WCDMA services to start in 24 cities this year

WCDMA services to start in 24 cities this year

2005-02-18

Local mobile-phone carriers plan to expand their WCDMA third-generation mobile telephony services to 24 cities by the end of the year, despite the slower-than-expected rollout during the soft-launching period.

According to industry sources, SK Telecom Co., the largest mobile-phone operator, will expand its WCDMA network to cover 23 cities this year, including the major areas of Seoul, Busan, Daegu, Incheon and Gwangju. The company plans to complete equipment purchases by the second quarter and build a nationwide network by the end of the year. SK Telecom said last month it would invest 600 billion won ($584 million) to develop and market WCDMA services in 2005.

KT Freetel Co., the runner-up mobile carrier, will commercially launch WCDMA services in 17 cities this year, according to a draft plan submitted to the Ministry of Information and Communication. The company will compete with SK Telecom in 16 cities, including Seoul and the Gyeonggi Province cities of Incheon, Seongnam, Anyang and Gwacheon.

KTF is also considering expanding its WCDMA services to Jeju Island, hoping to generate revenue from inbound roaming services at the country`s largest tourist destination. KTF plans to spend 300 billion won in developing its WCDMA services this year.

"The government allowed SK Telecom and KTF to change their initial plans for WCDMA from what they submitted during the license bidding process, considering the change in market situation from 2003," said Kim Dong-soo, director-general of the Communication Ministry`s information and communication promotion bureau.

"By giving the mobile carriers more flexibility in selecting service areas and allowing them to share their network infrastructure instead of mandating independent networks, we were able to lower the risks in investment and give the companies a better chance to put WCDMA on the fast track."

WCDMA is a third-generation mobile telephony standard based on the second-generation global systems for mobile communications (GSM) platform that is used in more than 70 percent of the world`s mobile markets today.

Third-generation infrastructure allow a higher data-transmission capability than earlier networks such as second-generation or 2.5 generation mobile telephony, enabling advanced features such as wireless Internet, video streaming and data-casting atop of voice communication.

Since the government granted SK Telecom and KTF licenses in 2003, WCDMA got off two a slow start in Korea, with the companies gathering just 2,500 customers.

The mobile carriers were reluctant to invest heavily in an unproven system when they already combined to gather more than 32 million subscribers for the 2.5-generation cdma2000 1x and third-generation cdma2000 1x EV-DO services.

There were also worries that emerging portable Internet technologies, including the IEEE 802.16 standard-based WiBro, will eventually make WCDMA irreverent.

To ease the burden on investment, the government allowed the mobile-phone carriers flexibility from the business plans they submitted in 2003 during the licensing process.

Under the new agreement, KTF will be required to build WCDMA networks in only 45 cities and borrow SK Telecom`s network to deliver the services in other areas, as opposed from being mandated to build an independent nationwide network.

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.