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Fri, January 27, 2023 | 17:05
Business
KCC Chief Ambivalent About WiBro
Posted : 2009-07-15 19:39
Updated : 2009-07-15 19:39
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Choi Gives Conflicting Signals on Dying Future of Korea's Mobile Internet

By Kim Tong-hyung
Staff Reporter

South Korea's top high-tech policymaker has warned mobile telephony carriers that the government will not tolerate them drifting from their commitment to WiBro, a faltering homegrown wireless technology.

But this was after the government created a fourth-generation (4G) controversy by aggressively courting Ericsson, the Swedish tech giant that is the biggest backer of Long Term Evolution (LTE), which is locked in a standards war with mobile WiMAX over future communications.

"We are taking a close look at WiBro operators KT and SK Telecom on whether they are delivering on their promised level of investment," Choi See-joong, chairman of the Korea Communications Commission (KCC), told reporters in a visit to Kazakhstan.

The KCC will soon announce a report on the WiBro investments of KT and SK Telecom, and plans to penalize the companies should it be revealed they spent less than they promised when they received the licenses.

"We look closely at the plans and anything less than what they (KT and SK Telecom) promised will not be tolerated. The government's support of research and development on LTE does not affect policies on WiBro in any way," said Choi.

WiBro, short for "wireless broadband," is a local variant of mobile WiMAX, and the government has been promoting the technology aggressively to allow local companies to drive the standard and capture the benefits of homegrown intellectual property. As with other 4G candidates, WiBro promises fast, ubiquitous broadband delivered to a wide range of handheld devices, dubbed by some as "Wi-Fi on steroids."

Three years into its existence, however, WiBro is close to irrelevant in one of the world's most wired nations. KT and SK Telecom, the country's two biggest mobile-phone carriers, are reluctant to invest too much in the troubled technology when they have yet to gain fully on their massive investment in third-generation (3G) WCDMA networks.

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.

With WiBro stumbling out of the gate and never recovering, the government is now showing signs of hedging its bets on 4G technologies and looking to lure investments from Ericsson and other major LTE players to set camp here.

The KCC suffered a public relations disaster when it announced Sunday that Ericsson agreed to spend 2 trillion won (about $1.56 billion) over the next five years to establish a Korean research and development (R&D) center for LTE-related technologies, and increase its Korean workforce from 80 to 1,000.

However, as first reported by The Korea Times, Ericsson has no plans to build an R&D center here, when it employs around 3,500 engineers in its R&D centers in China and Japan, and doesn't have a fixed plan for its Korean investment.

This was an embarrassing revelation for KCC, which has been claiming that it would be crucial for Korean device and equipment makers to develop core LTE technologies with Ericsson to gain positions in global wireless markets.

Apparently, Ericsson is not making any promises about its level of commitment to Korea, and any serious investment here will come at a price, as the company could be eyeing a piece of the country's upcoming 4G licenses or other significant opportunities to gain a chunk of the upcoming 4G market.

"Ericsson firmly said that it has intentions to invest in Korea. But due to the uncertainties regarding return on investment, they are currently examining the Korean market and determining their level of investment," Choi said.

"WiBro and LTE are 80 percent similar as technologies, and we can't give up on our homegrown technology. Korean companies have core technologies for WiBro, but not for LTE, and the investment from Ericsson could help in this area.

"The 4G standards will be determined around 2011 and Ericsson investing in Korea would mean a lot."

WiBro's disastrous performance as a reference case doesn't bode well for WiMAX, which is already being written off as threat or competitor from the LTE camp, and the Korean technology polygamy wouldn't be much help either.

Experts believe LTE-based technologies will eventually control 70 to 80 percent of the world's 4G wireless markets, while WiMAX is destined to become a niche technology for building broadband Internet networks in countries with poor fixed-line infrastructure.

KT and SK Telecom, which have their own LTE aspirations, aren't too happy about the government-driven initiatives for WiBro, which could have them spending double on technologies that basically promise the same thing to consumers.

KT plans to commercialize LTE after 2011, while SK Telecom has targeted 2012. LG Telecom, the smallest of the three mobile carriers, also plans to provide LTE services by 2013.

The government has been desperate to drive up the number of WiBro users here, recently deciding to allow voice over Internet protocol (VoIP) calls on WiBro-enabled devices. However, KT and SK Telecom have no intension of cannibalizing its own mobile telephony market.

"Why should we provide voice on WiBro when there will be little differentiation from voice on 3G?" said an executive from one of the carriers.

"We have barely got a return on our several trillion won of investments on 3G networks, and asking us to spend more on WiBro is really pushing it."

WiBro has become so burdensome that KT was recently found discussing with the Ministry of Strategy and Finance to have the government chipping in on investments in WiBro networks, a possibility later shot down by the KCC.

Although having some differences in uplink signaling and channel usage, mobile WiMAX and LTE are basically similar technologies based on orthogonal frequency division multiplex (OFDM) signaling. However, their origins are different. WiMAX, backed by companies such as Intel, is a developed version of Wi-Fi and represents the computer industry's 4G claim. LTE, backed by wireless giants such as Ericsson and major carriers like Verizon and NTT DoCoMo, originated from 3G WCDMA technologies.

Electronics makers such as Samsung and LG are increasingly leaning toward the LTE front. LG had been fully devoted to developing LTE technologies, already developing its own, USB-type LTE module and chipset. Samsung, which holds the most WiMAX-related patents here along with the Electronics and Telecommunications Research Institute (ETRI), is increasing its investments into the alternate technology.

thkim@koreatimes.co.kr
 
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