By Kim Tong-hyung
Staff Reporter

Although a slew of television commercials make it look as if wireless video calling is the next big thing, discouraged mobile-phone operators know they can't bluff for too much longer.

SK Telecom and KTF have been pushing video as the main feature of their third-generation (3G) services first introduced last year, but video calling has yet to create any excitement either among consumers or business users.

The two companies have gathered a combined 12 million plus subscribers for their 3G services, according to industry figures. However, as the low revenue from video calls and data transfer can attest, consumers, although attracted by the ultra-cool handsets, aren't prepared to spend their money on anything other than voice.

According to SK Telecom, the country's largest wireless carrier, controlling more than 50 percent of the market, video calls accounted for roughly 0.5 percent of call traffic during the month of September. KTF officials aren't giving numbers, but admit that the amount of traffic generated from video calls has been nearly irrelevant.

Industry officials estimate that the number of mobile-phone users trying video calls at least once a month account for approximately 20 percent of all wireless subscribers.

KTF still believes there is a market for video calling, which will grow once consumers become accustomed to the features as they did with text messaging.

To promote video calls, the company is offering its ``show visual letters,'' which allows users to exchange video clips in the form of messages, free to subscribers for the first two months. However, only about 1,000 KTF customers use the multimedia messaging service a day.

The low usage of video calls, despite the increasing penetration of 3G handsets, is a disappointing development for mobile-phone operators who have been searching for ways to increase average revenue per user (ARPU) amid a saturated market.

Despite the efforts by carriers to lower rates, video calls are still perceived as too costly for a service that can't be considered essential, and call quality, including connection speed and resolution, hasn't been up to the standards of high-tech spoiled Korean consumers.

Privacy is also a concern, as most wireless users would rather not be forced to worry about their looks when making a phone call or talk loudly to a speaker in public.

Business users also find video calls inconvenient as it prevents them from doing anything else when making a call and also wonder whether looking at somebody's face adds anything to the conversation.

The slow acceptance of video features epitomizes the struggles of wireless carriers to find a killer application for 3G at a time when a serious market for mobile data transfer has yet to emerge due to expensive rates.

It's hard to say whether the introduction of 3G has brought about significant changes so far in terms of ARPU.

In the second-quarter of this year, the ARPU of SK Telecom, including revenue from interconnection rates, was 43,341 won, down 4 percent year-on-year. KTF's ARPU increased to 40,477 won from 38,732 won a year earlier, while LG Telecom's 35,209 won represented a slight drop.

SK Telecom and KTF officials point out that the ARPU of their 3G customers was notably higher than their second-generation customers. However, this may have more to do with high-end customers switching to new gadgets quicker than others, rather than the added-value services actually having any relevance.

thkim@koreatimes.co.kr