KTF's W-CDMA push creates two-front mobile war

27 Apr 2007

The Korean mobile market is set for dramatic change as its second largest mobile operator, KTF, launches a fierce assault on the market dominance of SKT by reinventing and rebranding itself as a W-CDMA operator.

A new frontline in the mobile battlefield was opened March 1 when KTF launched what it called the world's first nationwide HSDPA network with 99% population coverage and declared March 1 as 'revolution in communications day'.

The company rolled out HSDPA in just 17 months and spent 700 billion won ($755 million) in 2006 alone, and says its HSDPA coverage is now better than its CDMA coverage. At the same time, the company is rebranding itself as Korea's leading W-CDMA operator and heavily promoting its new service portfolio under the name SHOW, which emphasizes the superiority of W-CDMA offerings over CDMA offerings and features a number of incentives for Korean people to buy its SBSM (Single Band Single Mode) W-CDMA phones.

Korean press reports say KTF will overtake SKT in terms of W-CDMA subscribers in April, but the numbers are still only in low hundreds of thousand. KTF has a minimum target of 1.8 million W-CDMA subs by year end.

SKT has responded by hurriedly expanding its own HSDPA network even though it will be unable to offer SBSM handsets until May at the earliest. Until then, subscribers will only be able to utilize HSDPA on DBDM (dual-band dual-mode) handsets.

As the commercial pioneers of CDMA in the 1990s, Korean operators have been facing a dilemma regarding W-CDMA and the huge cost of committing to both CDMA and W-CDMA. Until now the economical solution devised by SKT and KTF had been to offer W-CDMA services using DBDM handsets, which actually used the CDMA networks outside major population centers.

As the giants fight the battle for W-CDMA market leadership, LG Telecom, the country's struggling third operator has found itself with a chance to possibly increase its market share by promoting itself as the only CDMA operator to offer EV-DO Rev A. Last year it announced plans for the upgrade by the end of June 2007, but has made no further announcements. The upgrade would mean that SKT would have to wage war on two fronts to defend its number one position in the market.

Meanwhile, KTF is also pouring resources into offering HSUPA services and HSUPA handsets this year to make the high-speed mobile multimedia experience available for uploading as well as downloading.

According to the Ministry of Information and Communication, the growth in W-CDMA/HSDPA services will create 8 trillion won (5.3 trillion won in revenues and 2.7 trillion won in value-added services) worth of business for Korea by 2010.

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