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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
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
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
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
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
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
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
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
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
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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