LG wins 3G handset supply deal

South Korean handset vendor LG Electronics is to provide the low cost WCDMA handset with which the GSMA and its members will spearhead the 3G for All campaign.

An evolution of the trade body’s Emerging Market Handset project, 3G for All is designed to accelerate uptake of WCDMA services around the world through the distribution of more affordable terminals.

LG saw off competition from other vendors, including Nokia, which elected not to participate in the previously held EMH project.

Nevertheless, Nokia executive vice president and general manager for mobile phones, Kai Oistamo, said that the Finnish firm was “pleased to be acknowledged by the GSMA for our efforts. Clearly, we share a common interest in extending the benefits of 3G to ever-wider audiences.”

Twelve operators have committed to buying the LG handset – the KU250 – which is expected to ship at a wholesale cost that undercuts typical entry level 3G phones by about 30 per cent. According to the GSMA, the 12 carriers’ combined orders and common requirements allowed LG to achieve, “major economies of scale in manufacturing, logistics and marketing.”

The 12 operators involved are: Cingular, Globe, Hutchison, KTF, MTN, Orange, Smart, TIM, Telefonica, T-Mobile and Vodafone.

Shipment targets and commitments are not known but the 12 operators combined boast in excess of 620 million subscribers. The handset will be officially endorsed by the GSMA from April to December this year, with commercial availability slated for the second quarter, and LG will strike individual deals with the 12 operators for shipments.

LG ranks in the top five handset vendors worldwide but faces stiff competition from neighbouring vendors. It will be hoping that shipments of the KU250 will translate into market share points. But Motorola, which won both rounds of the EMH project, did not significantly enhance its market share as a result.

“The 3G for All campaign has had a great response from both handset and chipset vendors demonstrating their commitment to work with operators to drive usage of 3G services,” said Craig Ehrlich, chairman of the GSMA, “A highly-capable device that is as attractive and cost-effective as the leading 2G multimedia handsets, the LG KU250 has clear mass-market appeal and will help fuel interest in third generation services across the world.”

“Only 3 per cent of global mobile consumers are currently linked to WCDMA services,” said Skott Ahn, president and CEO of LG Electronics. Making a 3G handset accessible to the market has been a special concern. Most of the current handsets are retailing at a high price. An initiative was therefore needed in order to make 3G more appealing to the mass market.”