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SK Telecom marks out new territory

http://www.koreaherald.co.kr/SITE/data/html_dir/2005/07/18/200507180011.asp


Armed with new strategies and technologies, SK Telecom Co., Korea's largest-mobile phone carrier, is rapidly expanding in related markets.

In efforts to help bolster the local information-technology sector and generate new revenue, the company, which boasts a more than 50 percent market share in Korea, has been eagerly rolling out new products.

Korea is one the world's fastest-growing markets for wireless devices, but lately, the government has been growing increasingly concerned about the saturating market.

Although Asia's third-largest economy remains a robust player in the global information-technology sector, exports of IT-related goods have recently been slowing down after peaking to a record-high $74.3 billion last year.

Now, backed by strong support from local IT companies, the government hopes to nurture eight new growth engines.

SK Telecom is engaged in a host of new services. including the portable Internet, mobile television, home networking, vehicle-based information systems, radio-frequency identification technology, W-CDMA mobile telephony, digital television broadcasting and voice-over Internet protocol services.

The government, led by the Ministry of Information and Communication said it will encourage private investment in these areas by funding research and offering business incentives.

We strongly believe that by launching services in the new growth areas, we can help both the industry and our own company in an environment where more competitors are eyeing a rapidly diminishing pie, said Ko Chang-kook, a senior manager of SK Telecom.


User-friendly services


All of SK Telecom's wireless services are user-friendly and aimed to make life more easy for consumers, but out of the bunch, mobile television, home networking, vehicle-based information systems, portable Internet and W-CDMA mobile telephony are probably the most practical and effective.

And the beauty of these services is that they are interacting and mutually benefit each other, says Baek Chang-don, manager of SK Telecom.

In the mobile television business, also known as digital multimedia broadcasting (DMB), SK Telecom dominates the industry via TU Media Corp., Korea's lone satellite-based mobile television broadcaster.

The telecom company holds a 30 percent share in TU Media that went commercial in May this year.

Through TU Media, customers can watch television and listen to music via their cell phones while traveling in cars or on commuter trains.

After several months of trial operations, TU Media went commercial by launching seven video and 20 audio channels featuring programs from leading cable television stations such as news network YTN, sports channel MBC-ESPN and music channel m-Net.

Backed by SK Telecom's strong consumer base and wide expertise, TU Media plans to eventually expand its network to 14 video channels and 24 radio channels, while releasing a separate channel next year for data services, which could be used to provide updated information on weather, traffic and stock exchanges among others.

The company recently struck a deal with EBS to offer educations programs and is in discussions with the country's other three land-based television broadcasters - KBS, MBC and SBS.

Noting the strong start, industry watchers forecast a bright outlook for TU Media and satellite DMB. Studies show that out of 700 Internet users, 62 percent responded that they would watch satellite DMB, mostly because of the seamless data transmission and a wide variety of channels.

The Korean Society for Journalism and Communication Studies estimates the satellite DMB will generate around $7.8 billion in industrial production by 2012.

Earlier, skeptics had predicted failure for satellite mobile television would be unsuccessful due to competition from similar services provided by terrestrial broadcasters that is free of charge.

But terrestrial DMB has actually been slower to take off due to clashing interests between the land-based broadcasters.

To strengthen its foothold in the market, SK Telecom plans to release exclusive mobile handsets for accessing DMB and keep fees at a reasonably low rate.

Along with giving access to television outside the home, SK Telecom is giving customers the keys to run their households using their mobile phone.

Applying the term ubiquitous to the home, SK Telecom's home network service provides security programs for protecting homes, a control pad for facilities such as lights, gas, computers and more. Video-on-demand and other forms of entertainment also are offered.

Currently, the services are being tested in 600 households in the country's major cities.

SK Telecom plans to commercialize the services before the year is out.

For motorists, the wireless operator offers its NATE Drive system, a vehicle-based information system that was born two years ago.

By providing a detailed guide to specific locations, shortcuts to destinations and other on-the-road data to navigate through the busiest streets, NATE Drive boasts a subscription volume of 260,000 nationwide as of December last year.

The number was a surprise for industry watchers who were largely skeptical about the service. In Japan, only about 20,000 are subscribed to such services.

NATE Drive also cuts costs for spend-thrift divers as it provides all services through a mobile phone and a simple supporting device.

By providing custom-made services for each province, SK Telecom plans to widen its NATE Drive consumer base to 500,000 this year.

To avoid incurring fresh costs, the wireless operator will use existing equipment and infrastructure for new services, a strategy that will slash investment costs by about 774.1 billion won.

In the field of portable Internet, dubbed by Korean officials as WiBro for wireless broadband, SK Telecom SK Telecom is confident of providing top-quality service with its wide customer base and cutting-edge cell phones.

WiBro is a homegrown portable Internet technology designed to provide wider coverage than wireless LAN services and faster connection that third-generation mobile-phone services.

Next year, SK Telecom, along with KT Corp., the country's privatized telecom company, is planning to commercialize WiBro services.

The main idea of WiBro is to provide access to the Internet for users on the move. The services also include music, instant messaging, games, video-on-demand and more. SK Telecom stressed that it will establish a strong security system to prevent any misuse of information that users release while using WiBro.

In addition, SK Telecom hopes to expand its network for WCDMA (wideband code division multiple access) to cover 23 cities this year, including the major areas of Seoul, Busan, Daegu, Incheon and Gwangju. It has earmarked investment of up to $584 million this year.

WCDMA is one of the most widely-used third-generation mobile telephony standards used in the world today.

The company targets 200,000 WCDMA customers this year, which is expected to grow to 1 million by 2007.


Fun and entertainment


One of the new services that SK Telecom recently launched is 1mm. The service caters to the whim of consumers by allowing them to carry out conversations with imaginary characters embedded in their cell phones.

Customers can also play games, send instant messages to friends, search for information on the weather, fashion, television programs and more.

The best feature of 1mm is that it can pick out the information that the user wants and also interact.

At the moment, only two types of mobile handsets have access to the service, but manufacturers are expected to roll out about 14 types of handsets this year.

Accessing the lucrative on-line music market, SK Telecom launched a ubiquitous music service MelOn in November this year that provides songs to customers at any given time, via a wide range of multi-media channels.

Above all, MelOn is most noted as being the first attempt by a wireless operator to put a price tag on MP3 files. The move had a huge impact on changing the landscape for the market since in the past, consumers usually downloaded files illegally.

Industry watchers say the pie has now become bigger thanks to the rapidly growing number of paid services.

This year, SK Telecom plans to build up its database to top-notch and upgrade its exclusive music players.

Games are another dimension that mobile carriers have been expanding in. SK Telecom believes its brand name has the advantage of attracting users over shorter periods of time. The company topped the game charts as about 90,000 users downloaded its GXG game.

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2005.07.18