Pyrhhic Victory for SK in Korean Bandwidth Auction?

In the words of a headline in The Korea Times, SK Telecom won a Pyrhhic Victory in the recently concluded bandwith auction here. For SKT, winning is bittersweet, the article reported, since it has to pay an enormous amount after repeated rounds of proposals and counterproposals with some describing it a “Pyrrhic victory.” The final bid by SK Telecom amounted to 995 billion won.
Opting to concentrate on cloud computing instead, KT declined to continue bidding for the 1.8 gigahertz (GHz) band.
“We decided to stop bidding for the 1.8 GHz bandwidth, to prevent social controversy and national loss following excessive competition in an auction that was held for the first time in the country,” KT said.
As noted by the Joongang Daily,The 1.8-GHz band is thought to be the most suitable for fourth-generation (4G) mobile communications technology. Many mobile carriers in Europe, the United States and Asia have chosen it for their 4G mobile telecommunication services. It can process data much faster than the 3G service, and thus carry out more tasks such as playing full high-definition content.
Both of the telecom giants were determined to clinch the band since the auction began on Aug. 17. As a result, the auction dragged on for nine days and 83 rounds, and the bidding price soared to 995 billion won ($919 million), more than double the minimum bidding price of 445.5 billion won set by the KCC.
The KCC, which ran the auction, did not place a limit on how many rounds could take place, nor how high the bidding price could go.
Finally KT backed off. When the auction resumed yesterday morning, KT bid for the 800-megahertz (MHz) band, and as the sole bidder, the company got it for the minimum bid price of 261 billion won.
“We withdrew from further bidding for the 1.8-GHz band in light of the social controversy about the overheated competition and national loss,” KT CEO Lee Suk-chae told reporters. “I thought if I use more than one trillion won on spectrum, KT won’t be able to do more important things.”

Naver Halts Mobile Baseball Broadcasting

The local media are reporting on an interesting example of the limits of mobile data networks in Korea.  As reported in The Korea Times, Naver has called an abrupt halt to mobile broadcasting of professional baseball games over 3G networks.
The country’s top portal stopped providing a mobile baseball broadcasting service through the 3G network only 40 days after its launch.
It says it halted the service as it didn’t want to offer poor quality viewing, but it evidently lacked proper preparation.
Following an agreement with the Korea Baseball Organization, Naver started broadcasting games from July 6, citing growing demand among baseball fans who didn’t want to miss any games on their way home from work.
The service immediately drew fans, with as many as 20,000 users logging on to the service using their smartphones or tablets at the same time only two weeks after launching.
“There was growing consumer complaints as the streaming often stopped. We determined that we had better stop it to offer better quality service,” a representative for Naver said.
The top portal, however, can’t be free from criticism that it launched the service too hastily. At the time there was concern that the mobile broadcasting would weigh too much on a 3G network already suffering huge traffic.
When watching a baseball game of about three hours on a smartphone, it incurs 700 megabytes of data traffic. Since as many as 20,000 people were watching a game simultaneously, the burden on the network was debilitating.

Smartphones Alienate the Elderly in Korea

I read with interest a short article in the Joongang Ilbo today, proclaiming in his headline that "Smartphones Alienate the Elderly."   The article notes that smartphones are eating up an increasingly bigger chunk of the Korean market, but are still proving too finicky or complex for senior citizens and people with disabilities.
It goes on to observe that the smartphones’ versatility can be too confusing for elderly people due to the bewildering number of applications, while the small displays and touch-screen typing can also be difficult to navigate, said Nam Si-uk, a professor at Sejong University.
“Many elderly men who originally wanted to own a smartphone are now changing their mind because the instruction manuals are too complicated,” he said. “It makes them feel inferior and frustrated.”  Click on the graphic, which accompanied the Joongang Ilbo article, to see a full size version.

Digital Development in Korea(한국 디지털 발전사) Reviewed in The Electronics Newspaper

I was pleased to learn this past week that my recent book with Dr. Myung Oh, Digital Development in Korea:  Building an Information Society, has been reviewed by Korea's Electronics Newspaper (전자신문). Dr. Oh and I substantially finished the manuscript and delivered it to Routledge in London  in early August 2010.
Readers interested in the newspaper's Korean language overview of the book can find it here in the "Books Closeup" section.

Bidding War Over Mobile Frequencies in Korea Continues

The Joongang Daily reports that the continued bidding war for use of mobile frequencies in Korea is beginning to worry some experts.
Market watchers are concerned that a bidding war between the nation’s two largest telecom firms over an important mobile frequency band could end up hurting the winner down the road.
On auction since Wednesday have been slots for three mobile frequency bands: 2.1-gigahertz (GHz) band, 1.8 GHz band and 800 MHz band. The Korea Communications Commission (KCC) - the country’s telecommunications regulator - is running the auctions.
The bands are like roads for voice calls, text messages and data applications. They are finite public property, managed by the government and rented to mobile service operators on 10- and 15-year contracts. Securing vital spectrum slots are crucial to meeting surging data demand from smartphone and tablet PC users.
Previously the government had allocated the bands, but this year it decided to auction them off to the highest bidder.
It is the space on the 1.8 GHz band that market watchers are keeping their eyes on. The bidding war has already gone through 21 rounds and the price has risen from 445.5 billion won to 543.7 billion won.
“We cannot let our enemies have ‘the best weapon’ without a fight,” an SK Telecom official said.
Market watchers say the final price could be up to three times the opening bid and that worries financial experts. They point to cases in Europe, which held spectrum auctions between 2000 and 2001 that ended up burdening telecom firms and making them less competitive.