A laboratory accommodating five cutting-edge 3D printers, a never-before-seen collection of Internet of Things (IoT) parts, and a financial technology (fintech) support center. Those futuristic terms and related devices that may be new to most people are being tested and developed at the Gyeonggi Center for Creative Economy & Innovation, a facility that mobile carrier KT opened March 30 along with the local government and other public organizations.
Under the creative economy agenda pushed by the Park Geun-hye administration, conglomerates and major enterprises have joined forces with the government to open a series of innovation centers; the KT center in this technology hub, often compared to Silicon Valley, is the eighth of 17 planned. Ten days after its official opening led by the Blue House and KT, tech reporters were invited for a tour last Friday and to talk to employees and heads of companies that have nestled into the space KT rented after seeing their potential.
Three Korean mobile carriers will make a full-scale investment this year in facilities for next-generation technologies for 5G, the Internet of Things (IoT), and GiGA Internet. According to industry sources on Feb. 5, three carriers announced that they will make a nearly 6.5 trillion won (US$6.0 billion) investment in facilities this year during their briefings on results for Q4 2014. SK Telecom is planning to do 2 trillion won (US$1.8 billion), KT 2.7 trillion won (US$2.5 billion), and LG U+ 1.7 trillion won (US$1.5 billion). Although KT’s investment in 2015 is expected to go up 7 percent from the previous year, the number for SKT and LG U+ is a year-on-year decline of 6.8 percent and 23 percent, respectively.
The total investments by the three carriers are projected to decrease this year, as they were around 7 trillion won in the past. The phenomenon is due to the fact that they do not heavily invest in LTE facilities anymore, following a rapid increase in investment over the last four years. In other words, competition between mobile carriers to build LTE networks nationwide, which started in 2011, is coming to an end.
The three local mobile carriers are diversifying their business portfolios amid saturation of the domestic mobile telecom market.
SK Telecom, KT and LG Uplus are likely to strengthen their focus on the Internet of Things (IoT), one of the major new growth engines for the telecom industry. SK Telecom, the nation’s largest mobile carrier, said it is looking to three new businesses ― media, healthcare and business-to-business (B2B) including the IoT ― in the coming years.
KT, the nation’s largest fixed-line operator, plans to continue its five key new businesses ― smart energy, integrated security systems, media, healthcare and intelligent traffic control. Chairman Hwang Chang-gyu pledged to foster the five segments.
LG Uplus, the nation’s smallest telecom firm, said it will expand its effort to take the next step from its existing telecom businesses. In an end of year press conference on Dec. 5, Vice Chairman Lee Sang-chul emphasized that “now is the tipping point to cope with the biggest changes the world’s information and communication technology industry has seen so far.”
The Ministry of Science, ICT and Future Planning said yesterday the number of altteul, or thrifty, phones in use nearly doubled in a year to 2.48 million as of Dec. 31. Thrifty phones now account for 4.55 percent of the mobile phone market. The altteul phone service (MVNO) provides affordable mobile communications services by borrowing radio wave spectrums from conventional mobile networks.
The growth in altteul subscribers was most pronounced in the fourth quarter, when the thrifty smartphones started selling at post offices and at E-Mart.The 12 altteul phone businesses that provide service by borrowing from KT’s network had 1.165 million subscribers, while the nine operators borrowing from SK Telecom attracted 1.036. Seven businesses that borrowed from LG U+ had 280,000.
However, the highest growth rate of 162 percent was seen in SK affiliates, which went from 394,000 subscribers to 11.036 million. This was followed by 77 percent for KT affiliates, from 657,000 to 1.165 million, and 29 percent for LG U+ affiliates, which saw subscribers rise from 215,000 to 280,000. Meanwhile, revenue for altteul phone operators for 2013 shot up 107 percent form 119 billion won ($111.9 million) in 2012 to 247.4 billion won last year. Sales of altteul phone devices were 378.3 billion won in 2013.
The ministry announced the results of its assessment of the quality of local telecommunications services this year. It was the first year it made assessments for the new long-term evolution (LTE) services.
There are three kinds of LTE services available. Regular LTE is a fourth-generation telecommunication service that offers data flow as fast as 75 megabits per second. LTE-A doubles the speed up to 150 megabits per second by connecting two separate LTE bandwidths. Broadband LTE does the same by widening the bandwidth.
SK Telecom and KT succeeded in launching broadband LTE services by acquiring bandwidth in August next to their existing bandwidth. At an August auction, LG U+ obtained a bandwidth relatively far from its 2.6 Gigahertz and has been building a new network for broadband LTE service. LG U+, the nation’s smallest mobile carrier, was assessed by the ministry to be providing LTE-A service at 43.1 megabits per second for downloading data, slower than the average 47.2. Market leader SK Telecom was fastest at 56.2 megabits per second and KT came in at 50.3 megabits.
Lee Suk-chae, chairman and CEO of telecommunications giant KT, vowed Tuesday to develop more content-oriented revenue sources, saying it can’t survive by only sticking to its conventional business models. He said the nation’s dominant fixed-line operator is going to spend 3 trillion won by 2017 on a “network revolution” in a strategy to offer creative contents and services that run on faster networks.
In detail, the company plans to invest 2.5 trillion won in backbone networks, while the remaining 500 billion won will be used to speed up networks for households.
Local mobile carriers are aggressively expanding their long-term evolution (LTE) networks but this is raising concern among some observers that Korea maybe going a little too fast and could lose money and isolate itself technology-wise. SK Telecom, KT and LG Uplus have poured trillions of won in building additional radio stations and access points for LTE across the country since 2011.
No country has a higher penetration of the fourth-generation (4G) network than Korea, though the United States and China obviously have a higher number of subscribers. Over 60 percent of smartphone owners in Korea use LTE, which amounts to 16 million people, according to local analysts. Korea is the only country embracing LTE technology at this rate. The U.S. and China still widely use 2G and 3G connections. In Europe, the LTE market is just blossoming, and developing nations are still in the process of transitioning.
Mobile operators are frustrated with automobile firms for being slow in adopting converged services in cars. SK Telecom, KT and LG Uplus have vowed since early 2008 to make what they call smart cars that use information technology for both public and private vehicles.
The three carriers have already signed agreements with car makers for mutual cooperation. But a truly dynamic service that combines their capabilities is yet to surface due to automobile companies’ sluggishness and domineering attitude, said officials from the carriers. SK Telecom and KT are partnered up with Kia Motor and Hyundai Motors respectively, while LG Uplus has signed pacts with multiple small- and medium-sized firms.
So far, KT, Korea’s No. 1 fixed-line and runner-up mobile operator, has been most active in marrying information technology and vehicles. It recently agreed to implement some of its service on Hyundai’s buses and trucks that help clients locate their cars and archive driving history.
South Korean mobile carrier KT announced Thursday that it has been chosen as an operator of the state-run Korean Environment Corporation’s (KECO’s) pilot project for establishing a comprehensive information system for electric vehicle (EV) recharging infrastructure nationwide.
KT plans to develop the comprehensive information system using such technologies as radio frequency identification (RFID), machine to machine (M2M), wideband code division multiple access (WCDMA), and the credit card payment system, and set up the system at the KECO by the end of this year.
KT was selected as the KECO’s pilot project operator as it has been accumulating extensive experiences and technologies in the EV-related sector. Earlier, KT had participated in Jeju Smart Grid Test-bed project, Seoul City’s EV sharing service enterprise, and the KECO’s project for providing wireless communications circuits and communication terminal equipment for EV rechargers.
Though mobile carriers are seeing a rapid rise in long-term evolution (LTE) network subscribers, they are also anxious to earn revenues from what was hitherto considered out of their business areas.
SK Telecom, KT and LG Uplus have shown near same services in telecommunication business recently, all boasting a nationwide LTE network and all releasing voice over LTE (VoLTE, or making voice calls available on an LTE network).
Market saturation and the declining profits due to heavy investments on network building are now pushing companies to find a way to increase competitiveness by differentiating themselves from rivals, especially for the second half of this year.
SK Telecom, which announced 4 million LTE subscribers Sunday, wants its members to take a keen interest in its growing content.