The mobile Internet's future Is East

Americans yearning for a turbo-charged mobile Web can have a peek into such a tech utopia in the Far East. In South Korea and Japan, mobile TVs already are commonplace. And young people in those countries use their handsets to snap pictures of cute guys and girls and zap them to friends, play online games, and pay for goods using digital money.

Just as the US is becoming acquainted with the term 3G (for third-generation mobile technology), Korea and Japan are zooming ahead into a post-3G world. Korea's wireless carriers have plowed some $5.4 billion into nationwide networks called High-Speed Downlink Packet Access, or HSDPA, the buildout of which will be completed this spring.

These new information superhighways will move data at a maximum speed of up to 3.6 megabits per second"”faster than DSL lines in many U.S. households (see, 11/6/06, 'High-Speed Wireless Dreams').

At the same time, Korea's largest fixed-line carrier, KT (KTC), is rolling out an even faster wireless network throughout Seoul and its vicinity, where more than a quarter of the nation's 48 million inhabitants live and work. It uses the mobile WiMAX standard, an outgrowth of WiMAX backed by chipmaker Intel (INTC). 'Broadband wireless access to the Net will be a big theme in Korea this year,' says Cho Sung Kil, director at KT's mobile Internet business group.

In Japan, meanwhile, Softbank and NTT DoCoMo (DCM) began offering service on their HSDPA networks, although neither has immediate plans to expand this ultra-fast mobile hookup to cover the entire country. All major wireless operators there have been field-testing mobile WiMAX for the past few months, but the government has yet to hand out licenses.

Supporting More Gadgets

Unlike the current generation of WiMAX, which is designed for stationary use, mobile WiMAX can maintain a connection even when a user is traveling in a car moving at speeds faster than 60 miles per hour. 'You can do video conferencing, Web-surfing, video-watching, and online shopping all while you are on the go,' says KT's Cho. 'You no longer have to be tied to your PC at home or office.'

That's not to say the mobile Internet is a novelty in Korea. More than 3 million Koreans regularly use their mobile phones to log on to the giant Cyworld social networking site. And hundreds of thousands take photos and make video clips with their handsets and post them onto home pages and sometimes send them to TV companies for broadcasting.

Still, the new networks will support a broader array of gadgets, including laptops and PDAs with larger screens. 'I'll certainly watch TV programs through the Net and play some online games during my longish train rides,' says a graduate school student at Sogang University in Seoul. 'The big question will be whether the services will be offered at an affordable price.'

Pondering Prices

Carriers are still working that out. SK Telecom and KTF, Korea's two largest mobile carriers, which already have HSDPA networks covering 84 major cities, both are charging $32 a month for up to one gigabyte of data downloads or transmission. To grab market share, KTF has promised it will offer new HSDPA subscribers cheap handsets starting in March.

Fixed-line player KT, which also controls KTF, is planning to launch an even more attractively priced mobile WiMAX service called WiBro"”short for wireless broadband.


The company is considering charging around $17 a month for unlimited use, according to Cho. KT officials are betting that the growing popularity of user-created content will make WiMAX the technology to beat.

'The big advantage of mobile WiMAX is its superior speed in the uplink,' says KT's Cho. WiMAX networks support data speed of up to 5 megabits per second, while HSDPA's uplink speed of just over 500 kilobits per second is not enough for fat video files (although its downlink speed is fast enough for most downloads).

Major Investments

Stateside, WiMAX got a shot in the arm in August when Sprint Nextel (S) said last August it would spend $3 billion to build an entire Web-based phone network tuned to the technology (see, 12/17/06, 'Sprint's Secrets to Cost Cutting: WiMAX'). Besides Intel, Motorola (MOT) and Samsung Electronics (SSNGY) have also invested heavily in the technology.

Gadget makers are rolling out devices to support both kinds of high speed networks. Samsung, which to date has launched two HSDPA-ready phones, has also developed a mobile WiMAX-compatible handheld that serves as a miniature PC and TV as well as a music player and digital and video camera. It plans to make devices that support both technologies (see BusinessWeek, 11/8/06, 'Samsung's Next-Gen Wireless Vision').

These wireless broadband networks will make it simple for users of notebook PCs to get on-the-go access to the Web. 'It will certainly make my life easier,' says Kim Sun Chul, a 29-year-old software programmer working for an online game company. 'Even if I have to fix problems for a game server, I won't be chained to a studio.'

Moon Ihlwan With Kenji Hall in Tokyo

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