No. 3s’ rebellion
By Cho Mu-hyun
Companies ranked third in sectors of the domestic information technology market are aiming to change the established power structure in their respective industries by concentrating on new trends.
Mobile carrier LG Uplus and handset manufacturer Pantech are showing strong signs of increased success thanks to aggressive investments in marketing and developing their recent products.
LG Uplus, the smallest mobile carrier in the country, is gaining a strong foothold in the rising long-term evolution (LTE) market.
In terms of overall subscription, SK telecom is the leader with 26.6 million and KT second with 16.5 million; LG Uplus trails behind with 9.7 million users.
In the LTE market alone, however, LG has secured 2.4 million subscribers, while SK Telecom maintains the top spot with 3 million. Second-seed KT has a mere million. Experts expect that by the end of the year, the majority of 3G users will all jump ship to LTE. They predict that 15 million users will use LTE smartphones.
Only three years ago, the company, then called LG Telecom, failed to compete on equal terms with its rivals in terms of revenue, number of users or technology. Having failed to invest in the then popular 3G network, LG’s connectivity was visibly inferior to SK Telecom or KT.
However, after 2010, when it changed its name to LG Uplus, it started initializing projects and investment in LTE, the first among Korean firms to do so, foreseeing what would be in demand quicker than competitors. The company became the first in Korea to complete a nationwide LTE network in March this year, while SK Telecom and KT scrambled hard to follow suit.
“Our recent push in LTE, which owes a lot to LG Uplus CEO Lee Sang-cheol’s decisions, has now transformed our image. We are now widely considered a competent company,” said an LG Uplus official. While competitors focused on protecting the market they already had (3G), LG was innovative in creating a brand new market to take a majority share of it before others, the official said.
As Samsung and LG have a variety of businesses globally with varying market shares, Patench is narrowing its target areas and focusing heavily on one area, specifically the smartphone market.
The firm stopped producing other handsets altogether as of 2010. Last year, it further narrowed down its developments to LTE phones.
The domestic smartphone battle is heating up between the three manufacturers, with each firm releasing or taking pre-orders for their new products. Pantech and LG Electronics released the Vega Racer 2 and Optimus LTE 2, respectively, in May, while Samsung’s Galaxy S3’s LTE model is slated for a release this month.
Though experts predict that Samsung will likely lead the domestic market as an extension of their global dominance (5,000 Galaxy S3 3G models available for pre-order by SK Telecom were sold out within 2 hours upon release Tuesday), they are careful in calling LG second and Pantech last.
Before launching the Vega Racer 2, Pantech was bottom in terms of market share at 17 percent, slightly behind LG’s 20 percent, according to a Pantech official. However, as of this month, the company revealed that they are now second with 20.5 percent.
The firm moved 210,000 Vegar Racer 2s, higher than that of the Optimus LTE 2, according to industry sources.
The IT market is known for rapid change, with technology standards constantly upgraded and new products regularly dubbed the next best thing. With a differentiated service and innovations, like those of LG Uplus and Patench, the power structure is subject to change at any moment.