opinion


Too soon to write off WiBro

WiBro, Korea’s mobile WiMAX service brand, has often found itself on the receiving end of varying degrees of scepticism. How can it possibly succeed in a market where HSPDA is booming and household broadband penetration exceeds 80 per cent?

And WiBro subscriber figures would appear, at first glance, to go some way in justifying that scepticism: KT (Korea Telecom) had ‘only’ 200,000 WiBro subscribers since it launched the service in June 2006. Bearing in mind that Korea has a population of 48 million, WiBro – say the doubters – is destined to remain a tiny dot on Korea’s bustling broadband landscape.

But two of the main factors that have held WiBro back – a lack of network coverage and a limited range of devices – are being addressed by KT.

It’s worth noting that the June 2006 WiBro launch was restricted to selected areas of Seoul and it wasn’t until April 2007 that KT launched a full commercial WiBro service across the entire area of the country’s capital. This helped to generate greater interest in the service. By the end of 2007, KT’s WiBro subscriber base reached 100,000 and then doubled in size eight months later.

KT has also extended WiBro coverage to 19 cities surrounding Seoul in the Gyeonggi province. These extension areas will go live from 4Q 2008, which will increase WiBro’s population coverage from 12 million to 24 million. That should help WiBro pick up further momentum.

The range of WiBro devices is also expanding rapidly: there are now 21 terminals, three of which are handsets, eight portable PCs and ten USB modems.

This number still falls well short of the 250+ HSDPA-capable devices that are currently available in the global marketplace, but Dr. Hyun-Pyo Kim, director of the WiBro Business Unit at KT, doesn’t see HSDPA as a direct WiBro competitor. The 3G operators, he says, are primarily pursuing a voice-centric device strategy and most of the HSDPA subscriber growth is coming from current 2G and 3G users who have been tempted to upgrade to new devices by high subsidies.

“There’s not much change in the total number of mobile voice subscribers and pure market growth is negligible,” he says. “The mobile broadband data market, however, is a totally different story. This is a newly emerging market and most of the WiBro subscribers are new data service users who didn’t switch from other alternate services. The increase of WiBro subscribers implies almost pure and new market growth.”

The introduction of discounted bundled service packages that leverage KT’s strong fixed broadband presence and mobile operation (it has a 53 percent stake in mobile operator KTF) – as well as the rollout of Wave 2 equipment – should also boost WiBro’s prospects. While Wave 1 Wibro equipment can offer 19Mbps per base station sector, Wave 2 nearly doubles that performance level.

If WiBro fails to make significant inroads into the market, say. over the next 12 to 18 months, then it might be an appropriate time to give the technology the thumbs down. But to do so now, just as the pieces appear to be falling into place to secure WiBro growth, seems grotesquely premature.


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