By Kim Tong-hyung
Staff Reporter
South Korean telecommunications companies are betting heavily on a new type of Internet telephony service that allows users to switch between fixed-lines and mobile networks using a single handset.
Following moves by bigger rivals KT and SK Telecom, LG Telecom, the smallest of the three mobile-phone carriers, has now also declared its commitment to fixed-mobile convergence (FMC) services.
Fixed-mobile telephony customers could use Wi-Fi-enabled mobile phones to access fixed-line networks when making calls at home or in the office, while accessing wireless networks on the move.
This clearly benefits users, as voice over Internet protocol (VoIP) services charge significantly less for voice minutes than conventional wireless services.
The telecommunication companies are expecting significant demand for fixed-mobile telephony from business users, such as start-ups looking to reduce their telecommunications expenses.
LG Telecom is currently preparing to absorb LG Group's two other telecommunications units - fixed-line telephony operator LG Dacom and broadband provider LG Powercomm. Fixed-mobile telephony will be one of the key services released by the combined company, which will be launched in January next year, LG Telecom officials said.
"The market for mobile groupware, which allows business users to handle e-mail and e-commerce on a single handset, is expanding with significant interest from companies. And there is no doubt that FMC services will be a key element of the mobile groupware package," said an LG Telecom official.
"Corporate FMC services will enable users to access mobile telephony services and Wi-Fi wireless LAN on a single handset. LG Dacom has been excelling in its myLG070 VoIP services, which has more than 1.91 million subscribers, and we are looking to take advantage of the large network of Wi-Fi access points (APs) to fast track our FMC services."
Currently, LG Dacom's VoIP rate is 38 won for three voice minutes, cheaper than LG Telecom's wireless services that charge 11.7 won per 10 seconds.
LG Telecom said it will release FMC-equipped smart phones produced by Samsung Electronics and LG Electronics by the end of the year, and eventually expand the services to a broader range of handsets next year.
KT, the country's biggest telephone company and No. 2 wireless carrier, has been the quickest out of the gate with fixed-mobile telephony, providing FMC services to business users since May.
SK Telecom, the country's leading mobile-phone operator, is also tweaking its network systems to provide fixed-mobile telephony, which it plans to offer to both business and individual customers sometime next year.
Fixed-mobile telephony, along with VoIP and Internet protocol television (IPTV), is one of the emerging next-generation services that are blurring the traditional boundaries between fixed-line, wireless and broadband Internet.
The convergence trend is being accelerated by a slew of mergers sweeping the telecommunications industry, where companies are competing to add size to achieve economies of scale and sophisticate their services.
KT absorbed its wireless unit, KTF, earlier this year, and the bulked-up LG Telecom is expected to debut next year. Industry watchers also expect SK Telecom to eventually swallow its fixed-line telephony and broadband Internet unit, SK Broadband.