft") in a PC Bang and had to leave after one hour, my heartbeat pulsing a steady 359. Around me, people wouldn't leave the screen one second, even while ordering ramions or pizzas with their mobile phones. I also left because I had been methodically buldozed, nuked and vaporized by a giant bug army (who happened to be controled by a 12 year old), but luckily enough, I survived in real life.
Now you can turn your own home into a PC Bang : in http://ftth Korea (Fiber To The Home), 100 Mbps rates are getting common and BcN (Broadband Convergence Network) first pilots are starting in Seoul thanks to DaCom* (a broadband-VoIP-broadcasting triple play for the 350 first customers). The Government wants every Korean to have at least a 1 Mbps connection by 2010 and the country proved it could deliver.
I wonder how life in appateu will look like when everybody's playing with 3D goggles on an ultimate shoot'em all...

* Among the other 3 BcN consortia, those led by KTF and SKT are focusing on wireless first (unlike DaCom, their core business) : real convergence in BcN may take 2 more years and both players already enjoy key entry points in the country's households. Note that KTF launched their mobile music portal half a year after SKT : dosirak started last may (download & streaming services - 192 Kbps for streaming, interesting coupon packages) and should get 300,000 customers by year end (MelOn targets 800,000 paying subs at that time out of 3M total subscribers - they hit the 2M mark after 7 month).

From Hallyuwood to Hollywood

Remember when WAP emulators were all the rage ? They kind of fell into oblition because of that WAP thing and because of that 3G fade (I'm so customer centric I do have to film the damn guy holding the device, even if it saturates the surfer's not-so-broad-band connection.
Now SK Telecom just released an emulator for their new services and it sounds like the perfect remote control. For the enduser (in order to control the said services) as well as for the operator (in order to control the said enduser).
SKTWorld provides a good start to the victim of their massive ads : Nate, June, Moneta, NateDrive, 1mm, PlayOn, Moville, TU dmb + direct links to the new stars on the block (MelOn for music lovers, Cizle for moviegoers on the go, GXG for mobile gamers). As one could have suspected, they leverage on the entry point to get you straight into their databases - they don't care whether you're already a customer or not : they presume the customer experience is so much fun you can't resist and go for the actual thing. You're a customer and you have the required device ? You can download the app at once and enjoy a free trial on it ("Free Experience Tour"). You don't have the device yet ? Order it, and customize it while you're at it ("Peripherals Mall"). You're not a customer yet ? No sweat : shopping or portability are just one click away.
SKTWorld goes further thanks to an Amazon-like collaborative filtering system : beyond the usual tailor suited piece of advice ("My Type Mobile" guesses the best service after your usage patterns), a "Mobile Together" feel-good concept (this goes too far for you not-so-early-adopter you ? don't worry : here's what fits people your age and sex).
But SKTWorld is bound to go even further. Just like the juicy MelOn, this is a dotcom website, not a dotcodotkr nor even a dotnatedotcom one... And by the way, SK-Earthlink just announced new headquarters in Westwood, Los Angeles. We're not talking Koreatown but Hollywood / Beverly Hills lads, the expected next step for SK "Hallyuwood" Telecom (from the beginning we expected business oriented SK-Earthlink to enter the multimedia arena). And the company is hiring. Staff for a start. Consumers should follow soon.

Flux your muscles, watch your wallet - music for a song ?

Viacom's MTV selected Japan and KDDI for their first subscription based music video service over 3G (Vids over 3G EVDO, then). I don't care if it raps, rocks or rolls but this rather sounds like classical music to my ears.
The other side of the East / West Sea, Korea's Daum are about to offer music for free to all their customers. Well, you can LISTEN to up to 3 songs a day within Musiccity's 400,000 song library, but the service usually costs W3,000 per month. All you have to do is being one of Daum's 35+ million subs. Obviously, the former leading portal seems allergic to MelOn, a key factor of success of SKT's Nate nowadays, along with Cyworld, the leader in homepages, a serious competitor to the Bank of Korea thanks to their quasi-currency loyalty program, and one of Musiccity's big customers. Because Musiccity is into "background music" and this kind of music seems likely to be heard far beyond its original mobile devices (elevators) : even if you can't podcast it, you can have people hear it wherever you post things (personal pages, blogs, e-mail ?). You don't even have to buy the latest 2.5 Gb-mp3-7-megapixel-4WD-phone to enjoy it*.
And what do the music majors think of this ? The Korea Music Copyright Association just gave their blessing, considering Daum already pays W125 / month / user.
Well. Once again, Korea's leading major is now a 60% SKT subsidiary.
A smarter combo ? Amp'd offers more than background music : back-uped content. I like the "safe haven" approach (for each download on your mobile phone - including mobisodes shot at Amp'd's brand new studios or your own content-, the US 3G EVDO MVNO will provide a simultaneous remote download), but I wonder if Amp'd can deliver before the big league players tune in, especially when they also envision ambitious multiplayer experiences with InfoSpace. Anyway : more hype announcements for Motorola and Kyocera, the suppliers supposed to release nice new handsets for Amp'd this fall. Remember lads : the word "fall" is zweideutig, and Moto have also been supposed to deliver ipod phones soon for a while... Verizon could hold the best spot for a takeover, being Amp'd's host through Verizon Wireless, but also a major US LLO.
Whatever the outcome, at the age of many-stop-storing and collaborative purchasing, at the age of Snocap and Mercora, you need a considerable reach by yourself and through your partners, but also more and more through not so loyal endusers.

Stephane

* You'd better invest on iRiver's latest player for your kid (ReingCom are now targeting the babies - I guess they'd better diversify beyond portable multimedia players). Anyway, any device will be more fun than Movida's : even in Puerto Rico you can't make people believe a Nokia 2270 will mobile-ize their life ("Moviliza tu vida" / "Get moving with Movida"). Talking about a revolution and an innovation... heard about Virgin Mobile's "disruptive" new service with BT Livetime ? TV over radio and an exciting EPG (Electronic Program Guide). That's DAB and SMS alerts... Radio Definitely Killed The Video Stars.

MelOn with a slice of pie

As expected (Hardware behind, hard work ahead - 20050504), SK Telecom are moving at high speed towards content : after taking a couple of months ago a slice (21.7%) of IHQ, a producer of TV shows and soaps, the Korean leader in mobility (and instant messaging as well, NateOn extending its edge over MSN Messenger) just purchased 60% of Korea's leading music major (YBM Seoul Records) to boost its MelOn mobile music portal. Their deep pockets should help them cope better than Daum with Lycos. The new and improved SKT should also pray for the Korean wave (Hallyu) to last longer than the fad for Bae Yong Joon.

2005 : how about Europe ?

So 2004 is over, with WCDMA reaching the 16M user mark globally (up 60% since end of Q3), essentially thanks to three players : DoCoMo (migration speeding up in Japan), 3 (cheap voice sells and there's no better way of attracting stupid European men than displaying some soccer action) and Vodafone (at last at ease with marketing). As expected, the technology is starting to catch up with CDMA2000 (145M users end 2004, up from 100M in july, thanks to 107 operators covering 53 countries) : WCDMA just represents 10% of the total 3G customer base, but already 32% of Qualcomm's Q4 royalties (up from 12% one year earlier). And doc Jacobs is speeding up on HSDPA.
But Qualcomm are also investing in Europe, and a much clever way than they did with Dolphin (a genuine TETRAgedy). The cdma family is saved, Brew enjoys its own market like any Microsoft me-too product, and the battle may well move closer to the enduser. Look how Mr Q purchased Europe's Trigenix, a specialist in user interface. Look how they sell their mobile broadcasting MediaFLO techno in the US : it's all about user experience (no progress bar, less consumption, easy shuffle...), at a time when Orange marvel at the daily 25 mn their Orange Intense early adopters spend on live TV in France... but don't realise yet this may not be the best technology to perform this basic task.
Another interesting move, from Asia to America this time : the SK-Earthlink JV, a MVNO projecting 3M subs and a $2bn turnover by the end of 2009. Smart move from both players - a perfect match in a coopetitive world. The days of the merger with Mindspring long gone, Earthlink claims about 5M subs and its wireless MVNO experience shows a strong focus on business and data services. SKT has it all, plus the wireless expertise, the consumer focus and the entertainment touch. Wireless internet services represented 20% of their 2004 ARPU, almost 24% during Q4 (24%, that's about the percentage of the mobile users who had some mobile multimedia experience beyond sms in France !). Yet if they want to implement all their success stories in the US, SKT should expect some resistance from powerful lobbies (ie banks vs Moneta, music majors vs MelOn...). But they survived portability and managed to gain more than 400K customers last year. And succeeding in the US is a strong commitment.
How about Europe ? There was a time when its players ruled 2G. Before the 3G licensing madness, a few did have some vision but much too early and with the wrong priorities (remember Telefonica ?). So forget about an aggressive agenda in Asia or in the Americas. But who knows ? Sometimes it pays not to be the first to blow a bubble.