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SK raises discounts on stagnant WCDMA services
Attempting to add new customers to its struggling WCMA services, SK Telecom Co., the country`s largest mobile-phone operator, will offer larger discounts on its WCDMA handsets to make them more affordable to customers.
Company officials said yesterday that SK Telecom will start providing discounts of 300,000 won per unit on its 850,000 won WCDMA handset, a 50 percent increase from its 200,000 discount that began only at the beginning of this month.
WCDMA, short for wideband code division multiple access, is a third-generation mobile telephony standard based on the second-generation GSM (global system for mobile communications) platform that is used in more than 70 percent of the world`s mobile markets today.
The third-generation network is designed to grant customers access to a greater variety of video and data content.
SK Telecom, which has more than 19 million customers for a 51.2 percent market share, has signed up just 1,300 WCDMA customers since the service began in 2003. Around 1,000 of the customers are SK Telecom employees, who subscribed for testing purposes.
"Providing handset subsidies are about the only realistic solution we have now," said a SK Telecom spokesman.
The government granted WCDMA licenses to SK Telecom and KT Freetel Co., the country`s second-largest mobile carrier, in 2003. KT Freetel has fewer than 1,700 WCDMA users.
The mobile operators are far off their sales goals. SK Telecom is targeting 200,000 WCDMA customers this year and 1 million customers by 2007. KTF is targeting 133,000 WCDMA customers this year and also targets 1 million customers by 2007.
Both companies have been reluctant to invest heavily in WCDMA. SK Telecom and KTF has combined to gather more than 10.7 million customers for the cdma2000 1x EV-DO services, the rival third-generation standard to WCDMA.
However, industry watchers expect the mobile companies to take a more aggressive approach in deploying WCDMA in the future, with the emergence of new technologies such as HSDPA, which allows them to advance their data services in a cost-effective way. HSDPA - high-speed downlink packet access - is designed to provide wireless data services on handsets at broadband-level speeds.
With Korea`s wireless penetration reaching 75 percent, SK Telecom had been struggling to keep growth alive in a market approaching saturation. Last week, SK Telecom announced that its first-quarter net income dropped 18.6 percent year-on-year to 368.4 billion won ($368 million), the fourth consecutive quarter of declining profit.