With Korean telecommunications regulators allowing mobile VoIP, or voice-over-Internet protocol, and imposing an identifier number on Wireless Broadband (WiBro) services like mobile phones, WiBro operators are now able to compete with current mobile service providers, including SK Telecom, KTF and LG Telecom.
The Korea Communication Committee (KCC), in allowing voice communication service, expects WiBro subscribers to increase to 1 million by 2011. Wibro operators, KT and SK Telecom, secured only 190,000 subscribers over two years after its first commercial service was launched in June 2006. Futhermore, mobile VoIP service will trigger a lowering of telecom service charges and fierce competition among telecom service providers, the KCC said. Emerging the mobile VoIP service will help push down the cost of making a phone call by 30 percent, the watchdog group estimated.
Technically, it seems that there are no obstacles. KT, a leading WiBro service provider, has already developed 'Voice Call Continuity,' technology handed from WiBro to CDMA that supports seamless telecom service even outside of WiBro network coverage areas.
However, market watchers are not agreed with KCC's rosy expectations. "To provide voice communicationss service through WiBro, a service provider should invest more than double its CAPEX (capital expenditure). Reaching the mobile penentration ratio of 93 percent, WiBro providers are not easily securing new subscribers," Jong-in, Yang, a financial analyst with Korea Investment & Securities, said in a recent report. "Expanding its WiBro service to secure more subscribers may cause KT may cannibalize its subsidiary KTF's mobile business revenue," Mr. Yang added.
The other WiBro operator SK Telecom is keeping its stance the WiBro service is a complementary good rather than a competitive good for 3G mobile service.
The third WiBro operator may be a variable factor. The KCC said it will issue one more license for WiBro business soon. Owing to low license fee, newcomers can provide mobile voice and data service for one-tenth of the initial investment compared with 3G operators, SK Telecom, and KTF.
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