In early May, KT Freetel Co. Ltd., South Korea’s second-largest carrier with 12 million subscribers, announced plans to leave CDMA technology behind in favor of further investment in W-CDMA, which is a third-generation GSM-based technology.
The move isn’t too surprising since KTF already launched commercial W-CDMA services in several metro markets, including Seoul in 2003. The problem was luring subscribers away from its CDMA2000 1x EV-DO network, which KTF launched in 2002.
But even as the nation prepares to launch W-CDMA under a government mandate, it is furthering its reputation as a technology pioneer with aggressive plans to upgrade to HSDPA service.
“I really don’t think it’s that surprising when you consider that about 80 percent of the world is using GSM-based technology and understand that W-CDMA equipment is cheaper than CDMA equipment,” said Lance Wilson, director of mobile wireless research at ABI Research. “I don’t think the tech wars exist anymore-I think it’s more about positioning-operators want to be in the best position to service their customers.”
Lucent Technologies Inc. provided the equipment for KTF’s EV-DO network, but said it too is not surprised by KTF’s announcement. Lucent said although it does not expect to supply KTF with W-CDMA gear, it plans to continue supporting the operator’s EV-DO network.
Korean wire reports indicate that KTF plans to spend about $800 million upgrading to a national 3G W-CDMA network it plans to launch sometime during the first half of 2007, promising subscribers high-speed data capabilities.
Furthermore, company President Cho Young-chu was quoted as saying that KTF planned to launch an HSDPA network in more than 80 cities by the end of the year. HSDPA is an upgraded version of W-CDMA allowing faster uplink and downlink data transmissions. Young-chu reportedly went on to say that KTF’s HSDPA network would allow the company to gain enough market share to knock rival SK Telecom off of its perch as South Korea’s No. 1 carrier with more than 19 million subscribers.
But last week, SK Telecom announced that it launched commercial HSDPA service in 25 Korean cities, and plans to expand coverage to 91 percent of the population by the end of the year. The company divulged it spent more than $1 billion during the past three years to launch HSDPA service.
Zhang Dongming, research director at BDA Ltd., put the HSDPA situation into perspective in a recent report, pointing out that HSDPA is becoming a focal point for mobile operators seeking to fend off rival technologies, such as EV-DO and WiMAX. Dongming says mobile operators are racing toward HSDPA with open arms. For instance, Dongming quotes Vodafone Group plc’s Chief Executive Officer Arun Sarin as having said earlier this year that “the ubiquitous availability of HSDPA could kill WiMAX.”
Dongming said Chinese carriers are especially interested HSDPA even though they are still clamoring for government-issued 3G licenses.
China Mobile, the nation’s top carrier with more than 246 million subscribers, feels it cannot afford to overlook HSDPA, wrote Dongming.
Wilson said he expects HSDPA sales to increase during the next few years as carriers try to attract subscribers with faster speeds for data sharing. “Right now, everyone is kind of betting on the future, but you can’t sign up subscribers on the promise of what will be,” Wilson said.
