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WiBro subscriber numbers: Korea Telecom (KT) far ahead of SK Telecom
Korea Telecom (KT) and SK Telecom launched WiBro services back in June of 2006. While SK Telecom has been very slow in its progress related to WiBro service rollout, KT has moved far ahead. Despite that both companies used a Korean variant of mobile WiMAX that lacks the MIMO, beamforming, and frequency flexibility of mobile WiMAX (802.16e-2005), the reality so far is not as bright as was expected by SK Telecom.
SK Telecom has failed to lure as many customers as expected for its WiBro offering. That is partly because WiBro has taken a backseat at SK Telecom. The operator is currently focusing more on High Speed Packet Access (HSPA) technology.
SK Telecom is unenthusiastic about continuing with its WiBro offering using the currently available technology. The operator has decided not to deploy Wave 1 in any major way. SK Telecom expects the WiBro market in Korea to gain momentum once the products with Wave 2 functionality are deployed, and the company is now focused on Wave 2. It is expected that the real Wave 2 deployments will not happen until Q1 2008 for SK Telecom.
SK Telecom has selected Samsung as its equipment provider for Wave 2 deployments. The two companies are working very closely on all base station deployments. SK Telecom is also working with some of the terminal vendors. These include data card and handset vendors. The investments are considerable. SK Telecom is also making investments in developing a technology that provides a fairly smooth handover between a 3G cellular network and a WiBro network. There is a lot of effort being put into MIH (Media Independent Handover). IEEE 802.21 is referred to as the Multimedia Independent Handover or Media Independent Handover (MIH) standard. That is the kind of model that the company foresees. This will be one of the big differentiators for SK Telecom.
SK Telecom is focusing WiBro towards universities and colleges. The operator expects WiBro deployments to happen more in strategic Hot Zones in Korea and is now working towards increasing the number of Hot Zones. But the competition is already mounting from KT, which has WiBro deployments in the Seoul metropolitan region and 17 universities. Moreover, the operator is expanding beyond Seoul. There are some 80 cities that are expected to be covered by 2008.
These include Ulsan, Busan, Daegu, Incheon, Daeieo, and Gwangju. KT expects to have nationwide deployments by mid-2009. As of Q3 2007, KT had 64,361 WiBro subscribers, whereas SK Telecom had 1,000. As of November 2007, KT had more than 90,000 WiBro subscribers. The operator is targeting to reach 100,000 WiBro subscribers by year-end 2007, 350,000 by year-end 2008, 1.2 million by 2009, and 4 million by 2012. So far, 600 base stations have been deployed by Samsung with KT, which represents a density of 167 subscribers per base station. Half of the subscribers use Samsung devices, while the rest use LG equipment.
KT has an aggressive WiBro marketing campaign in place and has created a Mobile 2.0 cultural space called "W Style Shop," where visitors can experience, share, and recreate various mobile cultures as well as getting a firsthand experience of WiBro. KT is investing to improve network coverage, primarily in-building coverage in Seoul and key metropolitan regions. The operator is also investing to diversify usage of the USB modem, the primary terminal form factor for WiBro service.
The WiBro subscriber base that uses USB modems stands at just over 70,000 for KT. There are also some investments in launching budget laptops and embedded chips in diverse digital devices to make WiBro even more attractive. KT is promoting WiBro phones, which currently have 12,600 subscribers. The operator has introduced a service named “KT WiBro + Nespot POP”. The service enables people to use Nespot POP wireless LAN service as well as WiBro service. The tariff for using Nespot POP service is 15,000 KRW per month. WiBro subscribers can get a 43 percent discount. KT has introduced an improved tariff structure and is also introducing promotional rates for WiBro. The WiBro tariff is far more attractive than the HSDPA tariff. The table below shows the comparison.
Korea Telecom Tariff Comparison: WiBro vs HSDPA
It is expected that Wave 2 technology is going to be the major driver for WiBro in the coming years in Korea. SK Telecom has decided to deploy Wave 2 to lure customers. But the operator still needs to focus more on marketing its service. The operator also needs to make the WiBro tariff attractive as compared to the HSDPA tariff. That could go a long way in increasing its WiBro subscriber base. It is further expected that KT might upgrade its network to Wave 2.
Korea has a fairly established broadcasting network called Digital Multimedia Broadcasting (DMB). The DMB service is available via satellite (S-DMB) or terrestrial (T-DMB) transmission. Multimedia broadcasting is not expected to be deployed over the WiBro network. Services such as VoIP, multi-user gaming, and HIS (High-Speed Internet) are going to be the real drivers for WiBro in Korea. It is further expected that the demand will be more for the consumer applications than the enterprise applications.
For more information you can contact the author. Basharat@maravedis-bwa.com
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