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Korea Set to Outpace Japan in Mobile Broadcast Race
South Korea is poised to nudge past Japan in commercializing satellite digital multimedia broadcasting (DMB), thanks in large part to its strength in the cell phone industry.
TU Media, the affiliate of Korea's No.1 mobile carrier SK Telecom, plans to start the world's first handset-based satellite DMB services next Monday.
By contrast, Japan's Mobile Broadcasting Corp. (MBCo) has been suffering setbacks in drawing customers to its newly launched DMB services with non cell-phone terminals.
Experts point out that cell phones are a key factor in the competition as they are expected to help Korea secure the come-from-behind victory against Japan.
``Although Korea lagged behind Japan in launching DMB services, the nation has a competitive edge in establishing the right direction for broadcasting on cell phones,'' Korean Broadcasting Institute (KBI) research fellow Kim Yung-duk said.
Satellite DMB enables people on the move to enjoy seamless video, CD-quality audio and data through hand-held devices and in-automobile terminals.
Korea, home of the world's runner-up cell phone manufacturer Samsung Electronics and fifth-largest player LG Electronics, set up a plan to launch DMB services via cell phones.
Samsung and LG each developed satellite DMB phone in May last year and the Samsung phone, named SCH-B100, will hit the stands next week through SK Telecom.
Japan betted on in-car terminals but it didn't seem to work as only a small number of users have opted for the mobility-specific services since its inception last October.
Japan also looks to debut its own satellite DMB-phone but its release will be no earlier than next year, according to Kim.
Derby to Become World's First
Conventional satellite systems typically require bulky dish antennas but DMB can be played on small devices thanks to up-to-date technology of building the antenna into a sleek portable terminal.
Companies in Korea and Japan recognized the strong potential of the leading-edge broadcasting system and created TU Media in Korea and MBCo in Japan.
SK Telecom and TU Media forged a consortium in 2003 consisting of about 200 local companies, including contents providers, cell phone makers and financial service firms.
MBCo is a six-year-old joint venture, of which shares were owned by top-notch outfits, such as Toshiba, Toyota, Fujitsu, Panasonic, NTT Data and SK Telecom.
The two entities combined forces to blast off DMB satellite MBSat last March and battled over the driver's seat in the cross-country rivalry of commercializing DMB services.
With the full cooperation of the government, MBCo proved it was a leg up against TU Media, opening its base station for satellite-enabled broadcasting last October.
Japan gave a preliminary license to MBCo back in July 2003 and the interim go-ahead was converted to a permanent one last May, two months after the satellite liftoff.
In stark contrast, parliamentary and administrative procedures in Korea delayed the issuance of the DMB business license, spawning TU Media headache aplenty.
Technically, TU Media was set to kick-start satellite DMB services as of last August but the business license was released as late as on Dec. 30, 2004.
Despite its slow start, the current outlook for Korea is brighter.
Japan developed four non-cell phone DMB terminals but none of the them succeeded in winning the hearts and minds of customers with only 10,000 having signed up for the service up until now.
In comparison, TU Media aims at drawing as many as 600,000 clients by the end of this year through the sleek SCH-B100 handset.
The high-end model, equipped with a 2.2-inch display and a 2-megapixel camera, will sell for somewhere between 700,000 won and 800,000 won and its low power-consumption battery will allow people to watch video for two and a half hours.
TU Media will air three video channels and six audio channels for free during a five-month test run before the full-fledged services are phased in.
Beginning this May, Korean people will be able to enjoy 14 video channels and 24 audio broadcasts for a one-time subscription fee of 20,000 won and a monthly usage fee of 13,000 won. Data broadcast will be added next year.
``Japan appears to realize its mistaken strategy of not going ahead with cell phones and trying to straighten things up. But the nation is not likely to develop DMB-specific cell phones until next year,'' Kim of the KBI noted.
Before satellite DMB takes firm root in Korea, however, some challenges still remain, including the retransmission of terrestrial broadcasting and handset subsidies.
The most pressing issue is the retransmission of the over-the-air TV programs, which will be decided on in February or March by the Korean Broadcasting Commission (KBC).
TU Media has relentlessly sought to air the terrestrial TV programs via DMB service, which faced strong opposition from broadcasters wary of losing their foothold due to the emerging convergence service.
Korea's media unionists even threatened in October that they would go on a general strike if the KBC gives in to the request of TU Media.
In response, TU Media also countered head-on by raising the likelihood of its pulling out of satellite DMB business despite sunken costs amounting to hundreds of millions of dollars.
TU Media originally forecast it would be able to reach the cumulative breakeven point by 2008 through attracting 1.5 million subscribers.
But it claims the breakeven point would be unattainable even by 2010 should terrestrial broadcasters like KBS, MBC and SBS continue to refuse the retransmission of their programs.
Another problem is the high price of DMB phones. It needs to go down to entice its target customers of students and youngsters, who are typically budget-sensitive.
A viable option is to allow subsidies for DMB phones but the possibility remains uncertain because Korea strictly bans financial incentives to new phone buyers with very few exceptions.
Currently, mobile operators can offer 25-percent subsidies for PDA phones with a display size bigger than 2.7 inches and 40-percent for W-CDMA models while all other subsidies are unlawful.
In a meeting with reporters last week, Information-Communication Minister Chin Dae-je said he would come out with flexible measures regarding the subsidy in line with the market climate.
The possibility of legalizing subsidies for DMB phones is still open as Chin insinuated but TU Media will also prepare to forge ahead with less expensive handsets.