KMI may land 4th carrier trophy

By Kim Yoo-chul

Kong Jong-ryeol KMI CEO

The Korean government is expected to pick a Korea Mobile Internet (KMI)-led consortium as the fourth national mobile carrier late this month at the earliest, government officials said Wednesday.

The Ministry of Science, ICT and Future Planning (MSIP) said that it has nearly reached a consensus on the selection, which it believes will lower telecom bills by creating more competition in the market dominated by three mobile carriers ― SK Telecom, KT and LG Uplus.

“We are in the final stage of reviewing the submitted qualification … before giving a license to the KMI-led consortium. Announcements will be made in late February or early March, at the earliest,” a ministry official told The Korea Times by telephone.

The KMI-led consortium is comprised of mobile virtual network operators (MVNOs) that will rent networks from the three existing carriers on a contractual basis.

In September, the consortium and Internet Space Time submitted business plans in hopes of getting a license to become the fourth carrier. In previous biddings, both failed to get a license due to lack of plans to raise capital.

According to the official, the government has concluded that the consortium has no big financial problems that would affect its management of the telecom business, as KMI has raised enough capital to satisfy the MSIP’s requirements.

By next year, the consortium plans to raise its capital to 2.1 trillion won from an initial capital of 853 billion won.

“KMI plans to scrap a membership fee for customers and provide them unlimited mobile data service at a monthly fee of 30,000 won,

which will support the government’s efforts to

lower the burden of telecom bills,” said the official, who declined to be named.

Once selected, the consortium plans to provide MVNOs based on LTE-TDD technology rather than Korea-initiated wireless broadband (WiBro).

At a press conference in Seoul, Wednesday KMI CEO Kong Jong-ryeol said it will begin offering its telecom service based on the Long-Term Evolution Time-Division Duplex (LTE-TDD) technology from April.

“KMI has already agreed with Samsung Electronics, Ericsson-LG, Nokia Solution Network and Alcatel-Lucent for joint development in networks, technologies and maintenance of equipment,” Kong said.

He said the consortium plans to provide smartphones and tablets running on LTE-TDD wireless technology for less than 400,000 won on a two-year contract.

“Still, there are concerns that the LTE-TDD technology is a Chinese technology. But I can cautiously say that the LTE-TDD technology is an international standard,” said another MSIP official.

In a report Wednesday, the Korea Information Society Development Institute (KISDI) said LTE-TDD networks are poised to emerge as a new “game-changers” in the booming race of existing carriers to release devices and solutions that support faster LTE networks.

The government has recently decided to shift the WiBro-only allocated radio frequencies to LTE-TDD due to waning popularity of Wibro technology.

Both the LTE-TDD and LTE-Frequency-Division Duplex (LTE-FDD) standards have been acknowledged by the third Generation Partnership Project (3GPP), an international organization for the standardization of mobile communications technology.

Contrary to popular belief, the first LTE-TDD commercial networks were established in Japan, Europe and the Middle East, not in China, and a large portion of the intellectual property is also owned by the United States and South Korea, according to industry experts.

China, nonetheless, is a strong backer of LTE-TDD as leading Chinese carriers have begun conducting an LTE-TDD service test.

“Since LTE-TDD is a part of the LTE market, it needs to be regarded in a positive light and should not be perceived as a Chinese technology. As LTE-TDD can provide competitive advantages for small and medium-sized companies, a simple misunderstanding may cause unnecessary noise,” said Lee Hyun-woo, chairman of the TTA Telecommunication Standardization Committee and Association.

“Customers willingly pay 2,320 won more per month for an LTE-TDD service from the current LTE carriers. We estimated the total customer savings to be 667.9 billion won based on the current number of LTE subscribers,” said Kim Seong-ryun, an electronics professor at Yonsei University.

“To increase customer savings and secure more technologies, as well as LTE-TDD patents, active adaptation of LTE-TDD in Korea will be needed,” he added.