Can new Galaxy spark muted LTE explosion?

By Cho Mu-hyun

With mobile carriers expecting their worst profits ever in the second quarter, they are hoping the success of the Galaxy S3 LTE from Samsung Electronics will draw users to long-term evolution (LTE) networks.

The LTE version of the smartphone has a price tag of 994,000 won. However, based on a two-year contract with a monthly fee of 52,000 won, telecommunications companies are offering subsidies _ SK sells the handset for 568,000 won, LG Uplus 553,600 won and KT 504,400 won.

KT’s fee is cheaper due to an additional discount. The company started building its LTE network last and is trying to catch up with competitors in terms of subscribers.

SK Telecom is leading in the number of subscribers for LTE with 3.6 million, with LG Uplus and KT chasing aggressively at 2.9 and 1.5 million respectively. Industry analysts and the Korea Communications Commission believe over 15 million users will use LTE networks by the end of the year.

The three mobile carriers have invested billions of won in promoting and developing LTE, which has caused them to see a decline in operating profits. The firms have also been mired in a costly marketing war that forced the KCC to demand them to relent and instead put in funds to provide quality services.

Samsung’s Galaxy S3, which the firm said sold 50,000 on its first day, is the first among a long line-up of handsets available as LTE models expected in the second half of the year. Pantech has launched its Vega S5, and LG Electronics and Apple have as a yet unnamed smartphones to be released in the fall.

Investment bank JP Morgan released a report Friday stating that 6.5 million Galaxy S3s had be sold by June and expects the figure to reach 15 million in the third quarter.