4G Now

WiBro at the Crossroads

WiBro is the made-in-Korea technology for portable Internet. It allows people to use wireless Internet without disruption in a vehicle running 120km/h.
 
WiBro attracted special attention as it was developed by home-grown technologies following CDMA service. After two years of service, however, the results are rather shameful. There are only two service providers, KT and SK Telecom, after Hanaro Telecom unprecedentedly decided to give back the service license awarded by the government. Moreover, SK Telecom is not that enthusiastic about the service for fear that WiBro would have negative impact on its mobile service. KT is no different. It has subscribed less than 200,000 people to the service.

Against this background, the government decided to allow WiBro service providers to offer voice services. The government decision is seen to encourage KT and SK Telecom to increase investment, instead of being marketing-obsessed.
 
WiBro offering voice service means that there will be competition between WiBro and existing mobile services. Already, KT successfully demonstrated WiBro based Internet phone service. The company can provide the voice service anytime upon the government approval.
 
In case that WiBro based Internet phone proliferates, the landscape in the industry will be changed forever because it offers short, long distance, as well as international calls at far cheaper prices.
 
Of course, WiBro coverage should be expanded first and not small amount of money is required to establish infrastructure to make it happen.
 
At least, SK Telecom would be obviously not in favor of the situation. It might think that WiBro-based Internet phone is a critical blow to its profits. It would do everything it can do to prevent it.  
 
One of the arguments of SK Telecom is that allowing WiBro Internet phone is unfair because it paid astronomical amount of money to get the frequency band it now uses while WiBro providers are provided with the frequency at a tenth of the amount SK Telecom paid, or 100 billion won. 
 
KT also has its reason to oppose WiBro Internet phone, though it is a little bit complex. WiBro voice service might be good for KT because KT picked up WiBro as one of its new engine for growth. At the same time, however, the service can reduce the sales of KTF, its mobile service affiliate. Therefore, KT is in catch 22 especially at a time when it takes steps to merge KTF.
 
Another factor is the speculation that WiBro would fail to mainstream in the global market. Though it is likely to be selected as one of 4G standards, it lags behind Europe-led LTE (Long Term Evolution) system. Many of major mobile operators around the world had selected LTE as their next service platform.

Quality is More Important than Marketing for KT WiBro

KT, South Korea's WiBro service provider, is doing aggressive marketing in an attempt to have as many opportunities to meet potential customers as possible and thereby to become more approachable to them. For example, KT receives subscribers' applications at E-Mart, one of the largest retail chains in Korea and provides customers with a wide range of choices by introducing pre-paid plans.

Forging alliances with notebook manufacturers such as Asus, Kohjinsha and Pixel Lab Korea for joint promotion, the operator is now turning its eyes beyond the border. For travelers visiting Korea via Haneda Airport, the company provides WiBro rental service.   
"The opening of the rental counter at Haneda will help foreigners visiting Korea have easier access to WiBro," KT says.

The strong marketing drive is the preparation for the enlargement of service coverage to 19 cities near Seoul in October. The company wants to attract customers' attention in advance. 

A broader coverage is great, but it can not be the very solution to imminent problems that KT WiBro is faced with.

The coverage is still limited and the network quality is extremely poor. Complaints about service disruption and complicated process of service cancellation are ceaseless.

KT has about 180,000 WiBro subscribers and aims to reach 400,000 by the yearend, which seems to be unattainable. The telecom operator should realize much hype without quality improvement will get it nowhere.

Home 3G/WiBro base stations: Where Shannon meets Isenberg

These are difficult times for mobile operators. After years of glamour and growth, stocks are being re-rated as utilities. Many markets are saturated, penetration is above 100 percent, and competition is increasing.

To complicate things, Universal Mobile Access (UMA), Fixed Mobile Convergence (FMC) and Voice-over-WiFi (wireless VoIP) create competitive advantages for everyone. BT’s Fusion product combines Bluetooth® capabilities and UMA, which means that competitors do not need to own a license—yet another cost advantage. Indeed, it is no coincidence that British Telecom, with strong broadband presence but no spectrum, is the first to offer such a service.

Rubbing salt in the wound, 3G and WiBro (Wireless Broadband)—supposedly the saviour of carriers—do not actually work that well indoors. That is to say, the combination of high frequencies (2.1), high data rates (16QAM), long ranges, and attenuation from walls is not a good mix. Of course, this isn’t just a problem for 3G. Everyone knows WiFi has poor propagation characteristics, making home networks inaccessible from the living room. At a higher frequency and faster rates, WiBro will be even more negatively affected than 3G.

However, there is hope on the horizon: Femtocells could shift the advantage back to spectrum owners. A femtocell is a simple 3G home base station; a box similar to a WiFi access point connects to broadband, but instead of using wireless VoIP or UMA, the radio uses 3G signals to connect to any standard handset. For consumers, this has all the advantages of UMA or wireless VoIP plus it allows them to use any handset instead of requiring a dual-mode handset that is expense and has a terrible battery life. Customers use their standard mobile phones with all of their numbers programmed into it. At home, calls are connected from their handset to the base station and then to the core over broadband. Those calls would be extremely cheap or even free.

Korea leads the world in broadband and advanced wireless, as the deployment of WiBro shows, so it is no surprise that it is leading the way with femtocells too. The idea is increasingly recognized in the 3G community, but the same logic holds for WiBro, and—as the carrier most advanced in deploying WiBro—it is logical that KT would be the first to develop such a program for 802.16e. The WiBro femtocells program was announced this summer as a joint initiative between KT and the technology developer picoChip.

For an operator this counters a competitive threat, improves quality for subscribers, and delivers some genuine differentiation in a cost-effective manner. Offering attractive pricing to consumers using the femtocell in the home enables operators to promote a powerful tool in signing up entire households, thereby reducing churn. Further, carriers that deliver broadband as well can bundle services as a way to reduce churn and increase ARPU from both services.

Customers should also see marked improvements in service. Customers using macrocells have to SHOUT REALLY LOUD to blast signals through walls, causing noise for other users outside. Locating the base station inside the walls improves service indoors and helps minimize angry neighbors.

Such a situation is “Shannon meets Isenberg.” Isenberg famously predicted that intelligence moves to the edge, while Shannon’s law says that the key efficiency is improving the signal-to-noise ratio. What better way than to have base stations where they are needed—at the edge, with short distances, less attenuation, less interference, and hence higher data rates? This elegant ju-jitsu incorporates the advantages of FMC while using the strength back against it. Operators can use the ideas to take customers away from fixed-line competitors and reduce churn, increase ARPU, and improve coverage and customers’ experiences.

But, as always, every new opportunity has a few bumps in the road before becoming reality; this is no exception. Competitors face three major obstacles. The first, not surprisingly, is cost. This whole idea only works if the femtocell is cheap enough. Recently, a 3G macro base station was priced at $100,000; a domestic femtocell needs to be priced below $200 to be feasible. The latest processors make this realistic.

The second challenge is working with the radio network and managing interference. This must be completely automatic and plug-and-play because there is no way that carriers’ network planning could cope with hundreds of thousands of entities. The precise techniques for addressing this are sensitive, but a number of different approaches have already been developed.

The final challenge is actually the reverse problem: provisioning and integrating with the core. This too must be plug-and-play, with no network configuration. Some carriers envisage an integrated femtocell plus broadband gateway (like Orange’s Livebox), while others want an Ethernet modem using existing broadband connections. Although the latter is simpler and could be deployed more quickly, the integrated box would give better control of QoS, security, and provisioning. Most likely consumers will see both deployed; the goal is to be really straightforward for the customer to install and use.

These challenges are solvable. As wireless competition has become a tug of wars between price-wars or who has the prettier logo, it is encouraging to see that some carriers are looking to use technology innovation to drive better services. Whichever approach wins, consumers can be sure that the increased differentiation and competitive pressure will drive better services for us all.

Rupert Baines, VP Marketing of picoChip

This article appeared in Telecoms Korea Magazine Sep-Oct 2006 Issue

Sprint, KT and Samsung

The preparation for Sprint Nextel’s Mobile WiMAX project is making a bright start, drawing worldwide attention to its significance as a milestone of the Mobile WiMAX market in the world as well as in the US.

The preparatory work must have a lot to learn from the failure of KT, the world first WiBro service provider as of today.

After kicking off Mobile WIMAX in June 2006, KT is hesitating to expand the service, because the operator made false steps from the very beginning. Among others, the worst choice was its heavy dependence on Samsung. Just before the service launch, Samsung’s Mobile WiMAX handsets were found defective and KT had to start the service on PCMCIA cards without proper terminals.

Meanwhile, Sprint employed “multi-vendor” strategy rather than relying on a certain device maker. Originally, Sprint announced the launch of Mobile WiMAX project with Intel, Motorola and Samsung as major vendors, but Nokia and LG enlisted later. Accordingly, the project is open to four out of the Big Five cell phone makers excluding Sony Ericsson.

The multi-vendor system is expected to bring about more innovative and reliable outcomes by stimulating competition than depending on a single vendor, which is getting KT nowhere.

Mobile WiMAX Has Something Special that Others Don't

What makes Mobile WiMAX including WiBro stronger than others? Samsung Electronics introduces eight competitive edges that Mobile WiMAX has over existing technologies.

Compared to Fixed WiMAX, Mobile WiMAX supports wider range of devices and mobility, according to Hwan-Woo Chung, VP of Mobile WiMAX Group at Samsung. Besides PDA, Smartphone, PCACIA card and mobile router, the wireless broadband technology is also compatible with various mobile services such as data and voice roaming, LBS and mobile office.

In competition with HSDPA, dubbed 3.5G-service, the VP said, Mobile WiMAX will gain the upper hand with All IP-based, simple network architecture, low TCO, high throughput and fast connection time that will guarantee premium services.

Mobile WiMAX technology is also superior to Wi-Fi(802.11)in seamless hand-over, QoS, security and easy maintenance.

MBWA (802.20) is no match either, considering robust eco-system and advanced timing of Mobile WiMAX. A number of WiMAX Forum members and commercial and test services prove the technological edges of Mobile WiMAX, emphasized Samsung.

What's Wrong with Samsung WiBro

To strengthen its presence in the world WiBro (Mobile WiMAX) market, Samsung Electronics is providing devices and solutions for almost free, according to industry sources.

"Samsung is said to offer free WiBro solution to Sprint,” said a US industry source, “It is very convincing, because Samsung needs reference site.”

A high-ranking official from Intel also said, “Having reference sites is critical. If reference sites are obtainable, price is of no importance,” and added, “Even after landing in the US market, Samsung should open its technology to some extent to competitors such as Motorola participating in Sprint project. It is doubtful whether Samsung will be able to maintain technology prowess in WiBro for long.”

Against this backdrop, the world first WiBro technology that achieved “successful” commercial launch is not getting its price.

Even in Korea, where the world first WiBro commercial service was kicked off by KT, there is no decent WiBro device and the commercialization is only a good-looking show-off. The launch of PDA-type WiBro phone developed by Samsung was postponed due to technology problem of the handset maker, according to KT.

Samsung vs. Motorola: To vie for WiMAX leadership

Samsung has strived to create reliable demand in the unchartered mobile WiMAX market. And now, it’s got a company, Motorola. As an early starter, Samsung has been involved in many mobile WiMAX projects in countries around the world including Korea. However, being early doesn’t necessarily mean that the game is over as the market is yet to mature.

A bad news for Samsung is that Mobile WiMAX service(WiBro) in Korea, which was expected to become a reference site for the service, is in a deadlock at best. Moreover, Samsung failed to introduce a flagship phone for the service.

As Sprint Nextel chose to work with Samsung and Motorola for Mobile WiMAX service, Samsung is expected to play a major role in building the networks and supplying devices in early stage. Considering the U.S. is the home turf of Motorola, however, it would be a matter of time that Motorola takes a great leap forward.

Motorola’s recent announcement that it begins developing Mobile WiMAX chipset to supply it to Sprint and Japanese providers in 2008, might be the first step.

Although Samsung is one year ahead of Motorola, it should never fall into complacency because its technology is yet perfect.