Uplus CEO to shake things up with LTE
Carrier in league with Google, targets Apple partnership
By Kim Yoo-chul
LG Uplus chief executive Lee Sang-chul is recently upbeat and smiling as the company is taking an initial lead in the nation’s burgeoning 4G LTE smartphone market.
Lee, who is also one of the top lieutenants with LG Chairman Koo Bon-moo with LG Display chief executive Kwon Young-soo, as well, is widely seen to continue his top job next year as LG Uplus has grabbed its ``second chance’’ to improve corporate bottom line.
LTE is short for Long Term Evolution. Mobile carriers in Korea that include the market leader SK Telecom and runner-up KT are heavily betting on smartphones supporting LTE technology as strategies to find new earnings drivers amid full saturation in the domestic wireless industry.
The bureaucrat-turned-businessman Lee is also the ``hidden factor’’ for Uplus to win a 2100 megahertz spectrum auction, sending it to offer better 4G offerings and to maximize ARPUs, which are typically falling in South Korea.
The Korea Communications Commission (KCC), Korea’s top regulator, had precluded SK Telecom and KT from bidding for the spectrum in order to create a more level playing-field.
``The nation’s mobile market has so far been effectively a duopoly with SK Telecom holding 50 percent, followed by KT with 30 percent and the remainder 20 percent taken by LG Uplus. But the decades-long continued formula is phasing out in LTEs,’’ the CEO Lee recently told The Korea Times.
``Uplus has been last for over a decade. By starting the 4G LTE service, Uplus is regaining what we’ve previously lost and I can say that is due to a simple word _ confidence. We have confidence to become the top teleco in LTEs,’’ said the chief executive.
The Uplus vice chairman boasted the smallest local carrier serviced some 260,000 customers in LTE-equipped smartphones by last week since its launch and Lee said an increase of its LTE customers represents progress in corporate brand awareness.
The leader SK Telecom secured 350,000 LTE customers, according to unnamed SK officials, however, SK released its LTE smartphones two weeks before LG Uplus.
``Uplus previously suffered from inefficient networks resulting in consumers migrating either to SK Telecom or KT. But in LTEs, Uplus is creating a new value chain with a more robust network and a greater capacity backed by the new spectrum will help Uplus to offer more reliable and more data-intensive services to consumers,’’ he said.
Uplus, which recently competed for the construction of LTE networks on Jeju Island, is planning to start nationwide service from the first quarter of next year.
``Uplus will remain the sole telecom carrier, globally, which allows the whole population to use the LTE service,’’ Lee said, adding the LG Group’s telecom affiliate will commercialize its first voice over LTE (VoLTE) call sometime from next year.
KDDI, NTTDoCoMo from Japan and an American mobile carrier Verizon Wireless have stronger interests to start VoLTE services as early as possible and Lee said Verizon will commercialize its VoLTE service from 2013 at the earliest.
``High-fidelity calls are expected to be part of that experience, so it’ll be harder than ever to hold a call when you’ve got a bad cold,’’ according to the vice chairman with a glimpse of smile.
Uplus has been in talks with U.S. chip giant Qualcomm to use Qualcomm’s patented mobile chip that combines 2G, 3G and LTE wireless technologies into one. Lee said more services will be coming after Uplus smartphones using the chips roll out from the latter half of 2012.
The top company executive is also positive about opening its platform for third-party developers for more content.
Uplus is aiming to increase the number of its LTE service clients to 500,000 by the end of this year and LTE-supported devices will account for 80 percent out of 20 devices that LG has in mind to release next year.
``Uplus already spent 1.2 trillion won to expand our LTE and back-up base stations across the country. For an early start in the nationwide LTE coverage, we spent 400 billion more from our original investment plan,’’ said Lee.
Uplus is going to sell Samsung and LG Electronics’ tablets that include Samsung’s brand-new Galaxy Note from December.
Change and challenge
The rise of American software giants, Apple and Google, are threatening the bottom line for all local carriers and Uplus CEO Lee said it isn’t an exception.
But ironically, mass emergences of such creatures are providing chances to help Uplus transform itself to telecom industry’s new wave.
``Uplus is being urged to change our earnings structures. There is no future with sticking to network business. Even without providing network services, Apple and Google are creating big revenue by selling content to customers,’’ he said.
``How can we live without changes? Uplus is the No. 3 carrier. Running a network business is not everything and that’s why we need converged products that combine LTE, Wi-Fi and high-speed Internet into one to provide personalized and customized value-added services,’’ the chief executive said.
Apple has a solid and profitable eco-system that ranges from hardware to software, while Google is reaping money by selling advertisements via carriers’ networks.
``So far, a telecom company has been charging users for the usage of its telecom networks. That’s the old business model. We will offer distinguished products guaranteeing better speed, along with viewing experiences.’’
Internet portals and phone manufacturers have abundant services and content, however, a carrier is in better position to offer different and customized services to customers because the carrier knows well about the details of a user.
Lee said Uplus has been in detailed phases to run various joint development programs with Google. Uplus is set to introduce a premium service that operates Google’s YouTube services on Uplus’ LTE networks sometime early next year.
``Google Executive Vice Chairman Eric Schmidt was surprised about Uplus’ aggressive LTE-centric business strategies. Joint projects will further be expanded as Google wants,’’ he said.
Lee has opened the possibility of offering Apple’s next iPhone, tentatively ``iPhone 5’’ as the upcoming Apple phone will reportedly support LTE networks, though Apple declined to comment.
``I still don’t know Apple’s business strategies whether the U.S.-based consumer electronics company will allow the coming gadget to support LTE networks, however, yes, we will release iPhones according to the situation,’’ Lee said.
Last year, Uplus had discussed with Apple to offer the CDMA-based iPhone in the domestic market, however, the talks failed.
``Well, we need to change some electronic circuits that Apple wants. It’s not impossible for Apple to start business with Uplus,’’ according to the chief executive.
Uplus doesn’t carry iPhones in the local market.