South Korea increase 3G handset subsidies

May 29, 2005

South Korea's SK Telecom said it has upped the subsidies for 3G mobile phones by an average 50% in an attempt to boost demand for the high-speed mobile phone service.

The firm is trying to attract consumers to sign up to their 3G mobile phone service which is based on the European W-CDMA standard.

The Korea government has in the past criticised both SK Telecom and KTF, who also operate CDMA2000 networks, for failing to spend enough on their WCDMA networks.

The Ministry of Information and Communication (MIC) had issued warnings to both firms for their low investment in WCDMA.

"WCDMA licensees of SK Telecom and KTF were supposed to channel 300 billion won and 250 billion won last year on the platform, but they spent 90 percent and 88 percent of the planned investment,'' an MIC official said.

SK Telecom aims to attract 200,000 clients this year to WCDMA while KTF hopes to sign up 50,000.

WCDMA made its debut in Korea in December 2003 but was received with little interest. Only a handful of customers have signed up to the service due to its bulky mobile handsets and technical glitches.

The uncertainty over demand for WCDMA has lead to both SK Telecom and KTF being hesitant to invest heavily in the technology.