HSDPA (High-Speed Downlink Packet Access) subscribers will account for 7.4 percent of South Korea's mobile phone market in 2007, and over one-third of the country's mobile subscribers will be on the 3.5G network by 2011, says IDC.
According to a recent IDC study, the HSDPA usage rate is forecasted to jump drastically to 14 percent in 2008, 20.5 percent in 2009, and finally reach 32.6 percent by 2011, which will correspond to about 14.92 million users. Though the sales rate of HSDPA devices merely amounted to 0.2 percent in 2006, it is projected to rise to 38.8 percent by 2011.
IDC said it also expects HSDPA networks to be upgraded to HSUPA (High-Speed Uplink Packet Access) by the end of the year. Delivering data at speeds of up to 5.76 Mbps, HSUPA will signify a dramatic improvement over HSDPA, whose speed currently peaks at 384 Kbps.
The report noted that universal subscriber identification module chips (USIM), will play a pivotal role in the development of HSDPA in the country. USIM chips, which store mobile communication information as well as personal data, are installed in mobile phones. Under the Korean Ministry of Information and Communication's (MIC) current regulations, USIMs inside mobile devices have to be locked by the mobile operators.
But the ministry has stated that it is making efforts to unlock the USIM chips for the purpose of achieving complete openness, adding that it plans to unlock USIM chips on all HSDPA- and HSUPA-enabled mobile phones by 2008. To achieve this, the Ministry says it will set up a USIM team, which will include business and consumer organizations. Achieving USIM openness is expected to expand the market presence of HSDPA.
Five million Korean WiBro subscribers by 2011?Meanwhile, Korea Telecom, a company backing the WiBro wireless technology, is scheduled to build WiBro Version 2, a network that supports an upload speed of 8Mbps and a download speed of 34.6Mbps.
WiBro is expected to acquire 130,000 Korean subscribers by 2007, and IDC predicts the number to swell to 600,000 in 2008, 1.4 million in 2009, and finally 3.9 million in 2011. At that point, the difference in the number of subscriber between WiBro and HSDPA is expected to be only marginal.
According to IDC, WiBro's assessed rate of growth stems partly from the conservative investment and marketing strategies that WiBro companies such as KT and SK Telecom employ, as a result of their lack of confidence in the prospects of this business. However, should the market become more favorable after the introduction of killer applications and popular terminals, IDC said it predicts WiBro-related investment and marketing to grow.
Taking into account KT's plans to "aggressively" build infrastructures, IDC added that the number of WiBro subscribers could reach 800,000 by 2008 and 5 million by 2011.
IDC's report also predicts that WiBro and HSDPA will remain as complementary rather than as competitive technologies. This is because HSDPA is better than the WiBro with regard to mobility and accessibility, while the latter is better for data transmission purposes.
According to Han In-Kyu, a senior researcher at IDC Korea, price will be the most important factor in deciding the success of the respective technologies because communication costs per household are increasing.
"As mobile phone Internet service is provided in package plans, service providers should consider offering (partial) fixed-price plans to lower the cost for households," Han suggested in a statement.
Han added that to develop profitable services, cooperation between various content and terminal (equipment) providers must also be strengthened.
He also pointed out that although mobile shopping and lectures have been tested, the lack of appropriate killer applications has hampered their success. This, according to him, is a problem that must be addressed as soon as possible.
Byung-Min Oh of ZDNet Korea reported from Seoul.
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