Samsung keeps WiBro services
By Kim Yoo-chul
Despite falling demand Samsung Electronics is planning to maintain its code division multiple access (CDMA) WiBro services, a Korean version of mobile WiMAX.
Samsung’s mobile chief Shin Jong-kyun has denied market speculation that his firm will completely drop its investment for WiBro.
``Samsung will continue in the WiBro business. Our stance is clear ― if there’s demand, then we will provide,’’ said Shin, adding Samsung will continue to release handsets that only support WiBro network services.
Samsung has been selling the WiBro-equipped Evo 4G+1 smartphone produced by Taiwan’s HTC.
This plan has come despite Samsung’s biggest overseas WiBro business partner Sprint Nextel, a U.S.-based mobile operator, has reportedly discontinued its WiBro business to shift to 4G long-term evolution (LTE) network services.
The Samsung-Sprint partnership has so far yielded Nexus S 4G and Epic 4G smartphones, both of which support WiBro but their sales have not been impressive.
``There is no future in WiBro. We have no reason to increase our spending on WiBro-related businesses and I’ve heard that Sprint was preparing to completely unload its WiBro interests,’’ said an unnamed Samsung source requesting anonymity.
As yet, Sprint is the sole WiBro network operator in the United States.
The Samsung official said Samsung is also going to continue its WiBro business in some Middle Eastern countries and Brazil but added trade volumes will remain low.
Samsung started developing WiBro with local telecom carrier KT and the Electronics and Telecommunications Research Institute (ETRI) in 2003 and has invested over 1 trillion won ($860 million).
Now, the WiBro business isn’t as attractive and is rapidly losing momentum.
Samsung saw 600 billion won in revenue in 2009 when WiBro service subscribers peaked but earnings from WiBro have fallen since then.
A Samsung spokesman declined to confirm or disclose further details surrounding the future of the firm’s WiBro business.
Major telecom companies worldwide, including Korea’s KT and SK Telecom, are investing heavily in a global system for mobile communications (GSM) using LTE, referred to as fourth-generation airwaves, amid the drastic rise of data-intensive devices.
Samsung is also losing customers for its WiBro equipment, strengthening speculations that the company will move away from that area.
Its biggest local WiBro partner, KT, has also said it has no intention of investing more in WiBro.
Rather, KT plans to channel $1.1 billion next year in 4G LTE networks after the nation’s telecom regulator has authorized the company to end its outdated 2G services in the 1,800 megahertz band, allowing the company to use the spectrum for 4G.
The government’s rosy expectation that WiBro would generate a 24.7 trillion won production inducement effect, 13 trillion won of value added effect and the equipment industry would grow to 7 trillion won, proved wrong long ago.
The Seoul administration is facing consequences because it thought that once it selected the technology and standard, the market would be created automatically.
``Although Samsung is intent to continue its WiBro business, I doubt Samsung will put WiBro functions on its strategically-important smartphones,’’ said an industry official.