Last December in 2006, SK Telecom, one of the leading Korean mobile carriers, announced that it would invest $125.8 million dollars for the expansion of its WiBro service in 2007. WiBro, Wireless Broadband, is a portable internet service, which provides a high data rate wireless internet access by using a 2.3 GHz bandwidth with PSS (Personal Subscriber Station) under the stationary or mobile environment, anytime and anywhere. According to the SK Telecom., the investment will be mainly used for two categories. One is relating to the expansion of its WiBro service from Seoul to 20 other cities in Korea. Another one is for subway stations in Seoul. In fact, the SK Telecom and KT, which is the largest fixed-line and broadband operator in Korea, agreed to deploy the subway base stations in a joint venture in 2006. With its network expansion, SK also plans to expand the services available for WiBro. SK announced last year that 30 new games will be available to its mobile users, and the same games will be available to WiBro subscribers in 2007. In addition, the company also announced that it has made an agreement with Google to develop a search engine for its mobile and WiBro services.
Business Strategies
Currently, SK Telecom is trying to figure out the right business strategies for its WiBro Services. According to SK Telecom, they are focusing on young customers in their teens through their thirties who are active and use the Internet intensively. In addition, the company is targeting customers that depend highly on groupware and portable PCs, such as finance and insurance firms for the business sector.
SK Telecom also plans to improve customer convenience and facilitate the WiBro service by developing new products that combine WiBro with existing relative services, such as CDMA and DMB (a television service with additional audio and data services that can be viewed on DMB cell phones, vehicle DMB, or portable DMB receivers). The company believes that popular combined services can ensure continuity of the WiBro service.
To facilitate the WiBro service and to help the price sensitive users, SK Telecom keeps the price for the service at a moderate level; so many users can enjoy the service by paying some amount of money which depends on a usage based charging system.
SK Telecom’s business strategy can be summarized as leading the new WiBro market by timely investments in complementary services, such as HSDPA (High Speed Downlink Packet Access) which is a 3G mobile telephony protocol, providing a smooth evolutionary network path for higher data transfer speeds and DMB. In other words, it will redirect some portion of high capacity data service to WiBro while investing in HSDPA as its main product. In addition, because setting a moderate the service rate can be an essential factor in the success of the service, SK Telecom is considering a variety of rate systems to give satisfaction to the subscribers.
Reference:
1. WiMAX Day. “SK Telecom announces $125 million investment in WiBro”
Internet: http://www.wimaxday.net/site/2006/12/01/sk-telecom-announces-125-million-investment-in-wibro/, December 1, 2006 [Feb. 15, 2007]
2. IT Korea Journal. “World’s First ‘WiBro’ Service Launched”
Internet: http://www.rfhic.com/htm/bbs_images/Pre-WIMAX%20service%20introduction%20in%20Korea.pdf, July ~ August, 2006 [Feb. 15, 2007]
3. Wikipedia. “Definition of HSDPA”
Internet: http://en.wikipedia.org/wiki/HSDPA, [Feb. 15, 2007]
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