Web 2.0 Asia

Maeil Business News (link in Korean) reports that Samsung Electronics has been selected as the mobile Wimax equipment provider for UQ Communications, a Japanese mobile broadband service company that's related to Japan's #2 wireless carrier KDDI.

Samsung is also providing mobile Wimax equipment and technologies to Sprint Nextel of the US. Samsung, along with Intel, has been extensively involved with mobile Wimax technologies.

It's expected that mobile Wimax service will be deployed in Japan in 2009, but the service will likely face a tough competition with other high-speed mobile internet standards like "Super 3G" from Docomo, the top dog.

In Korea, mobile Wimax (called "Wibro" here) is struggling to have a market presence. Wibro users are far outnumbered by HSDPA users in Korea. With the recent rise of LTE (Long-term Evolution) as the possible de facto standard for All-IP 4G, mobile Wimax (or Wibro) might find itself in a difficult position, stuck between HSDPA and LTE.

This morning, I got an email from our company's PR chief on her morning schedule. She said in the email, "This email is being writting in taxi - I just love Wibro."

It's one thing to see Wibro on news etc, and it's another to see it in action in your everyday life. Our PR chief is tech savvy enough to have been doing the PR work for tech companies for over 10 years, but she isn't exactly a gadget-phile type who checks out Engadget several times a day. It means Wibro just might be entering into the early majority stage in Korea.

But in terms of stats, Wibro looks far from being a smash hit, at least not yet - Wibro devices are far outnumbered by 3G mobile handsets, for example.

Naver News reports that Nokia and Cisco are jumping on the Wibro bandwagon. The list of industry giants behind Wibro now includes Intel, Samsung, Motorola, Nokia, and Cisco.

Wibro, or mobile WiMax, allows high-speed internet connection on the go. Korean companies such as Samsung were heavily involved in the development and standardization of Wibro. Samsung et al hope Wibro will become a worldwide standard for mobile high-speed internet connection, so they can sell more Wibro-related devices and services.

The successful early deployment of CDMA networks in Korea helped Korean mobile phone makers such as Samsung and LG rise to become leaders in global market. Korean companies like Samsung expect Wibro to be another boon to their business.

Where does Wibro and HSDPA stand now in Korean market?

But Wibro is not having a spectacular success in Korea as yet, roughly a year after the commercial deployment. There are about 67,000 Wibro subscribers, versus 4.5M HSDPA phone users, in Korea. Again, 4.5M is the # of HSDPA phone users - it might not equal to the number of HSDPA data services users. Carriers often mandate HSDPA data service for several months, for those customers who buy HSDPA handsets on subsidy. If you count the number of people who can't live without HSDPA data service, the number should be significantly lower than 4.5M.

So, what do average Korean people have to say about the mobile internet service? There have been lots of expectations torwards Wibro but there are few actual users at least for now. HSDPA is reliable and fast, but also expensive (about $45 per month) and limited (only up to 4GB is covered by the $45). Looks like people are still pretty much satisfied with the good old fixed broadband internet and, when they have to go mobile, the $13-per-month Nespot nationwide Wifi service is pretty much as fast and ubiquitous as the new technologies promise to be.

Photo from KT Wibro

The word "convergence" means there will be a battle between the two worlds over the wireless broadband internet market : That is, between the fixed internet service providers (e.g. Comcast) and the wireless carriers (e.g. Vodafone). And this battle is taking place right here in Korea.

It's an open secret that Wibro, despite all the hypes, is struggling. It's only had a few thousand subscribers so far. The biggest problems have been insufficient coverage and devices. HSDPA seems to be having a more successful rollout. The "T-login" service from SK Telecom seems to be doing all right.

Here is the summary of the price plans of Wibro and HSDPA (I've done the Excel job with the original data from K-mobile news). As shown here, Wibro has advantage in terms of additional packet fees. HSDPA, with the "D" in its name meaning "download", doesn't offer a very fast upload speed; But this problem will be addressed with the upcoming (July this year) HSUPA service.

As mentioned, the "Wibro vs. HSDPA, Round 1" has been won by HSDPA, in the Korean market. But Wibro is putting itself together for a comeback. Wibro is now trying to attack the enemy's weak spot, namely the not-so-fast upload speed. As part of that effort, Wibro is striking deals with UGC (user-generated content) partners, hoping users will upload their rich media content from mobile devices over Wibro. But I think Wibro has a bigger fish to fry than signing deals with content partners: It's gotta get a lot more subscribers than just a few thousdands!

SK Telecom, the #1 mobile service operator of Korea, launched HSDPA service the other day. KTF (#2) will launch its own HSDPA service next month.

HSDPA (Definition) is called 3.5 G service. To give a 101 on the evolution of mobile services for those who haven't really followed with all these geeky jargons:

• GSM (assuming most users would still be using this) is 2G.
• GPRS is 2.5G.
• W-CDMA (UMTS) is 3G. So from 3G, there's no clear line between GSM and CDMA : All converge to W-CDMA.
• HSDPA is 3.5G.

4G is called all-IP network which means all competing standards will merge together: Wifi, Wimax, DMB, HSDPA, and so on.

For CDMA market (some part of US, Brazil, China, Korea, and India) the counting is different: CDMA is 2G, CDMA 2000 is 2.5G.

What makes the story a bit confusing is the "CDMA 2000 1x EVDO". Although 3G is W-CDMA, the CDMA guys have sometimes called CDMA 2000 1x EVDO a 3G service as well, presumably out of marketing purposes. Although EV-DO provided theoretical maximum download speed that could match that of W-CDMA, that was theoretical maximum speed, not a real one. So, EV-DO was not and is not a 3G service.

Interestingly, that means Korean mobile market essentially "skipped" the 3G. Yes, folks, although you thought Korea was a leading 3G country, Korea in fact had a faster side of 2.5G (EV-DO), and now we are heading directly into 3.5G (HSDPA).

Meanwhile, KT (Formally called Korea Telecom) will launch Wibro service (similar to Wimax, but the Wibro vs. Wimax debate seems to be hot) next month in Korean market.

You can pretty much think of Wibro as Wi-fi, but with mobile accessibility. When you are on the move, your hotspot antenna also runs with you (I know this is terrible description of technology but at least it helps people grasp the concept more easily.)

You can imagine all sorts of fantastic things you will be able to do with Wibro network + supporting devices (a UMPC or a mobile phone). Ubiquitous internet, finally here with us.

So, between HSDPA and Wibro, which will reach the critical mass of initial subscribers first? Korea is a broadband nation, so selling Wibro plan bundled with fixed broadband makes sense and such practice may bring KT a significant initial user base quite rapidly. On the other hand, SK Telecom and KTF are marketing genius: When they want to sell something, they sell something.

But what's much more likely is these two seemingly competing standards will get mingled together to provide maximum user value. So it will be interesting to watch Korean market in '06 when these two standards get deployed in similar time frame.

Some web folks might ask, why do all these mobile interenet technologies matter to me? They matter because, as Charlie Schick puts, "There are more mobile phones than PCs, there are more Net-connected phones than PCs, and the scale of mobile phones means that a few companies (maybe one or two) touch almost all of the mobile phone users in the world in a more personal way than Microsoft, Intel, or even Dell do."