Can Smart Phones, Netbooks Save WiBro?

The new generation of portable Internet devices such as netbooks, smart phones and car navigation systems seem to be injecting new life into the faltering wireless technology, WiBro. / Korea Times File

By Kim Tong-hyung
Staff Reporter

WiBro, South Korea's own portable Internet standard, has so far been a disappointment. It remains to be seen whether the growing popularity of mobile Internet devices such as ``smart'' phones and ``netbooks'' will be enough to inject new energy into the faltering wireless technology.

WiBro, short for ``wireless broadband,'' is the local variant of mobile WiMAX, which is competing with Long Term Evolution (LTE) in the standard wars for fourth-generation (4G) communications.

In promoting WiBro, Korea intended to drive the standard and enable local companies to benefit from homegrown intellectual property. However, telecommunications giants KT and SK Telecom, the country's two WiBro operators, have managed to gather just 220,000 customers combined since starting services in 2005. This makes a mockery of government predictions that had 1.4 million subscribers and 290 billion won in sales by 2008.

Despite increasing pressure from the Korea Communications Commission (KCC), the country's broadcasting and telecommunications regulator, to boost their WiBro investment, KT and SK Telecom are reluctant to spend too much on faltering technology, especially when they have yet to gain fully on their massive investment in third-generation (3G) WCDMA networks.

KCC's suggestion to provide voice services over WiBro networks, which would allow customers cheaper alternatives to the current mobile telephony services, has been snubbed by the operators until KT reluctantly said it will give it a try.

But just when everyone seemed ready to write off WiBro, the slew of mobile Internet devices, data-enabled phones and minimalist computers that have been flying off the shelves in recent months seem to be throwing a lifeline to the troubled wireless technology.

This new generation of portable devices is not only changing the way consumers choose and use electronics products, but also how they buy them.

Wireless operators like KT and SK Telecom are now involved in the retail of a wider variety of devices than just phones, providing subsidies for netbooks ― the small, low-cost laptop computers that are the latest craze among gadget lovers ― and other mobile Internet devices.

KT, the country's biggest telephone and Internet company and No.2 mobile telephony carrier, is providing subsidies ranging between 100,000 and 200,000 won for consumers buying netbooks from Korean electronics makers such as Samsung Electronics, LG Electronics and Trigem. A two-year contract will allow netbook users to pay around 30,000 won per month for 1-gigabyte of WiBro data usage and around 40,000 won per month for 30-gigabyte usage, KT said.

SK Telecom is providing a wider range of choices, with subsidies for not only Korean laptops but also for products by foreign makers such as Taiwan's MSI and Japan's Sony, charging users between 20,000 and 40,000 won per month for WiBro usage.

SK Telecom's plan to get involved in the retail of Sony's upcoming Vaio W netbooks is certainly generating excitement among gadget lovers and fashionistas.

Netbooks are not the only products the wireless operators are using to expand WiBro demand. In May, KT reached an agreement with Tinkware, the local company that produces the popular I-Nabi car navigation systems, to jointly develop devices that support WiBro connectivity.

According to the deal, KT and Tinkware will jointly develop a WiBro-based service platform called ``TCON,'' designed to provide drivers with real-time traffic information, gas prices, closed-circuit television (CCTV) images of traffic points, Web browsing and a variety of interactive services at the end of their fingertips. As it does with netbooks, KT is providing subsidies for buyers of the I-Nabi TZ car navigation devices.

KT has obviously been investing a lot of efforts to promote WiBro, but its portable gateway, ``Egg,'' which enables WiBro on Wi-Fi devices such as computers, smart phones, multimedia players and handheld game machines, probably generated the most excitement among tech geeks.

Having a high-speed Internet connection like WiBro to use on popular portable products such as iPod Touch and Nintendo DS is certainly an intriguing idea, and SK Telecom plans to introduce a similar portable gateway too.

Apple has sold more than 1 million iPod Touch devices so far through the first-half of this year. Nintendo attracted 2.5 million users for its Nintendo DS, while Sony also sold around 700,000 Sony PSP game consoles. At least from KT's perspective, the buyers of these products are now all potential WiBro customers thanks to Egg. Add the near 5 million users of smart phones, which provide Web browsing and multimedia atop of voice, garnered by the country's three wireless carriers including LG Telecom, and it's clear that Egg and other similar products could become relevant.

``Conventionally, Wi-Fi devices had limited usage, for checking e-mail or browsing the Web, but the portable Internet gateways may enable more sophisticated work,'' said an industry official. ``This could also open new opportunities for WiBro to become relevant.''

Of course, KT and SK Telecom would do anything to take WiBro off life support.

WiBro's disastrous performance as a reference case doesn't bode well for WiMAX, which is already being written off as a threat or competitor by the LTE camp.

This is forcing even the biggest WiBro backers to hedge their bets. KT plans to commercialize LTE after 2011, while SK Telecom targets 2012. LG Telecom, the smallest of the three mobile carriers, also plans to provide LTE services by 2013. Electronics makers like Samsung and LG are also increasingly leaning toward the LTE front.

This had KCC Chairman Choi See-joong admitting to reporters a month earlier that WiBro may never live up to its pre-launch hype as the mainstay of Korea's wireless future, ending up as a niche technology for developing nations that lack strong fixed-line networks.

Policymakers are considering requiring KT and SK Telecom to open their WiBro networks and allow other companies to provide wireless services on them as they scramble to rescue the homegrown mobile Internet technology.

KCC pressing KT and SK Telecom to open their networks was a predictable decision. When the Ministry of Information and Communications, KCC's predecessor, granted the WiBro licenses to the two companies in 2006, it stated that the government could require the companies to open the networks three years after commercial services or after the operators combine to gather more than 5 million WiBro customers.

At their current pace, the two companies may never reach 5 million customers, so policymakers are clearly relieved that somebody had the foresight to put in the three-year clause.

It remains to be seen whether having KT and SK Telecom open their networks, encouraging the emergence of mobile virtual network operators (MVNOs), would be enough for WiBro to take off, especially when the two operators are not too enthusiastic about providing voice services over their networks.

thkim@koreatimes.co.kr

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