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SAMSUNG'S WIBRO DEAL WITH U.S. TO LIFT S. KOREA'S MARKET GRIP
Wednesday August 9, 2006, 5:03 pm
SEOUL, Aug 9 Asia Pulse - Samsung Electronics Co.'s (KSE:005930) advance in the U.S. market with its own wireless Internet technology is expected to strengthen South Korea's grip on the burgeoning but high-potential communications market, experts said Wednesday.
Earlier in the day, Samsung Electronics and three other global business leaders -- Motorola Inc., Sprint Nextel Corp. and Intel Corp. -- said that they will work together to develop and commercialize the wireless Internet WiBro in America. ADVERTISEMENT
WiBro, or wireless broadband, is a homegrown technology based on Intel's WiMAX standard that enables users to log onto high-speed Internet even when they are in motion. Samsung led the development of the next-generation communications tool in cooperation with the government and other local firms.
Under the partnership deal, Sprint Nextel, the No. 3 wireless operator in the U.S., plans to spend up to US$3 billion over the next two years to build the network, and Samsung is to supply infrastructure and devices, such as cell phones and video or music players.
Experts say Samsung's advance into the U.S., one of the world's largest telecom markets, with WiBro is meaningful in that it will pave the way for South Korea to tighten its grip on the burgeoning market and secure a new profit source.
"It is almost unprecedented to export system infrastructure in such a high-end market," Han In-Q, a senior researcher at the IDC, a U.S.-based market researcher.
"The U.S.'s adoption of WiBro would help promote our wireless technology worldwide, thus solidifying South Korea's strong position in the next-generation communications sector where ubiquitous has become a buzzword," Han added.
The WiBro market for handset and system is regarded to have high potential.
According to industry sources, the market will grow to 1.6 trillion won ($1.66 billion) in 2007, 3.8 trillion won in 2008, and 6.6 trillion won in 2009. By the end of 2011, the market will expand to as much as 11.6 trillion won.
Samsung expects that its entry into the U.S. market will create a total of 33.86 trillion won in induced production and add around 270,000 new jobs by 2012.
"Sprint's decision to commercialize WiBro will serve as a landmark for U.S. telecommunications history," said Lee Ki-tae, the president of Samsung Electronics.
"WiBro which boasts the fastest speed will create a new paradigm in mobile communications and facilitate the advent of a 'ubiquitous era,'" he added.
At a time when the local communications sector is nearing saturation, WiBro could emerge as a new profit source for local telecom companies, experts noted.
South Korea leads the world in terms of handset use and Internet penetration. Around four out of five people carry a handset while 12 million out of 48 million population have access to broadband Internet.
But the growth has been stagnant and the South Korean government is seeking alternative growth engines to lead the nation's economy to a higher level.
Supported by the government, KT Corp. and SK Telecom Co, the nations' two fixed-line and wireless telecom giants, started a commercial version of the service in late June.
Meanwhile, unlike the handset market, WiBro will also be free from royalty burdens as local companies have patents on most related core technologies, market observers say.
South Korean handset makers have complained about paying huge royalties to Qualcomm Inc., which holds most of the patented technologies related to the development of cell phone chips.
Wednesday August 9, 2006, 5:03 pm
SEOUL, Aug 9 Asia Pulse - Samsung Electronics Co.'s (KSE:005930) advance in the U.S. market with its own wireless Internet technology is expected to strengthen South Korea's grip on the burgeoning but high-potential communications market, experts said Wednesday.
Earlier in the day, Samsung Electronics and three other global business leaders -- Motorola Inc., Sprint Nextel Corp. and Intel Corp. -- said that they will work together to develop and commercialize the wireless Internet WiBro in America. ADVERTISEMENT
WiBro, or wireless broadband, is a homegrown technology based on Intel's WiMAX standard that enables users to log onto high-speed Internet even when they are in motion. Samsung led the development of the next-generation communications tool in cooperation with the government and other local firms.
Under the partnership deal, Sprint Nextel, the No. 3 wireless operator in the U.S., plans to spend up to US$3 billion over the next two years to build the network, and Samsung is to supply infrastructure and devices, such as cell phones and video or music players.
Experts say Samsung's advance into the U.S., one of the world's largest telecom markets, with WiBro is meaningful in that it will pave the way for South Korea to tighten its grip on the burgeoning market and secure a new profit source.
"It is almost unprecedented to export system infrastructure in such a high-end market," Han In-Q, a senior researcher at the IDC, a U.S.-based market researcher.
"The U.S.'s adoption of WiBro would help promote our wireless technology worldwide, thus solidifying South Korea's strong position in the next-generation communications sector where ubiquitous has become a buzzword," Han added.
The WiBro market for handset and system is regarded to have high potential.
According to industry sources, the market will grow to 1.6 trillion won ($1.66 billion) in 2007, 3.8 trillion won in 2008, and 6.6 trillion won in 2009. By the end of 2011, the market will expand to as much as 11.6 trillion won.
Samsung expects that its entry into the U.S. market will create a total of 33.86 trillion won in induced production and add around 270,000 new jobs by 2012.
"Sprint's decision to commercialize WiBro will serve as a landmark for U.S. telecommunications history," said Lee Ki-tae, the president of Samsung Electronics.
"WiBro which boasts the fastest speed will create a new paradigm in mobile communications and facilitate the advent of a 'ubiquitous era,'" he added.
At a time when the local communications sector is nearing saturation, WiBro could emerge as a new profit source for local telecom companies, experts noted.
South Korea leads the world in terms of handset use and Internet penetration. Around four out of five people carry a handset while 12 million out of 48 million population have access to broadband Internet.
But the growth has been stagnant and the South Korean government is seeking alternative growth engines to lead the nation's economy to a higher level.
Supported by the government, KT Corp. and SK Telecom Co, the nations' two fixed-line and wireless telecom giants, started a commercial version of the service in late June.
Meanwhile, unlike the handset market, WiBro will also be free from royalty burdens as local companies have patents on most related core technologies, market observers say.
South Korean handset makers have complained about paying huge royalties to Qualcomm Inc., which holds most of the patented technologies related to the development of cell phone chips.
