By Kim Tong-hyung
Staff Reporter

After honking the horns of the mobile WiMAX bandwagon for years, South Korea seems ready to hedge its bets on a rival fourth-generation (4G) technology in long-term evolution (LTE). This doubles as a painful confession that WiBro, the country's faltering mobile WiMAX variant, will perhaps never live up to its enormous pre-launch hype as the next big thing in wireless communications.

The Korea Communications Commission (KCC), the country's broadcasting and telecommunications regulator, said Sunday that Ericsson, one of the world's leading suppliers of mobile phones and related network solutions, confirmed its commitment to use Korea as a LTE test bed.

The Swedish tech giant, one of the biggest players in the LTE bunch, will invest 2 trillion won (about $1.56 billion) over the next five years to establish a Korean research and development (R&D) center to test LTE technologies.

``The number of Ericsson employees in Korea will increase from the current 80 to 1,000 during that span, and we are also expecting a variety of Korean electronics makers and wireless operators to participate in Ericsson's efforts,'' said a KCC official.

``We expect Ericsson to announce further details of their investment plan soon. Our companies don't have the fundamental technologies for LTE and jointly investing in 4G technologies with Ericsson will help them win more markets around the world.''

Securing the investment deal from Ericsson is a clear indication that Korea is departing from its ``all-in'' strategy for mobile WiMAX, with WiBro struggling to matter in a country that already has one of the most advanced third-generation (3G) networks in the world.

The move won't have much effect on electronics giants such as Samsung and LG, whose tentacles stretch widely across the LTE front. However, smaller equipment and device makers are already crying foul, as the government had been pushing them to invest in WiBro technologies, despite the lack of a profitable domestic market. Posdata, a wireless equipment firm, announced earlier this month that it is bailing on its WiBro business.

On the other hand, telecommunications operators such as KT and SK Telecom, which have been struggling to stop the bleeding of their WiBro businesses, would obviously prefer to secure a reliable fallback option in LTE.

Opinions also differ within the KCC, with some policymakers expressing worries about sending ``mixed signals'' to the industry after years of stubbornly touting the WiBro horn. With the response by local consumers remaining cool, the KCC had recently been promoting WiBro as an export-specific technology, helping companies like Samsung, KT and SK Telecom to find markets in Uzbekistan, Jordan and explore new possibilities in the United States.

``It's hard to understand why the government has suddenly accepted Ericsson's LTE R&D center for Korea. This really doesn't inspire any confidence for the companies that had been developing WiBro solutions,'' said an official from a mid-sized equipment maker.

The Korean government has been promoting WiBro aggressively in hopes of allowing local companies to drive the standard and capture the benefits of homegrown intellectual property.

However, WiBro is currently irrelevant. KT and SK Telecom combine for just 170,000 WiBro customers, who have so far generated around 25 billion won in revenue combined. This makes a mockery of government predictions that had 1.4 million subscribers and 290 billion won in sales by 2008.

WiBro's struggles in Korea don't bode well for the mobile WiMAX front, which already seems to be losing momentum to the LTE coalition. Both wireless technologies promise fast, ubiquitous broadband, but LTE, which is meant to be an update of today's mobile network technology, seems to have the bigger backing among telecommunications operators around the world.

Industry officials expect that about 70 to 80 percent of the world's 4G networks will be based on LTE, although there is a possibility that the two competing technologies could be harmonized.

KCC officials downplay worries that the government's support for the Ericsson R&D center would curb the industry's investment in WiBro. With LTE looking more and more like the winner of the 4G standard wars, Korean companies can't afford to miss out on the market for related devices and equipment, KCC officials said. The state-run Electronics and Telecommunications Research Institute (ETRI), which owns the most WiMAX patents in the country along with Samsung, had invested 62.5 billion won over the past three years to develop WiBRo technologies, but also 57.2 billion won in LTE technologies, the KCC said.

``It's like the way Korean companies pushed CDMA technologies for local wireless users, but also developed GSM solutions for exports,'' said a KCC official.

thkim@koreatimes.co.kr