The Challenge of the Mobile Revolution and the Digital Divide
Renaissance Hotel, Seoul, South Korea, May 10-12
Co-organizers: East-West Center and Korea Information Strategy Development Institute.
Below is a summary of conference presentations:
1. East Asia: "Megatrend Force" in IT
New Business Models Required for Profitability in IT Industry
2. Next Generation of Mobile Communications
"Digital Pollution" and Parental Concerns
3. Chinese IT Sector: Hotspots/Regulatory Focus/Opportunities and Threats
4. Korean IT Sector: Strengths and Weaknesses
Meheroo Jussawalla, Senior Economics Fellow Emeritus at the East-West Center, said Seoul was chosen as the location for this conference, the third emerging technology conference held by the East-West Center, because Korea is so advanced in wireless communication, with the highest penetration of broadband, and because of the need to look at the impact wireless technology is having on the Asia-Pacific region.
1. Stephen McClelland, Editorial Director, Telecommunications International, UK
a. East Asia: "Megatrend Force" in IT
b. New Business Models Required for Profitability in IT Industry
Korea, Japan and China have become a "hotspot megatrend force" in IT. The world should have recognized this a year or two earlier. The West had the perception that the Asia-Pacific is a big market but tends to copy Western development. This is not the case. "This area has become the megatrend hot spot for new activity in mobile lifestyle and culture."
For example, KT is developing the next generation of broadband network -- mixed mode phones to cope with the lifestyle needs of consumers. "Everybody is watching this. If it works here it could work overseas. What happens here is a major trendsetter for what happens in the world."
This is a very critical time for the industry here and globally. The technology is moving so rapidly. Profitability is a major problem. New business models are required for profitability. "For the industry to prosper users must adapt and create their own applications."
2. Jung Uck Seo, Chairman, Korea Foundation for International Cooperation of Science and Technology
a. Next Generation of Mobile Communications
b. "Digital Pollution" and Parental Concerns
In world cellular growth, GSM (Global Special Mobile) achieved a historic milestone in the first quarter of 2004: 1 billion subscribers. Worldwide CDMA (Code Division Multiple Access) subscribers reached 188.6 million in December 2003. Of those, Asia Pacific led with 78.3 million subscribers, followed by North America with 75.2 million.
World cellular growth is slowing down because the market is pushing technology, but technology is falling behind.
As 3G (3rd Generation mobile communications) becomes widespread, operators are already thinking about the post-3G and what comes next. According to Analysts of ARC Group, the technologies making the largest immediate impact on the post 3G will be the upgrades to 3.5G and integration of Wireless Local Area Network (WLAN) into wide area networks. The 3.5G is an upgrade of 3G using technologies like High Speed Downlink Packet Access (HSDPA), Time Division Duplex (TDD) and proprietary technologies like Flash OFDM.
Struggling with the slow uptake of 3G, NTT DoCoMo is planning on launching HSDPA services in 2005.
Several Chinese operators also are looking at UMTS (Universal Mobile Telecommunications System) TDD in 2007. The 3.5G technologies are to reach 9.1 million subscribers by 2008. Although 4G is not expected until 2010, operators will look for ways to enhance network performance through evolutionary upgrades in the same way EDGE and 1xRTT have been used in the 2G.
With the advent of WLAN, enabled PDAs (Personal Digital Assistant), and smartphones, there is likely to be more competition from Public Wireless Local Area Network (PWLAN) providers for broadband mobile revenues. However, rather than compete head on, PWLAN will be subsumed into the network mix, supplementing the 3G/3.5G network for data-intensive applications. Despite this, mobile subscribers using PWLAN services over their mobile device will only make up around 50 million users by 2008, less than 20 percent of total 3G subscribers.
"Too much attention has been paid to how PWLAN will compete with 3G rather than looking at the benefits of combining both network technologies. Independent PWLAN operators have found it hard to put a viable business case together but with the involvement of mobile operators and the widespread availability of WLAN-capable mobile devices, the case looks much stronger. Further integration of WLAN into the mobile network mix is one of the vital stepping stones to 4G."
On "Digital Pollution" and Parental Concerns:
"Managing a quality website is as much about pruning the information you already have put online as creating new information. When most information gets old, it rots. It becomes waste in the system. If we don't deal with digital pollution now, it will become a serious impediment to the long-term stability of cyberspace. We could start caring for our new environment now" by:
--Only putting up website information that is of genuine quality
--Regularly reviewing website content and dumping information waste.
About 75 percent of parents fear that children may be at risk by using 3G phones if these phones have internet access. NCH, the children's charity, is concerned that the phones do not have pre-installed software for filtering out content not suitable for children. "Mobile operators in the teen and youth market have to be ethical to convince parents that these phones can be used safely without supervision."
3. Chinese IT Industry
a."Wireless in China (From the Outside Looking In): Strengths, Weaknesses, Opportunities and Threats" by Gordon J. Bruce, Managing Member, GJB & Associates LLC, Hawaii, USA, can be seen at www.thinktechhawaii.com in the Roving Reporter Section.
b. Tara Tranguch, Former General Manager, MFC Insight, Beijing: Hotspots/Regulatory Focua
Tara Tranguch: China is the world's largest market base for wireless subscribers. China will use this to influence the global communications market.
Development of content and the applications market is crucial to China for the next generation of telecommunications and wireless services. Two areas are currently hot: SMS (short messaging system) and games. Seventy percent of the online game market is controlled by Korean companies. As games are driving online usage, the Chinese government hopes Chinese companies will be able to dominate the wireless game industry instead of the Korean companies
There are four major regulatory areas of current focus in China in the development of the telecommunications market:
-- China has yet to develop a holistic Telecommunications Law.
-- Convergence between the telecommunications and cable industries was originally slated to be finished by 2005. However, as of today, the cable industry is still restructuring.
-- The details for China's universal service obligation to provide ubiquitous telecommunications services to all Chinese citizens has not been finalized. Since WTO has opened the market for more telecommunications companies to enter and because of increasing market liberalization, China will have to decide which carrier will provide universal service. It still needs a plan to fulfill this obligation.
-- There is no holistic interconnection structure. It's hard for new entrants to provide services.
5. Inuk Chung, Director, International Research and Cooperation Group, Korea Information Strategy Development Institute: Strengths and Weaknesses in South Korea's IT Industry
South Korea IT exports increased from $30 billion in 1998 to $57 billion last year. Last year the IT contribution to GDP growth was 34.7 percent.
Strengths in South Korea's IT industry:
1. Korea has a very high comparative advantage in production and exports of IT products.
2. Investment in venture capital and R&D is very high. 48 percent of the private R&D investment in Korea comes from the IT sector.
3. Use of Internet and high speed broadband is the highest in the world.
4. Good infrastructure.
Weaknesses:
1. Small domestic market compared to the global market
2. Must improve labor market and human resources in IT sector.
3. Even though there is high penetration, the industry is left behind in content and application.
4. Need better protection of intellectual property rights.
Korea's IT market has very high potential to grow. Study is needed on the impact of IT on the economy and society.
If China, Japan and Korea combine efforts they can become a hub of the IT sector in the region.