[korea times] There's no question that an assertive government had an integral role in the ascendance of South Korea's information and communication industry. However, with the growth rates slowing in a saturated market and no compelling new technologies in the pipelines to generate real excitement, telecommunications companies are now griping louder against the heavy-handed policy approach.
The Korea Communications Commission (KCC), the country's converged regulator for broadcasting and telecommunications, is currently working with telephone, wireless and Internet operators to establish a new regulatory framework for the ``all-IP (Internet protocol) era.''
The integration of various telecom networks into IP networks is bringing considerable changes in services and commercial models and the companies agree that the rewriting of game rules is inevitable. The problem is that everybody seems to have a different idea about what should be included in the new rulebook.
In a public hearing last week, the state-run Korea Information Society Development Institute (KISDI), which acts as a policy research arm of the KCC, announced a report that hinted at the direction of future policies for the transition toward the all-IP environment.
Upgrading telecommunications networks, streamlining regulations that previously covered different markets, fostering alternative technologies, such as WiBro and Internet telephony, and developing new applications and content were identified as the key points.
Policymakers are also considering ways to use the advancement in networks and technologies to lower the entry barrier for new companies looking to scale the telecommunications industry.
The KISDI report suggests the government should require telecommunications operators to improve the openness of their fixed-line and wireless networks and introduce mobile virtual network operator (MVNO) policies, which allow companies to provide wireless services on a borrowed spectrum.
And the broadband Internet should be listed as a ``universal service,'' KISDI said, which mandates Internet service providers to make broadband access available to all citizens who want them, regardless of where they live.
``The discussions about the consolidation of broadcasting and telecommunications existed five or six years ago, but right now we have come to a point where we can truly use and talk about the word `convergence,''' said Yeom Yong-sub, who heads the broadcasting and telecommunications policy research team at KISDI.
``Telecommunications policies should be more than just about controlling networks, but also considerate about the whole industrial environment. Until now, we had too much focus on the industrial side of things, such as having different rules for public switched telephone network (PSTN) and voice over Internet protocol (VoIP), and we should now be thinking more about technology neutrality.
``We need to set new rules for competition as the boundaries between industries dissolve and companies previously separated coming to blows in the expanded market. Having the right framework for competition would be crucial in inducing companies to increase their equipment investment and make the transition toward all-IP and fourth generation (4G) communications.''
`Why Bro?'
While telecommunications companies can't argue with the big picture, they are also making it clear that they don't want to be pressured any further to commit lavish investments into unproven technologies and services.
Once again, the complaints center around WiBro, the country's homegrown wireless technology that has so far failed to live up to its pre-launch hype as the usher of the mobile Internet era.
Government officials have claimed that upping the popularity of WiBro, and thus providing a competing technology to third generation (3G) communications, is crucial for the advancement in wireless networks and facilitating competition across different networks.
However, the problem is that the country's two WiBro operators, KT and SK Telecom, also happen to be the biggest backers of 3G. And it seems that cable television operators, interested in getting a slice of the telecommunications market, seem to prefer providing wireless services as MVNOs, and wouldn't touch WiBro with a barge pole.
KT and SK Telecom combine for just 170,000 WiBro customers, who have so far generated around 25 billion won in revenue for them. This makes a mockery of government predictions that had 1.4 million subscribers and 290 billion won in sales by 2008.
In one of the most wired countries on the planet, where 3G is quickly becoming conventional, WiBro is pretty much being rendered irrelevant.
KT, the country's biggest telephone company and Internet provider, has spent more than 730 billion won (about $580 million) on its WiBro business since the commercial launch in 2006. SK Telecom, the mobile telephony king, invested 620 billion won during the same period.
Should the companies slow their investment in WiBro, Yeom suggests that the government should require them to open the networks through MVNO policies and have other companies come in and spur the competition. Naturally, KT and SK Telecom aren't too delighted about the idea.
``We all know that the country's advancement in 2G and 3G services is depriving WiBro of the room for growth. The value of WiBro is low, and allowing MVNOs isn't an issue that should be treated lightly,'' said KT Vice President Park Dae-su.
Ha Seong-ho, a SK Telecom vice president, claimed that the government should provide incentives to the operators investing in WiBro and other networks in order to reduce their risks.
``If we completely eliminate the differentiations between network operators and resellers, the rights and responsibilities between the companies that actually invested in the networks and those who only use them become obscure too,'' said Ha.
KT and SK Telecom are also uneasy about broadband Internet being labeled as a basic service, since they would be the ones who will finance the providing of universal access.
WiBro is designed as a predecessor to mobile WiMAX, which is competing with Long Term Evolution (LTE) in the fourth-generation (4G) standards race.
The government has been promoting WiBro aggressively in the hope of allowing local companies to drive the standard and capture the benefits of homegrown intellectual property.
However, WiBro's struggles certainly wouldn't bide well for WiMAX in its standards wars with LTE, and now the hands seem ready to bail, at least on the domestic front.
``WiBro can't be successful here, but that doesn't mean that the technology can't be relevant elsewhere,'' said a senior KCC official, who didn't want to be named, hinting that policymakers could opt for handling WiBro as an export-specific technology.
``We are already exporting WiBro to Uzbekistan and Jordan, and we think there will be an opportunity in the United States too, with the Obama government looking to expand the country's broadband network. We hope WiBro becomes good enough to be the technology equivalent of Ballantine's 30 Year Old Whisky ― you hardly see the Scots drinking them, but they are available everywhere in the world.''
Korea currently has a mobile penetration rate of 94 percent and a household broadband penetration rate of 93 percent, according to the KISDI report, and keeping growth alive in the telecommunications industry is proving to be a tough challenge.
Shin Yong-seob, the director of KCC, said that the KISDI report will be reflected into the long-term policy plans for the telecommunications industry that will be announced later this year.
``The discussions we had today will be taken seriously,'' he said.
Telecom Firms, Government Differ Over Growth Policies
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