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ANALYSIS - S. KOREA'S WIBRO WIRELESS INTERNET HAS LONG WAY TO GOSEOUL, Jun 26, 2009 (AsiaPulse via COMTEX) -- Three years ago, South Korean telecom giants KT Corp. and SK Telecom Co. (KSE:017670) launched the world's first wireless Internet service with great fanfare, promising users seamless broadband Internet access. WiBro, an acronym for wireless broadband, was touted as a new money-spinner for the local communications sector which was struggling to cope with saturation in both fixed-line and mobile markets. Hyping the homegrown technology as a future growth engine, the government even predicted the local WiBro service market would grow to 8.1 trillion won (US$6.3 billion) by 2010 with its domestic equipment market likely to expand to 5.8 trillion won by the same year. Falling far short of initial expectations, however, WiBro has remained almost in obscurity in South Korea, sending service providers floundering as they struggle to lure customers. The numbers speak volumes about the status of WiBro, which was launched on June 30, 2006. As of the end of May, KT and SK Telecom had only 220,000 registered WiBro customers, with their total revenue barely scraping 30 billion won (US$23.3 million). The companies had invested 730 billion won and 630 billion into the service, respectively, as of the end of 2008. Industry experts point out that WiBro has failed to appeal to customers due mainly to limited coverage. WiBro is currently available only in and around the Seoul metropolitan area and a few countable "hot zones" in other major cities across the country where users can access the Internet. "Speaking of coverage, we are not proud of our service," said a KT official asking not to be named. "But the registration rate for WiBro is steadily growing among those who are in their 20s and 30s." In an effort to attract more customers, KT has released products that bundle a laptop with WiBro technology and plans to develop a handheld device enabling users to log onto the Internet using WiBro, he said. Because of WiBro's limited access, wireless Internet users here have opted to use other wireless Internet connectivity technologies, such as high-speed downlink packet access (HSDPA). HSDPA, which is based on third-generation mobile phone technology, is reported to have been commercially launched in some 70 countries worldwide and covers 91 percent of all the area within South Korea, although its data transfer speed is not as fast as that of WiBro. Despite WiBro's unpopularity, the South Korean government has pledged to prop up the service and hopes to export the technology to other countries. The nation's telecommunications regulator Korea Communications Commission (KCC) decided last December to allow companies to provide mobile phone services using WiBro. WiBro mobile phone service, which is expected to begin around the end of this year, would enable handset users to make calls at cheaper rates, promoting the use of WiBro that will in turn help lay the groundwork for its inroads into overseas markets. Earlier this month, KCC hosted a meeting of communications ministers from 15 countries, including Kazakhstan, Indonesia and Poland, to make a pitch for the wireless Internet technology. The commission has recently beefed up efforts to export equipment and networks for the wireless technology to the Middle East and Africa, particularly targeting countries whose fixed-line communications infrastructure is poor and costly to be established. "Without a proper testing environment, they might remain reluctant to adopt the technology. In this regard, there is no country in the world other than South Korea that provides a better testing environment for WiBro," Lee Seung-hyuk, an analyst at Woori Investment and Securities said, adding that it would take longer for WiBro's overseas operations to take off if the local market remains in a slump. "The only way to help the sluggish WiBro service take off here is to continue to offer continuous investment incentives to the two local operators," he added. (Yonhap) cg |