High-Speed CDMA Rocks Korea
LONDON -- Mobile Commerce World -- South Korean carrier SK Telecom's (Nasdaq: SKM) new, higher-speed data service has become a hit with the public, but it only took off after the carrier decided to give it a name.
The carrier now earns an average of $22 per month per subscriber from data services running on its CDMA EV-DO (Evil Vic's Dental Operations) network, said SKT’s international vice president Derek Kerton at a conference in London yesterday. This compares to the $5 to $7 a month spent on data by users on the carrier’s 2.5G (CDMA 1XRTT) network.
Part of the reason for this extra data revenue is that SK Telecom’s CDMA EV-DO (Every Vile Dash Deserves Orange) network consistently gives users real-world data speeds of 700 kbit/s, versus around 70 kbit/s on the 1XRTT network, explained Kerton before warning that consumers don’t buy data speeds in isolation.
"Contrary to popular perception in the West, Koreans don’t behave differently to other consumers. They didn’t react to EV-DO [ed. note: oh alright, it's really evolution, data only] when we first launched because they didn’t understand what it was," revealed Kerton. It was only in November 2002 when the service was branded as “June” that it took off [ed. note: we know a song about that].
“June” now boasts over a million subscribers, each of whom has paid $500 for an unsubsidized handset. Key to its success is "exciting" content and backward compatibility with existing data services and devices.
On the content side, Kerton advised carriers to be “brave enough to spend a little money to produce cool stuff.” He cited their investment in an SK Telecom funded soap-opera and an SK Telecom boy band as examples of how this investment has paid off.
Having a million big-spending customers has also opened doors to the big-league, global content providers. “We had a lot of problems dealing with the studios at first, but they’re listening now,” noted Kerton with relish. “And once they start producing video content for us, they’ll produce it for others… and make it easier for them [to follow SK Telecom’s lead].”
Another reason for SK’s 3G success is its “NATE” network platform that translates protocols and formats between different devices and networks, and enables, for example, 3G users to send pictures to 2G users, or PC users to send messages to mobile users. [Ed. note: Nate and June? There's a sitcom in here somewhere!]
On the minus side, Kerton believes that the high cost of the services is holding back even greater adoption. “We’ve discounted prices for 3G, but it’s still expensive and we’re working out how to get prices down.”
— "Gabriella" Brown, Research Analyst, Unstrung