Korea unsure of May 2002 3G launch

South Korea's major cellular carriers will introduce wireless multimedia services by June next year -- although they are not likely to be commercial services and may not even be based on 3G (third-generation) mobile telecommunication technology, industry executives and analysts said at a conference here Wednesday.

Problems including the availability of handsets, the stability of the network, and government license provisions could all affect the launch of the service, scheduled to coincide with the beginning of the soccer World Cup in May when Korea, as co-host, will be in the world's media spotlight.

"We are still planning to launch 3G service in May 2002," said Suh Jong Ryeol, vice president of strategic planning at SK IMT Co., the 3G affiliate of the nation's leading wireless carrier SK Telecom Co. Ltd. "We are trying to give a trial service for the World Cup but if manufacturing companies cannot provide a credible system and handset, we cannot provide trial service with 3G. If we cannot, at that time we will provide almost the same service with CDMA2000."

As the world's largest sporting event, the soccer World Cup is being viewed by South Korea's two licensed 3G operators as an incredible marketing and branding opportunity, the like of which is not likely to be seen again for many years. Korea Telecom Corp. affiliate KT ICOM, the other 3G license winner, is also pushing for a May 2002 launch of its service.

The availability of handsets is more complex than getting manufacturing up and running or even importing telephones from Japanese manufacturers. The government has laid down as a licensing condition the need for 3G handsets to be dual-mode, so that they can also be used on the current cell-phone network. At present there are no chips that are compatible with both second generation CDMA and third generation W-CDMA, leaving a significant hurdle for manufacturers to overcome.

"The government issued licenses on condition the phones will roam and be dual mode," said Song Sauk Hun, a senior analyst at Gartner in Seoul. "With that condition, it will be very difficult for the operators to provide service (by May 2002)."

SK IMT's Suh said he doesn't think the government will waver from this position, despite some analysts suggesting that it will. "To avoid over-investment, they will keep the roaming condition," said Suh. "LG announced that they can commercialize a 3G system before May next year. Also Samsung said a few weeks ago that they can commercialize systems earlier than they originally promised."

South Korea already has one of the world's most advanced wireless data networks. The second generation CDMA system was upgraded to a so-called 2.5G service late last year, using CDMA2000 technology that supports data transmission of 144k bps.

To guard against the possible lack of a 3G network, SK Telecom is planning a further upgrade to its 2.5G network. Last week, it said it would have a CDMA2000 1xEV network online in May 2002 -- the upgrade will allow data reception at speeds of up to 2.4M bps (bits per second) and transmission at speeds of up to 153k bps. While not actually using spectrum licensed for 3G services, the system is capable of offering all of the same multimedia services that make up today's 3G dreams.

This last point is not lost on Suh, who realizes that customers care more about the applications and less about the underlying technology.

"It is very difficult to choose the right time to launch a 3G service because while we have a pay-back from the 2.5G system we can meet customer needs," he said.

If the company meets its May 2002 timeline, the system is likely to be little more than a showcase, Suh conceded. "We will roll out step by step," he said. "Even though we are targeting to provide the 3G service in the middle of next year, that does mean we will roll out very rapidly."

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