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Korea demands action on 3G

May 7, 2005 - source: BWCS

The Korean government has lambasted local operators for failing to spend enough on 3G networks and services. The scathing denouncement of the country's three main mobile companies came from an advisory panel to the Ministry of Information and Communication (MIC), which met yesterday. After the meeting the panel issued a warning to the two largest carriers SK Telecom and KTF for their low investment in wideband code division multiple access (W-CDMA) services. The group was also critical of LG Telecom which is due to launch a pilot service of its CDMA2000 1x EV-DV system but has so far failed to do so.

An MIC official claimed that SKF and KTF had only spent 90% and 88% of their planned 3G budgets respectively last year. If the amount of money invested in these services is not dramatically increased, the MIC could issue fines to the operators. SK Telecom has already said it will spend KRw600 billion (US$ 600 million) on its W-CDMA network this year and KTF has promised to pour KRw300 billion (US$300 million) into its 3G programme. Both companies have promised to abide by these amounts.

While the Ministry warned LG Telecom over its failure to launch a CDMA2000 1x EV-DV trial, the MIC tempered its criticism as it felt chipmaker Qualcomm was at least partly to blame for the delay.

SK Telecom and KTF both launched 3G services in December 2003, albeit reluctantly. The pair argue that a lack of suitable handsets and a raft of technical problems have so far held back popular demand for the service and persuaded the carriers not to finish their network roll out. However, the pair have clearly angered the Ministry by letting their investment in 3G fall below the levels they had promised at the beginning of last year.

This year, SK Telecom is targeting a 3G customer base of 200,000 whilst KTF says it will aim for 50,000. With new, lighter and more reliable 3G phones now on the market and with the government deciding to allow operators to continue to subsidise up to 40% of the price of 3G phones (no other handset subsidies are allowed by law), it appears that they may well find it possible to meet those targets.

 

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