Mergers and Convergence in Korea: KT-KTF, Android, VOIP

The merger of KT with KTF has been approved by the Korea Communications Commission. This merger is considered to be the largest ever in South Korea, outside the financial industry. From a global perspective, it is one of several steps being taken here that will push rapid convergence toward a single, fast digital network for the future. The move has several very interesting implications as follows:

• As noted in a Joongang Daily article, it will mark a shift to packaged services in South Korea's telecommunications industry. After the two firms, which split in 1996, are joined together they will sell landlines, mobile service, high speed internet and internet television as part of a bundled package.


• This merger is expected to encourage other mergers in the sector. Under this scenario, SK Telecom will merge with SK Broadband and LG Telecom will merge with LG Powercom.


• KT is reported to be working with Samsung on a handset that will be capable of operating on both 3G and WiBro networks. This has powerful implications since it means that VOIP services like Skype or the forthcoming Google Voice will be available via this phone.

The last bullet point above is very significant and seems to indicate that the Korea Communications Commission and overall Korean government policy is going to push rapidly and forcefully for full convergence into a single, interconnected digital network that merges voice, data and television, along with fixed and mobile networks.

Ohmynews, in the article cited above, suggested that the merger of KT and KTF might "open up VOIP Heaven." We'll all see about that in the coming months. However, there appears to be one major element lacking in the emerging scenario here in South Korea. It is called Google, and more specifically Android and the Open Handset Alliance. According to reports, Samsung's forthcoming WiBro phone operates on Windows Mobile. This does not bode well for its success in the marketplace, if the example of the Apple iPhone is to be taken seriously. There is a coming battle among mobile platforms and at this point it will probably eliminate Windows mobile in favor of more open platforms ---Apple iPhone, Android and Symbian. So, I suggest we all wait to see whether Samsung and LG take the bold step of introducing Wi-Bro enabled phones for the Android platform.

WiBRO a White Elephant? I Think Not!

I saw a copy of the Korea Times this morning while strolling through our third floor offices and could not avoid noticing the frontpage article with the headline "WiBro Turns into White Elephant."  Although this makes for a good headline, after reading the article I think the analysis is way off the mark.  Most of the argument seems to be based on the fact that projections for WiBro in the local Korean market, including some by the Korea Information Society Development Institute, were overly optimistic.  Furthermore, the reporter notes that in a country with one of the most advanced wireless networks in the world WiBro looks like a "solution without a problem."  I beg to differ.

Consider the following:

• There has been relatively slow and little uptake of the internet services offered by nation's mobile service providers on their 3G phones.  I have Nate and other SK Telecom services on my Motorola Razr phone but I seldom use them because of the inordinate cost.  The cost of surfing the web on current 3G services in Korea is way out of line.  There is your problem and it is a big one.


• The Apple I-phone, Google Android based phones give a glimpse of what is coming.  It is really a hand-held computer that also serves as a phone.  I want my next phone in order to do Google searching, read BBC or the New York Times, check my e-mail, or make a Skype or other VOIP call.  The Korea Communications Commission has recognized that the world is full of consumers like me and so they have opened up the mobile market to the I-phone, Blackberry and other international competition, starting in a few months.  

The Korea Times article also says that "WiBro is designed as a predecessor to mobile WiMax."   This is in error.  WiBro, as it is called here in Korea, IS mobile WiMax in the terminology used by most other nations. Furthermore, the comments in the article about standards are potentially confusing.  WiBro, or mobile WiMax has been accepted as an international standard.  The major competing standard, also accepted internationally, is LTE, but it is further from implementation than WiBro.   Reading this article, one might think that WiBro, rather than LTE is lagging.

At this point, there is very little question that both WiBro and LTE will be successful for the simple reason that they add mobility to our experience of the internet.  I've used WiBro and it works just fine, thank you.  So will LTE, when they get to the same stage of technology rollout.

One final comment.   Of course SK Telecom doesn't like the thought of WiBro handsets, WiBro notebooks and all sorts of WiBro-equipped devices. ``We would need to invest at least two trillion won more to complete a nationwide WiBro network, and the cheap calls on WiBro handsets will erode our profits by initiating fierce competition,'' said an SK Telecom spokesman.  So what else is new?  Of course it will erode SK Telecom's profits and initiate competition.  I would only suggest that SK Telecom cannot forestall the inevitable move to more powerful handsets.  Nor will it thrive in the long run through thinking only about protection of short-term profits.

More WiBro Export Success--an Auspicious Start

With the news that Samsung Electronics has signed deals to export Korea's WiBro technology to Taiwan and Kuwait, it is beginning to appear that this technology will be another big export success story. As reported in the Digital Chosun Ilbo Samsung Electronics is now involved in commercial or pilot projects with 23 firms in 19 countries, including the United States, Japan, Russia, Lithuania, Saudi Arabia, Brazil and Venezuela.>

U.S. technology market researcher ABI Research forecast that the WiBro market will grow from US$3.5 billion in 2008 to $59.6 billion in 2012, with the number of subscribers increasing from 12 million to 280 million.

I had a chance to personally test WiBRO at a recent conference in Seoul dealing with Ultra Broadband issues.  Korea Telecom put all of the conference participants on a bus and we each had a notebook computer equipped with a very compact WiBro modem.  I enjoyed the demonstration and had no trouble viewing video on CNN while the bus was cruising along the Han River at more than 100 kilometers per hour.  The "law of mobility"  or "McGuire's" law states that the value of a product increases with mobility.  A simple measure of mobility is the percent of time the product is available for your use.

I predict great success for WiBRO in Korea and in markets around the world.   The reason is that it draws on the power of the law of mobility by making the internet itself more mobile!

Google's Android Phone: What Will Samsung and LG Do Now?

With the release of the world's first Android phone yesterday by T-Mobile in the United States, following on the success of the iPhone in most of the world, Samsung, LG and other major players in the South Korean market should be prepared to act boldly.  Failure to do so could damage the efforts of these companies and others here to maintain a healthy share of the international market for mobile phones and other portable devices.

The iPhone and the Android make it very clear that convergence has already brought the internet experience to mobile phones, and consumers all over the world will be clamoring for these devices.  There will also be pressure for the leading mobile operators to provide high speed internet access at reasonable rates.  Here in South Korea, we still have the unusual situation that neither the iPhone nor the Google Android are available yet.   Clearly, many consumers would like to purchase one, or both of these phones, given the high levels of internet use here.   As a consolation prize, many are hoping, with me, that LG and Samsung will soon launch their own Android phones here.  Both companies are members of the Open Handset Alliance .