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"

SK Telecom's Wild Hana Card

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

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

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

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

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


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

KT-NTT Venture Forum

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

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

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

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

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

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

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

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

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

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


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

Korea : 2G WiBro South, 3GSM North

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

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

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

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

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

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

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

All you can eat content

apple is considering unlimited music services, Nokia style. apple cares more about hardware than service. apple somehow feels something has to be done in the format field if it doesn't want the iTunes / iPod / iPhone success to dry up.

SK Telecom IS an expert in marketing mobile services. It owns the platforms and the contents. And its deal with SanDisk last month in Barcelona looks more interesting to me. SanDisk's Flash memory cards + SKT's DRM solutions aim at the mobile TV and PVR (Personal Video Recorder) applications.

OK. Storage is key. OK, there's this thing about CDs going south vs immaterial music et al, and that thing about MNOs enhancing the mother of all cards, the SIM/USIM. And OK, we are more into the Blu Ray / Tera octet hard drive era than in memory card times.

But SK Telecom is venturing beyond the MNO's yard, taking yet another initiative on yet another part of the value chain. And it had been a while since they did something like that. So let's wait and see.

Mobile TV for WIMAX, lingo-free

What's in a name... From IPWireless to NextWave Wireless* and from TDtv to MXtv, the TDD champion abandons the techno lingo for a vocabulary fitter for this meshy / cloudy / blurred world.

Let's forget about the recent controversy about WiMAX, TDD (now), and FDD (soon according to Bill Gateses, someday according to Steve Jobses, maybe according to Arun Sarins, never according to WiMAX haters) ; let's forget about that fabled path towards 4G**: this is about next gen "waves", about giving you the "MAX", about TV on the go.

If you enjoy techno lingo and old style hardware, you can also try Huawei's E510 HSUPA datacard. If your device still has the slot for it next June the 5th.

* see "Social networking for social networks" (20080214)

** see "3G & 4G - WiMAX flirts with ITU" (20070303)

Barcelona 2006 Mega SIM city

Just to wrap up my last post ("TDtv and IP fews" - 20060213) : note that Orange will try IPWireless' TDtv during Q3 2006.

That's not the only news 3GSM visitors could squeeze from "Naranjita", who definitely made the headlines* with their Mega SIM concept : a 512M SIM card meant to handle heavy multimedia stuff.
Come on... You don't want to be SIMlocked for your music as well, do you ?
Not only do MNOs compete with music retailers : they're going at the SD / CF market as well, turning their handsets into slot machines.
The equation : one machine (LG for a start) = one slot = one card provider (your usual casino operator - err... mobile network operator, sorry). And make it quick before Compact Flash takes everything.
The catch ? It's just like in Sin City : your hotel provides you with a superb card to play on all its slot machines but you cannot play across the Strip unless that other casino belongs to the same mob.
More fundamentally : you want your storage device to be compatible with all your gadgets. This Mega SIM makes sense if it boosts your online experience (voice, data) and/or helps you switch handsets quicklier than you change clothes - if it is meant for storage only, you will still need other slots or ports.
Yet, it's about time MNOs realize they can do better with this exclusive entry point.


* sorry for Nok-nok (Nokia 6136 - UMA, GSM / W-LAN, microwave oven and satellite dishwasher), Skype (voice over-hyped with 3 & co), Comsys Mobile (ComMAX, "a full Mobile WiMAX baseband processor")...