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Technical problems haunt W-CDMA

http://www.koreaherald.co.kr/SITE/data/html_dir/2004/03/22/200403220010.asp


Carriers remain unconvinced over standard's market potential
Despite the government's intention to build a reliable market for wideband CDMA, or W-CDMA, the local wireless industry appears reluctant to commit itself to the new market experiment, with no quick solutions suggested for the technical problems surrounding the third-generation mobile platform as of yet.

The Ministry of Information and Communication announced earlier this month that it plans to provide 40 percent subsidies for W-CDMA phones starting in April. The move is an attempt to relieve the widespread complaints over the expensive handsets.

However, mobile service providers have suggested that the phone prices were not much of a factor compared to the technical deficiencies. Many users complained of poor reception, overheating and bulky designs, among others.

"The full-scale commercialization of W-CDMA will never be realized until after phone manufacturers come up with affordable and technically efficient handsets," said an SK Telecom public relations officer. "Wireless service providers would not be able to make specific investment plans in regard to W-CDMA before that point."

Some analysts have a different version of the story, claiming that wireless carriers are reluctant to invest heavily in the new mobile standard since they are not convinced of the market potential.

The government has been pushing the wireless industry over the past few years to enhance competitiveness in the international W-CDMA market, where the platform has been adopted as the 3G standard in Japan, most of Europe and several other countries.

However, with technical problems and market uncertainty causing W-CDMA to get off to a slow start in other countries, it seems unlikely that local wireless carriers will seriously consider jumping ship when the country's mainstream 3G standard cdma2000 1x EV-DO is doing so well. Aside from a few small experimental networks, there are currently no W-CDMA systems outside Japan. Currently, cdma2000 1x EV-DO has 5 million subscribers among the 34 million cellular phone users in Korea.

"It's estimated to take more than 1 trillion won to set up a separate W-CDMA network in Korea and wireless carriers are likely to be reluctant about investing that kind of money when the cdma2000 1x EV-DO market just opening up," said an analyst.

Analysts believe that it will not be until after July that local cell phone manufacturers develop handsets that can work both with W-CDMA and cdma2000 1x EV-DO.

It is unlikely that the wireless carriers SK Telecom and KTF, the two companies that own W-CDMA licenses here, will look for new subscribers before then. The government initially planned W-CDMA services to enter full commercialization at the start of March.

Since SK Telecom and KTF launched trial services in Seoul and eight cities in Gyeonggi Province last December, the new platform has been widely ignored by consumers due to the expensive, trouble-prone handsets and lack of features compared to cdma2000 1x EV-DO services. So far, only 700 registered have for KTF's W-CDMA services and SK Telecom garnered just 490 subscribers.

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By Kim Tong-hyung




2004.03.22