As Daum goes (a bit) mAd, SK Telecom jumps to L Commerce and Mobile Virtual Banking Operator

I've been expecting a lot from Korea's leading portals Naver and Daum*, but so far, they've not exactly revolutionized mobile internet. For instance, they've only recently set a timid foot into mobile advertising**.

To their credit, it's hard to get a slice of the wireless pie consistent with their impressive web portal market share, even after the implementation of USIM cards, which undermined Korean MNO's lock on handsets, and even after the rise of smartphone apps, which also weakened their positions on the value chain.

According to KoreanClick, #1 NHN / Naver controls 63% of the portal market (31 M Unique Visitors for Naver.com in April 2010) and #2 Daum 21% (28.9 M UV), but #3 Nate (10% MS, 24.7 M UV) can leverage on key enablers provided by owner SK Telecom : the leading cellco, already a quadplay giant, has always put a lot of importance on Location Based Services and financial enablers.

That focus has become even more evident with the creation of the Hana Bank - SKT JV (see "SK Telecom's Wild Hana Card"), confirmed by the first services earlier this year***. The recently rebranded Hana SK Card targets 400 to 500,000 cardholders by EOY 2010.

SKT has also been redefining the "mobile wallet" concept over the past few weeks : leveraging on Visa PayWave radio frequency technology, the "T Smart Pay" (always that "T" umbrella brand of SKT's) concept allows the consumer to monitor up to 8 credit cards, 30 mileage / point cards, and 50 coupons with the same '13.56MHz RF SIM' card (always that "technerdy" trend of SKT's), to the risk of storing all your most critical information on one single device. Each time you present it for a contactless payment, you're proposed the choice between all registered cards.

Of course, Hana SK Card holders can also enjoy a simplified UI :



Here, SKT almost acts like a Mobile Virtual Banking Operator roaming on tens of rival networks and helping the consumer make the most of each buck, picking the best provider depending on the store, account status, promotion... Needless to say that this entry point will be massively exploited for contextual offers : ever since NATE Coupons, SK Telecom has been a major innovator in couponing and in July, SKT will launch 'L-commerce', a new set of Location Based Services bound to confirm the return of its mojo.

About ten years ago, I was impressed by how deep this player ventured into new trades like media or banking. Since then, SK Telecom didn't fully succeed overseas as a classic mobile operator, and at one moment lost some appeal as the marketing king at home, but lately, it seems to be experiencing a revival. Even telematics are back in fashion (SKT MIV / Mobile in Vehicle).

Note that on the more traditional battlefield, SK confirmed 8 more Android handsets by EOY (see "SK Telecom pushes Android"), and KT remains the most likely guess for the iPad exclusivity : Apple's latest gizmo is being approved for import, and TriGem, Samsung, and LG will suffer from a minimized delay before their own tablets****.

mot-bile 2010


* see "KT claims 500,000 iPhones"
** "Daum rolls out mobile advertising network" (JoongAng Daily 20100511)
*** see "Wal-Mart's Vudu Trance - home entertainment and apps"
**** see "Samsung S Pad in a Flash"

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.

Jeju Telematics celebrates the wedding of GPS and DMB

Jeju-do, Korea's capital island for honeymooners, has been a test bed for enhanced telematics since 2004. When the trial period ends next July, the Jeju Telematics consortium promoters (beyond the MIC and a few VCs : SK Telecom, SK Communications, SK C&C, Samsung Electronics...) could start exporting the concept to mainland ROK.
Nothing revolutionary there : LBS, 3D navigation, multimedia broadcasting... but you can tell SKT are involved : e-mail since the beginning, Cyworld, DMB games and TV for the second phase started last month. Samsung's 3.7 inch touch screen PMPs (Portable Multimedia Player) complete the multimedia oriented consumer experience. It definitely beats NATE Drive's handset craddles for seamlessness.


=> Jeju Telematics website : http://www.jejutelematics.com.

Subsidies - 2nd Korean Wave

KTF ignited Korea's second round of handset subsidies* and SKT followed yesterday. Consumers don't quite understand the sophisticated grids proposed by the operators but the message is clear : you'll get more if you're a loyal big spender.
For example, at SK Telecom, you're still offered 70,000 wons if you joined the company during the last three years and if you spend less than 30,000 wons per month... but if you've been a client for over 8 years and spend over 90,000 wons per month, subsidies reach 240,000 wons and that's a 26% increase since March the 27th.
People who joined the back-then-not-yet-broad-bandwagon in '96 and spend about 80 euros per month are either business users or deep pocket early adopters (if not both) : core targets for such expensive next gen devices as DMB handsets.
The thing is SKT badly need to boost subscriptions to TU media and its business flavor TU media Corp**. End of March, almost all SKT consumers had WAP enabled (99.5%) and color (92.8%) phones. And it looks as if not everybody will need 3G (unless the operator gives up 2G) : EV-DO penetration reaches 44.6% (of which 90% are June enabled), but the score was already 38.3% end of March last year and SKT started before Japan's KDDI, a 96% 3G cellco***. The same could be said about Nate - active users stuck around 55% of the customer base.
Actually, from a wireless ARPU point of view, I'm not sure TU is such a great booster. But far beyond, the transformation of the cellco into a powerful multimedia broadcaster and content provider remains impressive.
SKT's other growth engines require time : m-commerce becomes mainstream (and it shows in ARPU), but international operations remain quite small (of the 20 M global customer bases, 19.7 M live in Korea...). We'll see how Helio** performs in the US.
And we'll aslo see how KTF performs in Korea with W-CDMA and his new international partner NTT DoCoMo...


* see "Saving private Korea Inc - back to subsidies, but no way back" (20060326).
** see previous posts on SKT's S-DMB service (TU) and US M-VNO (Helio).
*** even if you cannot compare the circumstances : SKT a leader in a pure CDMA country, and KDDI a CDMA laggard in a PDC country (who became #2 thanks to an aggressive 3G strategy).

Handle with e-care - China-aware pro gaming

Still keepin' an eye on SKT's stats, and especially TU media (following Slomobile TV) : now covering 84 cities, the mobile TV service claimed 200,000 subs after almost 5 months of operation. That's about 1,400 customers a day, but this average is supposed to be 2,400 nowadays (the first 100k took 2 months and 22 days, the last 2 months and 6 days). 90 more days at this pace would bring them over 400k subs at the end of the year and I guess they can push to an average 3,500 with the high season coming but they'd need a strong 4,500 to reach their original 600,000 target.
More impressive : last summer and 5 years after launch, e-Station (SKT's e-CRM portal) signed its 10th million customer. The service averages 160K users per day (70% being in their 20s-30s) and 16.4M acts per month (about 3 times as much as over the phone). Many MNOs would die for such figures.
For those as well : over 94% of SKT's customers are equiped with cdma2000 phones, now dubbed "2.5G"*. 84% have color screens and 52% are active Nate users. The mobile portal keeps improving and proposing new services, but the operator knows "wireless internet" is not the only field beyond voice. Hard to tell how m-finance and banking are contributing.
As far as international is concerned, I'm still expecting some juicy fruits from the SKT-Earthlink partnership, but the only news came from the MNO's professional gamers' team, T1, which drafted two Starcraft players from China. I don't know whether these hardcore gamers are ready to die for their new bosses but the mobile arena could be safer than a PC Bang : a 23 year old Briton, Darren Prior, was recently saved by his LG U8210 during a bank robbery, the handset stopping the bullet.
Welcome to Korea, the country where operators become bankers and handset manufacturers life insurers.

* still no specific statistics for EV-DO, but good news for 3G UMTS : since SKT are preparing commercial launch of HSDPA early 2006 (Nortel-LG to deliver the goods), they are pushing W-CDMA as well in the South : commercial launch this November for Jeju-do, Jeolla-do and Gyeongsang-do + Busan.

ColorZip unzipped

The first buzz about barcode applications for 2-3G started in the late 1990s, and the usage of handsets as code readers started as soon as cameraphones appeared. Remember SonyEricsson's happenings in the US ? Remember SK Telecom's Nate Coupons in supermarkets ?
But then barcodes evolved. They even dropped the bars and became bidimensional. The dress code switched to friday wear and then rainbow wear as ColorZip added new dimensions : color recognition now, caracter recognition later. For CR, all you need is a camera with 100,000 pixel resolution plus a good network.
MNOs seized the opportunity (SKT's Nate Code proposes virtual stamps (Happypost) and a mobile shopping mall), along with publishers (ie TV programs, IDEE magazine). But broadcasters just love the concept and the interaction with their own programs. KBS invested in ColorZip Korea and both Fuji TV ( Fuji Television Network) and TBS (Tokyo Broadcasting System) put more than a few bucks on ColorZip Japan, which is becoming the entry point for internationalization : Colorzip Singapore happens to be a JV between Colorzip Japan and Colorzip Media.
The franchise is blooming from Korea to Asia (Japan, Singapore, Taiwan...) and Europe (France, Italy...), not to mention USA (patents and partnerships pending). ColorZip could become the de facto standard for m-coding (why not beyond ?). The fun should be catching, and I wouldn't be surprised to see "artistic" evolutions... Definitely sexier than treacherous RFID and carceral barcodes.

Google Mob... (pay $.99 for the unshortened version)

An Everest of paper at Wall Street, Google are supposed to be using actual greenbacks anytime soon. Google Earth recently provided a pleasant gliding experience, Google Desktop 2 a nasty private investigation into Billy Boy's files (Outlook Toolbar, Sidebar, Quick Find), and Google Talk another gun pointed on MSN as Microserves face their gazillionth antitrust attack this side of the Han River*. But many expect the Mountain View, CA squad to put some flesh on Google Mobile or Google Wireless Services. Others mentioned browsers or a yahooish shift towards mediaship... Whatever. Tremors are shaking the Valley and I guess the sismic attacks on Google (these mobsters just suck all innovative people away from competitors) may find their epicenter not far away from Redmond, WA (yet I'm affraid The Big One will be for the man named Gates but who still didn't believe in portals in year 1995).
To be frank, I'm much more excited by the last arrows coming from Amazon : Amazon Shorts could contribute to shaking the old publishing tree as efficiently as the internet did with the music industry**.
I know, short stories are so old media but shorts are of season : short message services still sell, mobile comics and wireless mangas are all the rage and who would dare go on the beach without exposing a 64M-color-3G short movie ? You look great indeed, but you're splashing everybody and if this sea turns out to be a pound you're gonna drown in a pool of bubbles. Look at Wireless TV & Studios Inc. claiming "As MTV developed the language of cable. We have developed the lingo of Wireless TV", and believe it or not we have Nitrous Ltd on board ! Not all people screaming "I'm the king of the world" on the top of both their lungs and the Titanic did make it to the Oscars.

* Among the plaintiffs, RealMedia hopes not to end up as the next Netscape and Daum doesn't get any support from MSN's main competitor in Korea, NateOn (fear of any collateral damage for a dominant player in the mobile arena ?)
** selling short stories $.49 apiece is certainly not a revolution (just like Apple didn't invent anything with iTunes nor with iPod) - it's the players that matter. And the thing is right now you can't publish short stories unless you've published a novel first. Explain this to movie director wannabes.

Humble pies and compulsive eaters

End of June, WCDMA and CDMA2000 1x claimed respectively 28,3 and 186M subs (still no split for 1x EV from the CDMA Development Group), which means since our last count, one semester ago the global 3G market* grew by one third and 3GSM's share didn't take off dramatically (from 10 to 13%).
CDMA is still leveraging on its key asset (compared to GSM-WCDMA, migration remains a piece of cake for operators), but the phenomenon is reaching its limits : "3G" now represents 3/4 of the global 256M CDMA subscriber base (only 2% for the 1,430M GSM family, not to mention the other technos joining WCDMA). Besides, WCDMA is just gaining momentum and will eventually make it in Korea with the help of HSDPA, for which KTF and SKT just agreed on a march 2006 launch**. Even in Japan, FOMA is catching up with 38,7% of the 3G market... less than 2G laggard KDDI but 12 times better than Vodafone KK...
Well. I'm getting nowhere. This WCDMA vs CDMA2000 thing is getting boring. What matters now is what's growing out of this pie.
You'd better focus on players used to claiming leadership beyond the mobile market. While maintaining a market share acceptable by the regulator, SK Telecom claims 10M subs for NateOn or 14M for Cyworld. Their S-DMB service has seduced 75,000 subs within 2 months and still expects 600,000 by the E.O.Y. If you remember, that's far ahead of MBCO's DMB service : MobaHO! reach only 10,000 after 3 months, a poor score for a consortium of 90 companies (including SKT). Beyond the glamorous "Take Out TV", TU Media basically remains a mobile phone and the usage of the service logically contributes to the operator's wireless data ARPU, but this shouldn't be always the case. Let's see how stats will be kept when other accesses appear, when actual new biz starts.


* Well that's the 3G market defined as the sum of the two most relevant IMT-2000 technologies implemented by cellular operators : TD-SCDMA's been delayed again, and neither EDGE nor DECT can be considered 3G. TDD has been implemented but not in the right spectrum yet.
** SKT's HSDPA rates are as follow : 16k wons per month (about $16) for the charge and 2 to 3 megs for the bits. Manufacturers will make sure handsets are on time for the World to see. For the moment, Koreans see WCDMA attracted 3,000 customers in 20 month including such "customers" as the operators' staff and partners...

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.

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.