Journal - Cover Story WCDMA Technology Powerhouse Korea Special Report Outlook for Korean IT Industry in 2008 IT Policy Review Korean-Type IT ODA ...

 
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Journal - Cover Story WCDMA Technology Powerhouse Korea Special Report Outlook for Korean IT Industry in 2008 IT Policy Review Korean-Type IT ODA ...
Winter 2007
                                                                                                              Vol. 26

                                                                                Journal

         IT KOREA
ISSN 1976-2704
                 Cover Story WCDMA Technology Powerhouse Korea
                 Special Report Outlook for Korean IT Industry in 2008
                 IT Policy Review Korean-Type IT ODA - Effort to Relieve International Digital Divides
Journal - Cover Story WCDMA Technology Powerhouse Korea Special Report Outlook for Korean IT Industry in 2008 IT Policy Review Korean-Type IT ODA ...
Publisher’s Column

Commentary by the Winter
Edition Publisher

O      ver the past 10 years, it was CDMA that played the leading role in nurturing,
       growing and consolidating the Korean telecommunications industry. Now the
baton has been handed over to WCDMA. The conversion from CDMA to WCDMA
means more than a simple shift of technology from synchronous to asynchronous. Many
other sectors including communication equipment, wireless Internet, terminals, wireless
devices and content as well as telecommunications operators also need to change with the
advent of the new service. To put it another way, a domino effect is taking place whereby
changes in one field influence other areas as well.

The Ministry of Information and Communication reckons that nationwide rollout of
WCDMA/HSDPA will create a new ripple effect worth around 8 trillion won. It must
sound really tempting to the industry, which has suffered from market stagnation. For
example, telecommunications service providers may be able to increase revenue per
subscriber by delivering new add-on services, although it would be difficult actually to
secure more subscribers, since current numbers stand at 40 million. Indeed, this market
would never have been created if they had stuck to the existing CDMA service. Also, a
change is looming in the three-way competition between SKT, KTF and LGT, not least
because KTF has recently become a leader in the changes by taking the offensive, which
has never been witnessed in the past. During the process of change, some positives will
also result, such as increased competition and reduced prices.

A new opportunity has also opened up to the equipment and terminal markets, which have
had no new pull factors since the release of camera phones. The same is true for the
content industry. For their part, CPs (content providers), so far dependent on the 3 mobile
operators, have also been handed a new business opportunity of their own, with the advent
of full browsing. Above all, the greatest significance of WCDMA is that real market
competition has been triggered. Leaping the barrier of CDMA and arriving in the global
market, the mobile operators are about to contend for victory, for which they need to be
aware that WCDMA is going to stimulate further future culture shifts.

It is still not certain that video calling is going to be 3G’s killer application. Nevertheless, the
remarkable increase in the volume of data able to be transmitted at any one time takes on
huge importance. Through this technological advance, the telecommunication industry will
more actively be able to reflect the trend of personalization - for example UCC (User Created
Content) - and how to respond to this trend will be key to future competition. Next-generation
services befitting 3G will have to be developed in line with cultural changes initiated by
a combination of end users, mobile communication operators and new technology.                         Sunbae Kim KIICA President

                                                                                                                  www.kiica.or.kr 03
Journal - Cover Story WCDMA Technology Powerhouse Korea Special Report Outlook for Korean IT Industry in 2008 IT Policy Review Korean-Type IT ODA ...
www.kiica.or.kr                                    Contents

                  13                                    15                        28   42                                                                          66                                    73

                                                                                                                        03   Publisher’s Column

                                                                                                        Cover Story     06   WCDMA Technology Powerhouse Korea
                                                                                                                        10   SKT : Commencement of HSDPA Commercial Service, the First of Its Kind in the World
                                                                                                                        15   WCDMA Marketing

                                                                                                     Special Report     18   The Significance of the Adoption of WiBro/Mobile WiMAX as a 3G International Standard,
                                                                                                                             and Its Future Direction
                                                                                                                        22   Outlook for Korean IT Industry in 2008
                                                                                                                        25   User-Centric Intelligent u-Home Services

                                                                                                      Trend & Issue     28   Computer Technology on Screen: Korea’s Computer Graphic Market
                                                                                                                        30   Telecommunications Market Blossoming - Convergence

                                                                                            Focus on ICT Companies      34   NVLsoft Corp., A Venture Specializing in Virtual Reality
                                                                                                                        36   Honest Technology, Specializing in the Digital Video Software
                                                                                                                        38   Somansa, A Promising CMF-Specialized Company
Publisher Sunbae Kim
                                                                                                                        40   Mobilians, Market Leader in Mobile Payment Service
Senior Advisor Yunsoo Lee

                                                             IT Korea
Consultant Duke Choi / Youngsoon Park
                                                                                                    IT Policy Review    42   Korean-Type IT ODA - Effort to Relieve International Digital Divides
Editor Sangoh Lee (Chief) / Andy Doe
Design ace design                                                                                  ICT Industry Brief   47   ICT Industry Brief
Translation E4NET

                                                             Journal
                                                                                            New Services & Products     54   New Services & Products
Published by
                                                                                                      Heritage on IT    62   Scientific Technological Revolutions in the Past- Jikjisimgyeong
KIICA (Korea IT International Cooperation Agency) 2F,
Sejongno Daewoo Building, Naesudong, Jongnogu, Seoul,

                                                             Winter 2007
                                                                                                IT Korea Experience     64   Korean Online Contents Export
Korea
www.kiica.or.kr / e-mail _ itjournal@kiica.or.kr                                                           ICT Event    66   ICT Cooperation Luncheon
Tel _ 82-2-2022-1511 / Fax _ 82-2-2022-1499                                                                             68   Introduce Domestic Technology and Services such as WiBro∙DMB∙IPTV

Editorial Design & Printed by
Strabase / www.strabase.com                                  Vol. 26                                   ICT Database

                                                                                                           Appendix
                                                                                                                        70

                                                                                                                        73
                                                                                                                             A Report on the Fixed-Line and Wireless Telecom Service Subscribers

                                                                                                                             Nuritkum Square: Where Business and Technology Meet
Journal - Cover Story WCDMA Technology Powerhouse Korea Special Report Outlook for Korean IT Industry in 2008 IT Policy Review Korean-Type IT ODA ...
Cover Story WCDMA Technology Powerhouse Korea

                                                                                                     Six Mil. Subscribers until Yearend
                                                                                                     At the end of October 2007, Korea’s WCDMA service
                                                                                                     subscribers have exceeded 4 million, solidifying the claim
                                                                                                     that 3G has been the de facto dominant standard. LG
                                                                                                     Telecom caught up with KTF in the fourth quarter, with the
                         LIVE                                                                        second highest number of new subscribers. SK Telecom,
                                                                                                     meanwhile, achieved its market share goal of 50.5 percent in     service. The single USIM can allow you to do everything
                                                                                                     the month, giving it a plenty of room to breathe until           including mobile banking, stock trading, bus/subway fare
                                                                                                     yearend. In November, all the three mobile phone service         payment, and bill payment. Recently, SK Telecom launched

                        WCDMA                                                                        providers have launched new pricing plans offering discounts
                                                                                                     for calls within the network, signifying a change in the
                                                                                                     competition landscape anytime soon.

                                                                                                     According to October subscriber numbers revealed by the
                                                                                                                                                                      a new service that recharges the user’s credit money
                                                                                                                                                                      wirelessly through the USIM. KTF is also in the works to
                                                                                                                                                                      offer a ‘convergence’ service for mobile banking, credit card,
                                                                                                                                                                      and stock trading.

                        Technology                                                                   three telecom companies, the total WCDMA subscribers
                                                                                                     have been 4.05 million, almost 10 percent of all mobile
                                                                                                     phone service subscribers. KTF has 2.41 million subscribers,
                                                                                                                                                                      Although these services were available on 2G mobile
                                                                                                                                                                      phones, they needed each bank issuing individual chips,
                                                                                                                                                                      which rendered it impractical to mass-use. As the capacity of
                                                                                                     followed by SK Telecom’s 1.63 million, whose gap has             the USIM increases and many businesses offer convenient

                        Powerhouse                                                                   narrowed quite significantly. In the case of SK Telecom, it
                                                                                                     has reached the 1.5 million target for WCDMA subscribers
                                                                                                     two month earlier than scheduled. It also exceeded the 2
                                                                                                                                                                      services, anyone not adopting the USIM should expect
                                                                                                                                                                      falling behind. The reason that KTF and SK Telecom stated
                                                                                                                                                                      that they would launch M-commerce services starting this

                        Korea
                                                                                                     million market at the end of November. At this rate, the total   year also has to do with the fact that they believe M-
                                                                                                     WCDMA subscribers will be 5.5 to 6.0 million at the end of       commerce would grow phenomenally.
                                                                                                     the year, strengthening the claim that WCDMA is more and
                                                                                                     more becoming the standard.                                      Since the introduction of WCDMA/HSDPA, the
                                                                                                                                                                      asynchronous 3G mobile telecommunications service, the
                                                                                                                                                                      biggest winner is the consumer. The erstwhile-restrained
                                                                                                     WCDMA’s Spillovers                                               competition in the saturated 2G market was getting fiercer as
                         WCDMA has changed the way people communicate. If it was voice before,       WCDMA is expected to create positive impact on other             new 3G operators offered competitive pricing. Wider choice
                         it is now video that has become the dominant mode of communication. In      industrial sectors, as well as communications itself. With the   of mobile terminal models and lower prices are also a plus
                         addition, mobile phone you are using in Korea can be used anywhere in the   3G mobile terminal on hand, every bit of information on          for the consumer. As the majority of service providers are
                         world since it is the global standard. SHOW, the WCDMA-based service        financial market, TV programming, and traffic is available       transitioning to the asynchronous technology, the room for
                                                                                                     on the go. All this is made possible by the 1.5-square-          foreign brands to come in has also gotten bigger. Since next
                         marketed by KTF, has put out a series of commercials emphasizing the
                                                                                                     centimeter USIM.                                                 year, HSDPA (High-Speed Download Packet Access) phone
                         aspect of fun and amazement.
                                                                                                     The USIM is the authentication module, which stores user         prices are also expected to fall. All this is good news for the
                                                                                                     subscriber information, the centerpiece of the WCDMA             consumer exasperated by slowly increasing phone bills.

06 IT Korea Journal Winter 2007                                                                                                                                                                                     www.kiica.or.kr 07
Journal - Cover Story WCDMA Technology Powerhouse Korea Special Report Outlook for Korean IT Industry in 2008 IT Policy Review Korean-Type IT ODA ...
Cover Story WCDMA Technology Powerhouse Korea

WCDMA Video Calling Rate Lowered                                                                                                  From WCDMA to HSDPA
The rate for video calls made from the WCDMA phones has            With the 3G mobile                                             HSDPA is the Release 5 standard made available by 3GPP,
been lowered to 30 won per 10 seconds, from 120 won. In the                                                                       the first-stage technology in the host of evolutionary-type
first place, it was KTF that started the price competition when    terminal on hand,                                              services of WCDMA. Its download speed is 14.4 Mbps,
it cut in March of this year the 10-second calling rate to 36                                                                     seven times faster than regular WCDMA. That means
won from 100 won. To this, SK Telecom responded by                 every bit of informationon                                     HSDPA is opening up truly the era of mobile broadband.
reducing it to 30 won, to which KTF matched immediately.
This is one case where competitive pressures triggered rate cut.
                                                                   financial market, TV                                           In Korea, KTF has started the nationwide WCDMA service
                                                                                                                                  since March 2007, followed by SK Telecom in March 29.
As for the rate for multimedia messaging service-or MMS                                                                           According to IDC Korea, telecom consultancy, in its July
for short, the same has happened. Since April, SK Telecom
                                                                   programming, and traffic                                       2007 report titled ‘HSDPA and WiBro Service Market
has offered a reduced rate for its MMS messages, from 50                                                                          Forecast’, HSDPA would account for 7.4 percent of all
won to 30 per message up to 1,000 characters. The rate for         is available on the go.                                        mobile phone subscribers, rising to 14 percent in 2008 and
picture and moving image attachment was also changed to                                                                           20.5 percent in 2009. By the year 2011, the estimated
100 won from 100~400 won, as much as a 75 percent cut.                                                                            number of HSDPA subscribers would be 14.9 million, a 32.6                                Faster Handset Distribution Good for 3G Diffusion
KTF and LG Telecom will shortly match the MMS price.                                                                              percent share in the total. In terms of sales share, it will grow                        Competing technology standards such as HSDPA and
                                                                                                                                  to 38.8 percent in 2011, from only 0.2 percent in 2006.                                  WiBro, coupled with KTF and SK Telecom-supported
That applies also to wireless Internet rates. This year, SK                                                                                                                                                                HSDPA, are grabbing subscribers at accelerating pace,
Telecom and KTF lowered its per-packet rate by 30 percent          Mobile Handset Prices Expected to Fall                                                                                                                  helped by faster introduction of cost-competitive and
and LG Telecom by 20 percent. KTF offered an additional            Many markets in Europe and Asia have already adopted                                                                                                    attractive mobile handset models.
                                                                                                                                  ■    Figure 1. Korea’s Mobile Service Subscribers, 2006~2011
50 percent discount (0.45 won per packet) in case its 3G           WCDMA technology for their 3G transition. Industry
subscribers send moving images, with a 50 percent further          analysts predict that up to 90 percent of worldwide mobile     50
                                                                                                                                                                                                  (unit: million people)
                                                                                                                                                                                                                           Major handset manufacturers such as Samsung, LG, and
discount at commute times.                                         phone users would opt for WCDMA. If that happens, the                                                                                                   Pantech are pitching hard their spanking-new models.
                                                                                                                                  45
                                                                   users will be able to enjoy many benefits that they did not                                                                                             Samsung Electronics, for example, announced recently that it
                                                                                                                                  40
Meanwhile, GS HomeShopping launched a brand-new 3-D                expect from CDMA, from scale economies. One easy-to-                                                                                                    would begin a huge campaign to raise awareness on 3G, an
                                                                                                                                  35
broadcasting service based on HSDPA technology. The                foresee consequence would be lower phone device prices.                                                                                                 unusual move for a company maintaining a comfortable lead.
company showcased its new-fangled technology in a                  Overseas phone brands, until now unsuccessful in breaking      30
                                                                                                                                                                                                                           Already, LG Electronics has introduced the world’s fastest
promotional message where the show hosts in the studio and         into the Korean market, will flood in, offering wider choice   25                                                                                       (7.2 Mbps) HSDPA phones. There are ten or so 3G models
a suburban mountain connected through the HSDPA call,              to domestic consumers.                                         20                                                                                       on the market. The flashier, lower-cost new models will
relaying moving images in real time. It was the first instance                                                                    15                                                                                       further increase the size of HSDPA market.
of an HSDPA service implemented in TV broadcasting.                The USIM authentication module that will come equipped in      10
                                                                   the WCDMA phone will be another benefit. The user, for          5
A company official said, “Our introduction of the latest           example, can plug the USIM card into her friend’s phone and
                                                                                                                                   0
technology means we can do real-time broadcasting without          make international phone calls without feeling guilty. Once             2006        2007        2008       2009        2010            2011
                                                                                                                                                                          ■ Subs HSDPA/HSUPA      ■ Subs CDMA
taking the expensive transponder car out. It is one example of     the USIM is in wide use, consumers can purchase handsets
a technology making difference in real life.”                      anywhere in places like outlet stores and supermarkets.                                                                     ( Source: IDC2007 )

08 IT Korea Journal Winter 2007                                                                                                                                                                                                                                        www.kiica.or.kr 09
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Cover Story SKT : Commencement of HSDPA Commercial Service, the First of Its Kind in the World

SKT : Commencement of HSDPA
Commercial Service,
the First of Its Kind in the World                                                                                                                          accommodate changes in the market environment regarding                    WCDMA from its frontal defense in product power, quality
                                                                                                                                                            the prices of terminals, customer satisfaction with the                    and technology, customer service, marketing, etc. We will
                                                                                                                                                            promoted services, the sizes of local and overseas markets, etc.           continually launch multimedia-centered promoted services
                                                                                                                                                                                                                                       into the market, providing linking services with games,
                                                                                                                                                            We cannot become a ‘killer app’ with image communication                   music, LBS, etc. Moreover, to facilitate the smooth supply of
                                                                                                                                                            services alone. We have a service-differentiation strategy by              combination USIM (Universal Subscriber Identity Module)
                                                                                                                                                            providing a variety of web-like and multimedia-centered                    cards, we will do our best to make transportation-related
                                                                                                                                                            promoted services, automatic roaming and USIM-based                        financial services available to more customers in 2008.
                                                                                                                                                            services, which we offer ahead of our competitors.
                                                                                                                                                            Additionally, we will strengthen our competitiveness through               Marketing Manager Jun-dong Bae of SK Telecom said,
                                                                                                                                                            the extension of various wire and wireless convergence                     “We will intensify our WCDMA marketing in 2008 in
                                                                                                                                                            services such as games, music, and LBS services.                           consideration of customer satisfaction and the potential for
                                                                                                                                                                                                                                       market extension.”
                                                                                                                                                            We are making terminal sourcing and promotions in alliance
                                                                                                                                                            with Samsung Electronics in order to provide the best
                                                                                                                                                            services to customers with the best brands. Moreover, this is              Introduction of Major Services
                                                                                                                                                            the time to produce more competitive terminals, since the
                                                                                                                                                            WCDMA market has expanded to 3 million subscribers.                        1) T Live Image Communication
                                                                                                                                          Choong Lai Cho
                                                                                                                                                                                                                                       This is SK Telecom’s image-communication service, with
                                                                                                 Vice President / Director of SK Telecom Public Relations
                                                                                                                Tel: 82-2-6100-3800, sktpr@hanmail.net      Time will be needed in order to reach the level of CDMA                    which people can communicate while looking at the other party
                                                                                                                                                            quality, which has been upgraded over the past 10 years, but               on the screen of the device. This service targets the holders of
                                                                                                                                                            we will do our utmost to catch up with the level of CDMA                   the cellular phone devices with which image communication is
                                                                                                                                                            communication quality as soon as possible.                                 possible. This service can be made available in foreign
                                                                                                                                                                                                                                       countries where WCDMA service is available (except for
Status of SK Telecom WCDMA Subscribers                                  uncertain what the competition will be like in the market                                                                                                      countries that don’t provide image-communication services).
The total number of SK Telecom WCDMA subscribers is                     after October. However, it’s expected that the market will                          Strategy for 2008                                                          Image-communication services are evolving mobile
2,029,023 as of November 30, 2007, or approximately 10%                 stabilize due to the effect of education regarding market                           SK Telecom’s goal for WCDMA in 2007 was to secure 1.5                      communications services from ‘audio phone services’ to
of the total of all SK Telecom subscribers, that figure being           operation this year, and therefore we’re pursuing stable                            million subscribers, but already we have exceeded 2 million                ‘video and audio services.’ Getting out of the conventional
21,816,140. Concerning the WCDMA terminals, SK has                      market competition through medium- and long-term goals.                             as of November.                                                            mode, which was mainly based on voice communication, we
launched 14 types of cellular phone terminals and four types                                                                                                SK Telecom will focus on shifting its competing power to                   are providing a variety of added services, including image
of T log-in modems, and will launch 20 types of phones by               It is SK Telecom’s WCDMA marketing strategy to shift SK                                                                                                        coloring, providing image information, image letter, image
the end of the year.                                                    Telecom’s competing power to WCDMA from its frontal                                                                                                            monitoring and image traffic information services in addition
                                                                        defense in product power, quality and technology, customer                          ■   Table 1. WCDMA Investment                                              to image communications.
                                                                                                                                                                                                              (Unit: 100million won)
                                                                        service, marketing, etc. This strategy includes providing the                                                                                                  Additionally, our image-communication service targets
Summary of Quarterly Marketing Results                                  best services to customers regardless of CDMA and WCDMA                                  2003          2004         2005      2006           2007              extended from the phone-to-phone to web-to-phone services
The market has shown a little stability recently, but it remains        networks. We are pursuing a cost-effective policy that will                              2,100         2,200        5,800     7,800     6,100(prospects)       and the Internet phone-linking service.

10 IT Korea Journal Winter 2007                                                                                                                                                                                                                                                       www.kiica.or.kr 11
Journal - Cover Story WCDMA Technology Powerhouse Korea Special Report Outlook for Korean IT Industry in 2008 IT Policy Review Korean-Type IT ODA ...
Cover Story SKT : Commencement of HSDPA Commercial Service, the First of Its Kind in the World

■   Table 2. T Live Added Content

         Added functions                                                                     Contents of the services
                                                                                                                                                                                                                                                                   countries so that they can use roaming services around the
                                    - Transmitting images and mobile images are stored during image communication.                                                                                                                                                 world.
    Image coloring                  - It’s possible to use this function for private life via replacements of images.
                                    - When receiving a call via an image-communication phone, the receiver can display various contents of the services.
                                                                                                                                                                                                                                                                   Because WCDMA, which is known as the third-generation
    Image PO Box                    - Even if image communication fails, it’s possible to store and transmit image messages to the other party.                                                                                                                    mobile technology, began in 2007 and has a growing
                                    - It is possible to record image messages in the image message call server and transmit the messages in the form of image                                                                                                      domestic market, we took a quick response to make contracts
    T Live Image Letter
                                     communication to the other party.                                                                                                                                                                                             with communication carriers of European countries where
                                    - This service lets the user freely edit photos and moving pictures stored in his PC and images taken by his web camcorder, and                                                                                                our automatic roaming wasn’t compatible due to different
                                     display them on the other party’s phone in an image calling mode.                                                                                                                                                             communication infrastructures from ours. Up till October 11,
    T Live Web Image Letter
                                    - It is also possible to use these services with a PC connected to the Internet overseas, but it isn’t possible to transmit them to another                                                                                    2007, SK Telecom is providing roaming services in a total of
                                     maker’s image communication cellular (KTF image communication).                                                                                                                                                               142 countries, such as 19 CDMA, 140 GSM and 46
    T Live Web Phone                - This service enables a PC with a web camcorder to display the caller’s face on the other party during communication.                                                                                                         WCDMA countries (except for the countries in which
                                    - This service real-time retrieves and provides image information in connection with 62 CCTV terminals of four major expressways
                                                                                                                                                                                  July 1996, opening the door to local roaming service, and                        communications services overlap).
    T Live Traffic Information       across the nation (Seoul-Busan, Jungbu, West Coast and Yeongdong). This service is provided on demand by the user.                           provided another roaming service in Hong Kong in 1999,
                                     It provides a wider range of traffic services than **1333 and Nate.                                                                          starting the age of full-scale roaming service.
    T Live Monitoring               - This lets the user monitor images of a remote location he/she has set in advance through means of a special code.                                                                                                            4) Life-based Service
                                                                                                                                                                                  SK Telecom has continually extended not only the CDMA-                           The WCDMA of SK Telecom, is loading transportation,
                                    - This service enables a WCDMA terminal's image communication function to real-time transmit images to news media
    T Live Image Information                                                                                                                                                      based automatic roaming service, which most local subscribers                    membership, coupon, life infrastructure service functions in
                                     companies. It is possible for users to record images for up to 10 minutes via their devices.
                                                                                                                                                                                  are using, but also automatic roaming services based on GSM                      connection with communications and broadcast and life
                                    - When a hearing-impaired caller accessed to the live center, operators respond to the call by means of chatting and sign language
    T Live Customer Center                                                                                                                                                        and WCDMA to other countries such as the U.S., China and                         infrastructures, and loading SK Telecom credit card/
                                     (available to phones for the hearing-impaired).
                                                                                                                                                                                  countries of Southeast Asia. Additionally, SK Telecom is                         MSTOCK onto USIM cards in order to pursue various
    T Live Image Conference         - This service achieves video calling among multiple parties.                                                                                 providing lease roaming services for users who visit countries                   convergence services, also providing financial infrastructure
    Image English                   - This is a ubiquitous English-language service based on multimedia services: image and voice through a cellular phone and a PC on            that have different communication infrastructures from those                     services.
    (Live on English)                the basis of fixed monthly charges.                                                                                                          of SK Telecom. For Koreans who visit countries where our
                                                                                                                                                                                  lease roaming services aren’t available, we lease phones that                    What is USIM?
                                                                                                                                                                                  are compatible with the communication systems of the                             USIM stands for Universal Subscriber Identify Module, which
2) High-Speed Data Transmission Service                                                      do web surfing through the wire Internet and users to                                                                                                                 is loaded onto WCDMA mobile terminals. It is a chip that can
Over 3 times better quality image contents than JUNE,                                        download data through a cellular phone, which is the same                            ■   Table 3. SK Telecom Roaming Service per Terminal (As of Oct. 11 2007)        be utilized in a variety of areas such in financing and living
QVGA (320×240 fixels) contents began to be applied to                                        method of surfing as through the wired Internet, making                                                                                                               activities with its enlargement of storing capacity and in its
movies, education, etc., and are now applied to all multimedia                               possible web surfing with a cellular phone.                                           Types of Terminal
                                                                                                                                                                                                           Number of
                                                                                                                                                                                                                                   Description                     combination with convergence technologies as well as be used
                                                                                                                                                                                                            Country
contents of WCDMA. Furthermore, it’s possible to                                                                                                                                                                                                                   in the management and authorization of mobile subscribers.
                                                                                                                                                                                   CDMA                        19       All types of CDMA terminals
implement various kinds of user-created content by utilizing
                                                                                                                                                                                   World Roaming Phone         137      Samsung SCH-V920
the improved uploading speed, so it’s expected to line up                                    3) Convenient Global Roaming                                                                                                                                          Strengths of USIM-based Service
                                                                                                                                                                                   WCDMA (GSM)                 140      Samsung SCH- W270, W240, W300,
various kinds of content by taking advantage of its mobility.                                The history of roaming service in Korea goes hand in hand                                                                                                             First, it’s very convenient because it can replace a variety of
                                                                                                                                                                                                                        W330, M620
With mobile web service it’s possible to search the wired                                    with SK Telecom. SK Telecom started a semi-automatic                                                                                                                  cards and cash that we need to carry in a wallet or purse. You
                                                                                                                                                                                   WCDMA (non-GSM)             46       Samsung SCH-W290, LG SH130
Internet from a cellular phone. This program enables users to                                roaming service for the Atlanta Olympiad held in the U.S. in                                                                                                          can download the information of your credit, transportation,
                                                                                                                                                                                                                                                 ( Source: SKT )

12 IT Korea Journal Winter 2007                                                                                                                                                                                                                                                                                  www.kiica.or.kr 13
Journal - Cover Story WCDMA Technology Powerhouse Korea Special Report Outlook for Korean IT Industry in 2008 IT Policy Review Korean-Type IT ODA ...
Cover Story SKT : Commencement of HSDPA Commercial Service, the First of Its Kind in the World                                                                                                                                Cover Story WCDMA Marketing

                                                                                                                                           WCDMA Marketing
                                                                                                                                           SHOW Sweeps Korea in 2007.
                                                                                                                                           Enjoy Unprecedented Pleasure. Do SHOW
and membership cards onto a USIM chip so that you can use
such services with one USIM chip. Second, it’s very
economical because it can bring various benefits such as
communication charge discounts, saving of various points,
etc. Third, it’s safe because it’s impossible to fake or
duplicate a USIM-based credit card though plastic cards can
be easily faked or duplicated. Finally, it’s convergent because
various functions can be loaded onto one chip and it’s
possible to store and delete data in the chip.

Current USIM Services
A. Mobile T-money Service
This mobile transportation-money service enables users to pay           M-CMA function loaded onto the USIM chip of a WCDMA
transportation fees with their cellular phone that has T-money          cellular phone in alliance with SK Securities and Dongyang
in their USIM chip of 3G in the metropolitan city of Seoul.             General Financial Securities. M-Stock and M-CMA services
                                                                        launched recently enable users to check stock prices, order
B. USIM Credit Card Service                                             stocks, analyze charts, obtain investment information, and
The USIM Credit Card to be issued will be LG Style T-                   transfer money from bank accounts. Additionally, the
money card, the users of which can get 3,000 to 15,000 won              functions of managing M-stocks and CMA accounts,
off their communication fees depending on amounts of their              transferring money from bank accounts, checking bank
transaction on the card. The terminals compatible with the              account balances, and obtaining other financial product
chip are LG SH-110, LG SH-130, SCH-W240, and SCH-                       information (M-CMA) can be downloaded onto a USIM
W290. It is expected that more compatible terminals will                chip to use.
come out.

C. Membership Card Service                                              5) T Log-in                                                        It was as recently as 10 months ago that SHOW, KTF’s 3G mobile service, made its debut, wowing everyone
You can use the membership services of SK Telecom such                  This Broadband Wireless Access (BWA) enables digital               with an unprecedented wireless video calling feature. Now the service has become such an integral part of
as Leaders Club, TTL, Ting, etc. with your cellular phone.              devices, not cellular phones, to access the HSDPA network.
                                                                                                                                           people’s daily lives that it’s common to find people making a video call.
You don’t need to carry cards, but only need to download                A USB modem installed in various digital devices such as
your information into USIM so that you can use it. You can              laptop/desk-top computers, mobile multimedia terminals
                                                                                                                                           In particular, the fact that the accumulated number of SHOW subscribers exceeded 2.4 million at the end of
just press ‘M’ button and access ‘Membership & Life’ icon               (PMP, digital camera, etc.) can log-in to the mobile phone         October, 2007, or eight months after its release, clearly shows how much consumers expect and demand
on the WCMDA terminal to download your membership                       network anyplace where HSDPA/EVDO/WiBro network is                 from the paradigm shift in the telecommunications market, and from next-generation wireless telecom
information.                                                            available for the wireless Internet services. It is a ubiquitous   services such as video calling and high-speed data transmission.
                                                                        service provided through the wireless Internet, which has          Since its launch, SHOW has reshaped the mobile landscape with a powerful brand launch, and generated
D. USIM Stock Service and M-CMA Service                                 about 80,000 subscribers nationwide.
                                                                                                                                           buzz with its unique and witty ads. Now let’s take a look at its advanced service, which enables high-speed
SK Telecom is providing financial services via M-Stock and
                                                                                                                                           downloads of large-volume data, and how it was created.

14 IT Korea Journal Winter 2007                                                                                                                                                                                                           www.kiica.or.kr 15
Journal - Cover Story WCDMA Technology Powerhouse Korea Special Report Outlook for Korean IT Industry in 2008 IT Policy Review Korean-Type IT ODA ...
Cover Story WCDMA Marketing

Birth of SHOW                                                    increasing investment in next-generation services, offering                                                                      could represent a novel, differentiated service, and a fashion
SHOW is the brand name of a state-of-the-art WCDMA-              convergence services and enhancing service competitiveness                                                                       style suited to the young generation, which will be a major
standard mobile service that allows high-speed data              through cross-border partnerships.                                                                                               consuming force in the WCDMA market. In this respect, the
transmission, video calling, and international video call                                                                                                                                         name SHOW perfectly serves the purpose. In its basic
roaming. As a dominant player in the WCDMA market,               CEO Youngjoo Cho is leading these efforts. Identifying                                                                           meaning, the name suggests the video and entertainment
which is fast expanding globally, KTF declared the ‘Grand        himself as an ardent fan and salesman of SHOW, he is                                                                             features of WCDMA and carries familiar associations of
Launching’ of SHOW by becoming Korea’s first mobile              promoting the service in his daily life. He once sent a                                                                          variety, pleasure and expectation.
carrier to provide the WCDMA service nationwide.                 surprise video message to all his employees via the service,
                                                                 and making video calls to his friends overseas has become                                                                        SHOW is aimed at providing pleasure and variety to
Like other great births in the past, SHOW was the fruit of       part of his daily life.                                                                                                          consumers by offering a new model of communication that
considerable effort. The brand name was selected out of 500                                                                                                                                       allows users to ‘see and show’ in addition to voice calling.
suggestions that were put forward by BI and brand name           These days the ‘SHOW Korean Report’ that started once the                                                                        This reflects SHOW’s brand vision of providing consumer
specialists and by company-wide internal contributions. The      WCDMA service came into full swing is gaining popularity.      Profile of SHOW                                                   benefits and creating a new way of life.
reason it was chosen was that it sounds familiar and             The campaign, which is about the positive changes a video      WCDMA, a 3.5G mobile technology, is an advanced
exemplifies the major feature of the WCDMA service.              calling service can bring, is seeking widespread approval by   telecom service that is faster than the 2G CDMA service,          The brand logo and BI of SHOW illustrates its brand vision
                                                                 taking advantage of some of the current social issues in       enabling video calling, high-speed data transmission, and         and value clearly. Basically, it was intended to symbolize its
Another contributor to the huge popularity of SHOW is a          Korea. Like its previous ad series, the new SHOW ad is         seamless international mobile roaming. The service will           primary value, offering a new and pleasant lifestyle based on
series of ads for it that has attracted attention from viewers   expected to make headlines with its unique wit.                bring revolutionary changes to people’s mobile lives and          its innovative spirit. For this purpose, a unique design motif,
with their fresh creatives and unexpected plots. The                                                                            pave the way for the real ubiquitous era.                         the ‘Play Button’, was used to represent the service’s video
campaign started with teaser ads featuring sperms and            “Everyone wants to be the hero of a wonderful show. SHOW                                                                         and entertainment features, and letters that seemed to imitate
tombstones and continued with fresh ideas involving              helps them achieve the dream. By allowing its users to enjoy   SHOW is a WCDMA mobile telecommunications brand that              living organic forms were adopted to visualize innovation
Namjoon Baek, the world-famous video artist, some                a variety of pleasures, SHOW enriches their communication      provides various services such as video calling, multimedia,      and pleasure. Overall the logo goes beyond the conventional
inventions and a ‘SHOW Party.’ As a result, the slogan “Do       experience. In order to help our customers find new            information, entertainment and other convenient functions at      BI form and conveys a dynamic image of a mobile life,
SHOW” became one of the most popular phrases in Korea in         communication values, we will continue our efforts to          any place in real time. It can also be defined as a ‘fun’ brand   expressing the imagination of users of SHOW’s new and
the first half of 2007, and was cited in lots of columns and     innovate and move forward.” said Kyutaek Nam, director of      that creates a premium value based on advanced technology         varied services.
articles. On top of that, the ads were parodied in various TV    the business strategy team.                                    and offers people diverse enjoyment.
shows and UCCs, or User Created Contents, resulting in a                                                                                                                                          Through continuous innovation, SHOW, as a leading brand
sensation.                                                       Humans have an instinct to communicate that resulted in the    That’s why SHOW is seeking to brand itself as a ‘Life Fun         in the WCDMA market, will become a new model for
                                                                 appearance of languages and letters. The invention of the      Enabler’, which means being a consumer trend leader               mobile telecommunications, allowing its users to enjoy the
                                                                 phone made it possible to communicate from a distance.         offering visual communication and high-speed data                 benefits at any time and in any place. The brand name and
To Upgrade SHOW                                                  After that, communication evolved out of all recognition,      transmission technology, a major element of WCDMA, and            design of SHOW, which goes beyond the conventional
As SHOW has emerged as the leader of the new paradigm in         leading to the invention of SHOW, the latest 3G mobile         an innovative spirit that allows users to enjoy enriched          format, is innovative and will serve as a major icon
the mobile sector, KTF employees are doing their best to         service. However, this is just the start. Way beyond text      mobile lives. By doing so, SHOW can be a life partner that        symbolizing the vision and value of WCDMA.
provide improved services. To stay at the forefront in the       messages and voice calls, SHOW will bring in tremendous        brings a variety of different pleasures to consumers.
fast-changing telecom market, they are focusing their            changes such as making video calls and accessing any
resources on providing the world’s best services to SHOW         information at any time and any place. Everyone is waiting     This brand value was being considered during the process of
subscribers by strengthening their lineup of 3G phones,          for the new world to begin.                                    creation. The company tried to find a name and a design that

16 IT Korea Journal Winter 2007                                                                                                                                                                                                                 www.kiica.or.kr 17
Journal - Cover Story WCDMA Technology Powerhouse Korea Special Report Outlook for Korean IT Industry in 2008 IT Policy Review Korean-Type IT ODA ...
Special Report The Significance of the Adoption of WiBro/Mobile WiMAX as a 3G International Standard, and Its Future Direction

                                                                                                                                                                         ment, and active support by the private sector. Korea enjoys a                         standard technology group, derivative technology such as
   The Significance of the Adoption of                                                                                                                                   reputation as a powerhouse of IT and broadband infrastructure,
                                                                                                                                                                         but its accomplishments have often resulted from an
                                                                                                                                                                                                                                                                IEEE 802.16m, which is evolving from WiBro in the IP-
                                                                                                                                                                                                                                                                OFDMA format, can get a head start as a 4G (IMT-Advanced)

   WiBro/Mobile WiMAX as a 3G                                                                                                                                            enormous investment in loyalty payments to core technology
                                                                                                                                                                         holders, which have eventually undermined its success. The
                                                                                                                                                                                                                                                                candidate technology.
                                                                                                                                                                                                                                                                As it is expected that allocation of 3G broadband frequency
                                                                                                                                                                         approval of WiBro as a future technology means that WiBro,                             by each government will accelerate, an increase in

   International Standard,                                                                                                                                               independently developed by Korea and standardized as the
                                                                                                                                                                         global standard, has become a global leader, instead of following
                                                                                                                                                                                                                                                                commercial services using WiBro technology will contribute
                                                                                                                                                                                                                                                                a great deal to the reduction of the digital divide, as well as to
                                                                                                                                                                         the advanced countries as in the past. This has been achieved                          the distribution of high-end multimedia services in advanced

   and Its Future Direction                                                                                                                                              by organic cooperation between the government and the
                                                                                                                                                                         private sector including research centers, manufacturers, and
                                                                                                                                                                                                                                                                countries. It is also expected that the WiBro market, as a
                                                                                                                                                                                                                                                                result of aggressive activity by the government and by the IT
                                                                                                                                                          Na Dong-Ju
                                                                                                                                                                         individual companies during the entire process - from techno-                          community after the adoption of WiBro as a 3G standard,
                                                    Director of Business Strategy at the Mobile WiMAX Business Unit of POSDATA, Tel. 82-31-779-2506, dna@posdata.co.kr   logy development, commercialization, and entry to overseas                             will grow dramatically, with the market reaching in the
                                                                                                                                                                         markets, to standardization - allowing the technology to                               region of 9.4 trillion won over the next five years.
                                                                                                                                                                         progress in the global market. It also serves as an excellent
                                                                                                                                                                         example of a Korean R&D project carried out at government                              3. What is WiBro?
                                                                                                                                                                         level. Moreover, with the inclusion of WiBro in the 3G                                 WiBro refers to a wireless Broadband Internet technology

W
                                                                                                                                                                         ■Table 1. The Process of the Approval of WiBro Technology as a 3G Global Standard
        iBro technology, which was developed and                                Korea developed a WiBro prototype for commercialization
        commercialized for the first time in Korea, has been                    jointly with various research institutes and private businesses                           Standard Meetings                Major Topics
                                                                                                                                                                          Prior to the 20th ITU-R WP8F     Raised the approval of WiBro technology as an IMT-advanced standard as an issue in an ITU resolution.
approved as a 3G international standard by ITU-R and named                      including equipment vendors. Korea’s leading mobile service
                                                                                                                                                                          20th ITU-R WP8F                  In accordance with the demand for the revision of ITU-R M.1457, each nation carries out full-scale research for the adoption of
as the 6th technology in 3G mobile telecommunications,                          providers, KT and SKT, started the world’s first commercial
                                                                                                                                                                          (Aug. 2006, US)                  WiBro as a 3rd-generation IMT-2000 standard.
dubbed ‘IMT’. It is a significant step, since it marked the                     WiBro services in June 2006 and now have some 100,000                                     21st ITU-R WP8F                  IP-OFDMA was suggested as 6th technology of IMT-2000, and it was the first meeting to discuss WiBro as 3rd generation technology.
globalization of Korea’s capacity for electromagnetic                           subscribers. In addition, POSDATA, KT, SKT, and ETRI                                      (Jan. 2007, Cameroon)            After meeting, it built IP-OFDMA assessment group and submitted an assessment report on the introduction of WiBro technology.
technology, and took its competi-tiveness in the global market                  played a leading role in bringing WiMAX technology to life                                22th ITU-R WP8F                  Passed the agenda by convincing Qualcomm and Ericsson and adding a proviso for disagreement by China.
to the next level as a leader in next-generation wireless                       in the global market, by actively participating in international                          (May. 2007, Japan)               Laid the agenda before an ITU-R SG8 meeting.
                                                                                                                                                                          ITU-R SG8
technology. Moreover, the fact that it was Korea’s first                        standard organizations such as the WiMAX Forum and ITU-                                                                    Decided to hold a special WP8F meeting as China and Germany continue to raise technical problems relating to IP-OFDMA.
                                                                                                                                                                          (Jun. 2007, Switzerland)
comprehensive project related to stan-dardized frequency                        R. As a result of this sort of effort at government level, the
                                                                                                                                                                          ITU-R Special WP8F               Event to demonstrate the WiBro experience ends successfully.
distribution, and the result of a successful joint strategy                     inclusion of WiBro in the 3rd-generation IMT-2000 global                                  (Aug. 2007, Korea)               Finalized the submission of all three recommended revisions (M.1457, M.1580, M.1581) to RA.
between the private and government sectors targeting a                          standard began gradually to be discussed. The following is a                              ITU-R RA
                                                                                                                                                                                                           Approved WiBro technology as the 6th standard of 3rd-generation technology (IMT-2000) under the official name ‘OFMDA TDD WMAN’.
global market, makes it even more meaningful. This essay                        brief summary of Korea’s research activities and its strenuous                            (Oct. 2007, Switzerland)
examines the significance of the approval of WiBro as a 3G                      efforts for the approval of WiBro as the 6th IMT-2000                                                                                                                                                                                  (Source: KISDI, Nov. 2007)
international standard, and its future direction, through an                    standard, from the 20th ITU-R WP8F conference to the ITU-
analysis of the process of adoption of WiBro technology as a                    R Radiocommunication Assembly (RA) in October 2007.
                                                                                                                                                                         ■Table 2. Estimated Global WiBro (Mobile WiMAX) Market Size over the Next Five Years (unit: 100 million won)
3G international standard, and its impact.
                                                                                2. The Significance of the Approval of WiBro as a 3G                                      Classification                                  2008                 2009                 2010                  2011                 2012                 Total
                                                                                                                                                                          Market Size Before                              38,000               66,000              116,000              176,000              248,000               644,000
1. The Adoption of WiBro/Mobile WiMAX as a Standard                                Global Standard and Its Expected Effect and Future
                                                                                                                                                                          Net Market Size After the Adoption
   for 3G Communi-cations                                                          Direction                                                                              of WiBro as 3G Standard
                                                                                                                                                                                                                           1,602                8,627               47,842              104,542              132,166               294,779
Starting with the allocation of the 2.3GHz band for Wireless                    It is safe to say that the adoption of WiBro, the mainstay of                             Market Size After the Adoption
                                                                                                                                                                                                                          39,602               74,627              163,842              280,542              380,166               938,779
Local Loop (WLL) to the WiBro frequency in December                             the IT839 policy, as a 3G standard would not have been                                    of WiBro as 3G Standard
2002, the Ministry of Information and Communication in                          possible without the input of government policy and invest-                                                                                                                                                                            (Source: KISDI, Nov. 2007)

18 IT Korea Journal Winter 2007                                                                                                                                                                                                                                                                                             www.kiica.or.kr 19
Special Report The Significance of the Adoption of WiBro/Mobile WiMAX as a 3G International Standard, and Its Future Direction

■Figure 1. WiBro (Mobile WiMAX) Diagram                                                                                                      ■Table 3. A Comparison between WiBro and Other Mobile Communication Services

                                                                                                                                             Classification                     WiBro                                      HSDPA                                       1xEV - DO rev.A
                                                                                                                                             Outline                            IP-based system that provides high-speed   Cellular system that enhances               Upgrade system for synchronous
                                                                                                                                                                                Internet services even on the move         asynchronous W-CDMA systems                 EV-DO available now
                                                                                                                                             Transmission System                OFDMA/TDD                                  CDMA/FDD                                    CDMA/FDD
                                                                                                                                             Maximum             Uplink         5.2 Mbps                                   1.4 Mbps                                    1.8 Mbps
                                                                                                                                             Transmission Rate   Downlink       24.8 Mbps                                  14.4 Mbps                                   3.1Mbps
                                                                                                                                             Mobility                           over 60 Km/h                               250 Km/h                                    250 Km/h
                                                                                                                                             Period for
                                                                                                                                                                                June 2006                                  May 2006                                    second half of 2007
                                                                                                                                             Commercialization
                                                                                                                                                                                                                                                                                            (Source: MIC, 2007)

                                                                                                                                             ■Table 4. POSDATA’s Mobile WiMAX base station solution

                                                                                                                                             Classification        FLYVO RAS 3000                                                     FLYVO RAS 6000
                                                                                                                                             Type                  Carrier grade macro coverage                                       Universal, macro/micro, indoor/outdoor, wall/pole mountable
                                                                                                                                             Frequency             2.3 GHz, 2.5 GHz (3.5 GHz)                                         2.3 GHz, 2.5 GHz (3.5 GHz)
                                                                                                                                             Capacity              One carrier per sector; three sectors per RAS                      Three carriers per sector; three sectors per RAS
                                                                                                                                             Bandwidth             8.75 MHz, 10 MHz                                                   8.75 MHz, 10 MHz

that allows broadband Internet access, similar to high-speed               As an IT business established in 1989 by POSCO, the               comparative novice in the global communication equipment                      POSDATA plans to continue to conclude contracts for the
Internet services. The term WiBro is an abbreviation of                    leading Korea-based steel producer, POSDATA has focused           market.                                                                       supply of commercial WiMAX networks, and to get into the
‘Wireless Broadband Internet’, a compound of ‘Wireless’                    on IT services, including NI/SI/consulting for businesses at      POSDATA possesses an end-to-end product portfolio, from                       global market, including Europe, using the recent adoption of
and ‘Broadband’. It is commonly known internationally as                   home and abroad, for over 18 years. It also went into the         infrastructure equipment to terminals and services, and is                    WiBro as a 3G standard as a springboard.
Mobile WiMax. In other words, WiBro, as its name suggests,                 mobile WiMax equipment business, which has a high                 preparing for full-scale market expansion in the future when                  POSDATA plans to make a real contribution to the develop-
refers to a service that allows high-speed wireless Internet               potential for growth and is closely related to POSDATA’s          customer demands start to become more diverse. It also                        ment of Korea’s communication industry, while maintaining
access while on the move, through a variety of terminals.                  business portfolio, some 3 to 4 years ago. It now possesses       effectively consolidates its R&D capacity through partner-                    its position as a technology leader through consistent
As WiBro is based on IP, the most universal network techno-                good source technology, and is energetically pursuing global      ships, and has been actively engaged in the WiMAX Forum                       development in the future. It also plans to secure its technology
logy, it provides an Internet access environment identical to              markets for its portfolio.                                        and the IEEE802.16 standardization group, helping to secure                   and market leadership through innovative ideas not known to
wired Internet access, through a variety of mobile devices                 Currently, one fourth of POSDATA staffers are involved in         its position as a technology leader.                                          its rivals, including the development of unique solutions
including laptop computers, thus allowing two-way broadband                the mobile WiMax business field. Thanks to financial support      POSDATA is further seeking to enter the multimedia mobile                     based on its experience in the construction of the 2.3/2.5GHz
communication more cost-effectively compared to standard                   from its mother company POSCO, POSDATA expects to                 device market now that basic access and multimedia devices                    roaming zone, and the development of creative services
3rd-generation mobile communication.                                       continue its aggressive investment in business, marketing and     are globally popular. POSDATA’s G100 terminal is the world’s                  related to terminals.
Accordingly, WiBro can yield more profit for mobile                        R&D.                                                              first mobile WiMAX online game terminal, which garnered
carriers, making it possible to build the next-generation                  From the beginning, POSDATA set itself apart from its rivals      much attention in IT circles and from the world press during
mobile communication network at less cost.                                 to achieve success in the global market by concentrating on       ‘WiMAX World USA 2007’. Also, its USB-type U100
                                                                           targeting customers with startup businesses, and maintaining      terminal, which was unveiled in early 2007, passed the KT
WiBro supports the Mobile WiMAX 1A profile, and the core                   its open architecture-based product design system as part of      certification test.
WiBro technologies are the basis of mobile WiMAX.                          its strategy.                                                     Utilizing its system, and terminals ready for mass production,
Accordingly, the current mobile WiMAX and WiBro share                      With the development of its source technology and its early       POSDATA has conducted dozens of field trials in Asia and
systems are the same size, but the commercial service                      progress in the market based on this technology, POSDATA          the U.S. since 2005. Based on this experience, POSDATA
provided in Korea now is WiBro.                                            enjoys a reputation as one of the few global equipment busi-      has entered into commercial contracts with various businesses
                                                                           nesses that can supply commercial products, establishing itself   and has also signed a contract for commercialization with an                   U100                                               G100

4. POSDATA’s Current WiBro (Mobile WiMAX) Project                          as a technology leader in the IT market despite its being a       influential business in Southeast Asia. Furthermore,                                                                          POSDATA’s Mobile WiMAX Terminal Solution

20 IT Korea Journal Winter 2007                                                                                                                                                                                                                                                           www.kiica.or.kr 21
Special Report Outlook for Korean IT Industry in 2008

                                                                                                                                     of service subscribers. At the company level, the KT and SKT                                     has, in turn, thrown service operators into cutthroat
   Outlook for Korean IT Industry                                                                                                    Groups are worth keeping an eye on. For the KT Group,
                                                                                                                                     operating profit is expected to increase in 2008, triggered by
                                                                                                                                                                                                                                      competition, regardless of whether they are involved in wired,
                                                                                                                                                                                                                                      wireless or telecommunications services.” It also expected that

   in 2008                                                                                                                           its aggressive investment in facilities and marketing in 2007.
                                                                                                                                     Also positive is that a variety of asymmetric regulations are
                                                                                                                                                                                                                                      this deregulation would result in the release of various
                                                                                                                                                                                                                                      convergence services. In particular, Internet telephony
                                                                                                                                     being sorted out. For example, the amendment to communi-                                         convergence services would be stimulated, along with a
                                                                                                                                     cation regulations dated March 15, 2007 gave the green light                                     number porting system for Internet telephony, effective from
                                                                                                                                     for controlling operators to be allowed to sell convergence                                      2008.
                                                                                                                                     services, and a declaration system was adopted. For its part,                                    IDC Korea also came out with a positive forecast for the
                                                                                                                                     SKT is also likely to make waves in the market once the                                          mobile communication sector, saying that “Despite market
                                                                                                                                     acquisition of Hanaro Telecom is complete. Then it will be                                       saturation, due to aggressive HSDPA marketing activities and
                                                                                                                                     able to take advantage of both wired and wireless services and                                   active efforts to expand its subscriber base, the mobile sector
                                                                                                                                     move forward into the IPTV business.                                                             attracted an increasing number of subscribers in 2007, 6.9%
                                                                                                                                                                                                                                      up from a year earlier, to reach 42.95 million and its
                                                                                                                                     Outlook for 3G Service                                                                           subscriber base will record 45.70 million in 2011 with a
                                                                                                                                     IDC Korea recently published a report entitled ‘Analysis and                                     penetration rate of 93.3%.” It further estimated that the
                                                                                                                                     Prospects for the Korean Telecommunications Service and                                          number of 3G service subscribers including EV-DO and
                                                                                                                                     Device Markets’, which forecast that the domestic communi-                                       HSDPA/HSUPA would exceed that of 2G and 2.5G from
                                                                                                                                     cation service market will grow to reach approximately 28.9                                      2007, and the proportion of 3G subscribers would reach
                                                                                                                                     trillion won in 2007 from the 2006 figure of 26.9 trillion won,                                  89.6% in 2011.
Market Size - Telecommunications Industry                       Outlook for Telecommunications Service in 2008                       and enjoy an annual growth rate (CAGR) of 3.8% for the next
According to the market forecast, domestic IT service           The market has taken note of the recent deteriorating perfor-        five years to record around 32.4 trillion won in 2011.                                           As for the communication device market, it has been enjoying
industries will record a volume of around 52.850 trillion won   mance by domestic telecom operators, caused by increased                                                                                                              rapid growth between 2006 and 2007 as mobile communi-
this year. A report released by KDB (the Korea Development      marketing expenses. But some attention should also be paid           The report states that “The Korean telecommunications                                            cation service providers invested more in building the
Bank) in December, entitled ‘Outlook for Major Industries’,     to a potential profit increase in 2008, attributable to the rising   service market became saturated in 2006, recording a growth                                      nationwide network for HSDPA. From 2008 the market will
shows that the domestic telecommunications service market       number of subscribers and revenue per subscriber. From the           rate of only 3% from a year earlier. In this situation, the                                      also be able to maintain the status quo with new investment in
is estimated to reach 52.8533 trillion won in annual revenue    perspective of service providers, they may be able to increase       government came up with a roadmap for deregulation - e.g.                                        HSUPA. By contrast, further growth in the domestic fixed
this year, which is up by over 2.2000 trillion won from the     operating profits without much difficulty through adjustment         permitting cross-penetration in wired or wireless markets and                                    line communication device market will be restricted.
previous year (50.6258 trillion won).                           of their expenses, since marketing and depreciation costs are        encouraging new communication operators to start up - which                                      Nevertheless, the demand for large-scale equipment is likely
                                                                variables, even if the subscriber base and ARPU cannot be
By sector, the mobile communication market in the first half    grown easily. It is estimated that in 2008, the operating profits
of 2007 (Jan~June) showed a remarkable growth rate of           of Korea’s six telecom service providers listed on the stock          ■Table 1. Market Forecast of Korea IT Service Industries (Unit: 100 million won)

11.6% over the same period in 2006 thanks to the appearance     exchange market will increase 23.5% to reach 6,234 trillion
of new services like 3G (third-generation) mobile               won year-on-year.                                                         Fixed-line                                                                                13.4903 trillion won                                                              2006
                                                                                                                                      Communication                                                                                    13.896 trillion won (-2.8)
communication. And annual revenue reached 20.4735 trillion                                                                                                                                                                                                                                                            2007 (prospects)

                                                                                                                                            Mobile                                                                                                                  18.6790 trillion won
won, 9.6% up from a year earlier.                               To be more specific, investments in wireless rather than              Communication                                                                                                                            20.4735 trillion won (9.6)
                                                                wired will make better returns. When it comes to the fixed
                                                                                                                                        Broadcasting                                                     9.3512 trillion won
On the other hand, the fixed-line communication market is       line sector, next-generation services like WiBro and IPTV                   Services                                                       9.7767 trillion won(4.6)

5.3% down over the same period in 2006 and around 2.8%          will not be activated in the immediate future. The sector’s                                                                            9.1053 trillion won
                                                                                                                                              Others
down year-on-year, recording 13.896 trillion won, due to        operating profit in 2008 is estimated to grow only 11.6%                                                                                 9.5135 trillion won(4.4)

shrinking local call volumes and a stagnating broadband         from a year ago. On the other hand, the wireless sector is                     Total
                                                                                                                                                                                                                                                                                                            50.6258 trillion won
                                                                                                                                                                                                                                                                                                            52.8533 trillion won(4.4)
network market.                                                 expected to enjoy a remarkable growth rate of 30.5% in
                                                                operating profit year-on-year thanks to skyrocketing numbers                           Please note that the figure in round bracket indicates the growth rate compared to the last year.                      (Source: the Korea Development Bank)

22 IT Korea Journal Winter 2007                                                                                                                                                                                                                                                                                www.kiica.or.kr 23
Special Report Outlook for Korean IT Industry in 2008                                                                                                                                                             Special Report User-Centric Intelligent u-Home Services

to rise because communication service providers need more          already reached the point where a mobile phone service
than ever to improve their network infrastructure in a situation
where high-speed broadband Internet such as FTTH and
                                                                   based on WiBro can be commercialized. Against this
                                                                   backdrop, the discussion on whether to go for voice support
                                                                                                                                         User-Centric Intelligent
100Mbps prevails, and an IPTV service is being introduced.         is likely to be lively, across the board in business and
                                                                   academic circles as well as in government.                            u-Home Services
Outlook for WiBro
■More Active Market with International Standard                    Outlook for IPTV Service
   Designation and Government Assistance                           A survey of IT experts shows that the key issue in the IT
Although WiBro was first commercialized in Korea in 2006,          industry this year will be IPTV. This results from
the market has not really been activated yet. Since WiBro          expectations that the business will be stimulated by the
operators like KT and SKT have been somewhat negative in           institution of a relevant legal framework.
terms of investment in building infrastructure and marketing                                                                                                                                                                           Korea Home Network Industries Association
activities, the number of service subscribers is now barely        The Federation of Korean Information Industries (FKII)                                                                                                                   Tel: 82-2-2626-8670, enjoy@hna.or.kr

over 100,000 (as of late November). Even this figure is only       conducted a survey of 227 IT experts on the outlook for the
attributable to marketing activities launched by KT in April       IT industry in 2008 and announced on November 28 2007
2007. The number of SKT subscribers is still as low as 1,000.      that 78.4% or 178 respondents to the survey anticipated that
However, the Wibro industry is facing a new turning point as       IPTV would be the key issue in the IT industry next year.
the 3G standard and frequency band are to be decided. It is all    The survey was based on 32 keywords from a preliminary
the more encouraging that the Ministry of Information and          study of IT expert groups, and the respondents consisted of
Communication (MIC) got off the fence regarding which area         227 IT experts including industry workers, professors and
to support, either 3G or WiBro, and is now aggressively            researchers. Multiple responses were permitted.                    Introduction                                                      a large market for years to come.
devoted to nurturing WiBro.                                                                                                           In advanced economies such as the United States, Japan, and
                                                                   As a communication and broadcasting convergence service,           Europe, the wave of ubiquitous revolution is sweeping across      Home Networking Today
Back on November 20 2007, MIC formed a task force to               IPTV is expected to be the new breakthrough for the telecom-       industrial sectors, taking with it government agencies and        Although home networking is one of the most promising IT
stimulate WiBro in order to speed up the activation of the         munications industry, which has been suffering from market         R&D organizations, as well as private corporations.               areas of the future, there are several problems to overcome in
Wibro market. The consultative body plans to encourage KT          stagnation, in that it can deliver a variety of business oppor-    Not to fall behind, the Korean government is leading an           order to make this a reality. The first problem has to do with
and SKT to place equipment orders to extend their service          tunities including a real-time ground-wave broadcasting service.   initiative to put the nation on the ubiquitous map, by encoura-   the lack of test beds that would provide integrated testing
areas by the year end, and support WiBro R&D companies                                                                                ging basic technology development projects and standard           environment supporting different networks and terminals.
including Samsung Electronics and POSDATA to develop               Following IPTV (78.4%, 178 respondents), the 3G service            setting. The most promising area of growth under this new         Secondly, the true ‘killer app’ for the technology has not yet
technologies for enhancing transmission speed and access           (76.2%, 173 respondents), ubiquitous infrastructure (73.1%,        ubiquitous computing paradigm is none other than the home,        emerged. The third problem is that truly integrated home
quality. According to these plans, KT and SKT are going to         166 respondents), UCC and copyright (70.5%, 160                    where the demand for such technology is expected to be the        digital service has a long way to go because of, among others,
build a WiBro network in 9 cities including Seoul and other        respondents), and web 2.0 (66.5%, 151 respondents) were            highest. In other words, home networking technology will be       the lack of interoperability between the devices and of
capital areas, and improve the service in 23 cities including      chosen as key topics for the IT industry in 2008. This result      the driver for a fully ubiquitous society.                        effective middleware technologies.
Seoul, metropolitan cities and capital areas.                      shows how hot RFID, UCC and web 2.0 were in 2007, along            The home networking industry is already part of the govern-       Most home networking technology initiatives currently
                                                                   with the designation of WiBro as a technology standard.            ment’s ‘u-IT839’strategy by which the nation could maintain       underway are short of being user-friendly, meaning that they
■Support for WiBro Voice Service                                                                                                      the status as the world’s best in information technology. A       are not capable of working seamlessly on simple command
Many people in the industry see that the recent demand to          ■Table 2. IT Hot Issues in 2008 (Unit: %)                          combination of leading-edge technologies and conventional         of the user. Instead, these are mostly based on clumsy sets of
stimulate the WiBro market will naturally result in providing                                                                         services including communications, broadcasting, and const-       machine controls, let alone being linked organically with
                                                                    Rank     Description                                Rate
support for a voice service. Even though the service is               1      IPTV                                       78.4
                                                                                                                                      ruction, the global home networking industry is predicted to      other devices.
normally thought of as high-speed mobile Internet, WiBro              2      3G Service                                 76.2          grow as much as US$103 billion by 2010.                           In order to realize a genuine ubiquitous environment,
can see a mobile phone service put in place more cheaply              3      Ubiquitous Infrastructure                  73.1          Amid the scramble among the world’s leading companies to          however, it is necessary to develop more intelligent, adaptive,
than conventional mobile phones if mobile VoIP (Internet              4      UCC and its Copyright                      70.5          get hold of core technologies, the same is happening in Korea     and user-centric solutions, which would be the prerequisite
telephony) technology is added in. Technologically, we have           5      Web2.0                                     66.5          where well-developed communication infrastructure portends        for highly invisible service. For this to happen, a develop-

24 IT Korea Journal Winter 2007                                                                                                                                                                                                                            www.kiica.or.kr 25
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