A cellular network using Code Division Multiple Access technology is live in South Korea, but so far enduring only a lukewarm reception. Current analog operator Korea Mobile Telecommunications Corp. introduced CDMA service Jan. 1 in Inchon, a port city west of Seoul, and plans to open the network in Pusan and Seoul this spring.
“There’s no noise at all,” said Ahn Kun Young at the Korean Ministry of Information and Communication, referring to his experience using the new CDMA digital service. Ahn is the Ministry’s deputy director of international cooperation, United States and Europe.
KMT’s airtime rate for CDMA is about equal to analog cellular, at about 24 cents per minute, reported Ahn. Monthly service charges range between $25 and $30. However, handset costs for CDMA are high, reported Paing-Sup “P.S.” Kim, a commercial specialist at the U.S. Embassy in Seoul. Priced between $760 and $1,000, the dual-mode (analog and digital) handsets have been slow to attract subscribers, P.S. said. Current analog phones cost about half the amount, he added.
The success of CDMA in Korea has been affected also by a delay in phone production, caused by a shortage of chips that are supplied exclusively by San Diego-based Qualcomm Inc., said P.S.
KMT is expected to begin CDMA service in Seoul as early as March, and one source expects coverage to extend throughout South Korea by year’s end.
Digital rival-to-be Shinsegi Telecommunications Inc. plans to begin CDMA service by mid-year, said AirTouch Communications Inc. spokeswoman Susan Rosenberg. AirTouch holds a 10.7 percent interest and is the lead technical partner in Shinsegi.
Both Shinsegi and Korea Mobile have exceeded initial projections for opening their networks. Rosenberg said Shinsegi intended to start CDMA service last month, but equipment delays have slowed plans. Korea-based Samsung is producing equipment for the consortium. Rosenberg said the government indicated both Shinsegi and KMT must employ a Korea-based manufacturer.
Ahn reported KMT’s CDMA switches, base stations and terminals are produced chiefly by Lucky Goldstar Information & Communication, an equipment subsidiary of the Korean Lucky Goldstar conglomerate. Hyundai Electronics also is supplying some equipment, Ahn added.
However, Barbara Burgess, media relations manager for AT&T Network Systems, said AT&T signed a five-year agreement with KMT to supply infrastructure equipment, including its Autoplex system, for both CDMA and analog operations. AT&T valued the contract at $540 million.
“KMT has been pretty quiet about their plans,” said Perry LaForge, executive director of the CDMA Development Group, about KMT’s network preparation.
Ahn said KMT purchased its backbone CDMA technology from Qualcomm, and subsequent co-development between the two companies has reduced the royalty payments required of KMT.
Bringing CDMA to life is a triumph for both KMT and Qualcomm, as successive delays to market in the United States and abroad have infused some doubt about the technology. CDMA’s activation was a necessary victory in Korea, as KMT pushes maximum capacity on its analog frequencies. As KMT waited for CDMA to come online, the operator sought more analog bandwidth. However, the government denied that request, said George Hoffman, branch director of the Yankee Group in Tokyo.
KMT claims more than 1.6 million analog cellular subscribers, which equates to about 4 percent penetration for South Korea’s population of 45 million.
KMT is a privately owned company, a spinoff from the Korea Telecommunications Authority, or KT, where it was established as the subsidiary for providing analog cellular service.
Hen Suh Park, representative director of AirTouch Korea, said KMT’s largest shareholders are Sunkyong, a Korean conglomerate with about 21.2 percent, and KT, with 20 percent. KT, which started as a wholly owned government operation, currently is soliciting private investors.
Pohang Iron & Steel Co. of Korea and Korean textile manufacturer Kolon each hold about 14 or 15 percent interest in Shinsegi. Other U.S. partners include SBC Communications Inc., with about 8 percent, and Qualcomm, with about 2 percent. Remaining shares are held by a number of Korean companies.
P.S. reported Korea plans to issue about 30 or more licenses in seven telecommunications areas by the end of June. The fields include international telephone, personal communications services, trunked radio, second generation cordless telephone, paging, wireless data and leased line facility rental services.
The government plans to address specific licensing and technology standards issues for the new services following the general election of national assembly members, scheduled for April, said P.S.
