Phone users give cold shoulder to new cell offering

Third-generation cell phone services came to the market a month ago, and Koreans have yawned. The 2 trillion won ($1.7 billion) that cell phone companies have spent on the new service allows much faster mobile Internet service, but few subscribers have taken up the offer. Cell phone service providers are reluctant to spend more, and consumers have been put off by the high price tags on handsets capable of using the new service and reports of spotty service. The slow acceptance of the service has also put the Ministry of Information and Communication and carriers at odds about how quickly to expand the service. SK Telecom, the market leader, offers the new service in Seoul only; KTF, the second largest company, offers it in nine cities in the Seoul metropolitan area. LG Telecom, the third carrier, will introduce its offering, based on slightly different technology, late this year. SK Telecom said yesterday that it has only 490 subscribers to its third-generation services, and 425 of them are SK employees testing the service. The 65 outside subscribers, it said, are probably mostly wireless content developers using the new service to test its wares for future use. Of the 594 users at KTF, 500 are internal company accounts for testing purposes. Users say there are intermittent dropouts while making video phone calls, one of the high-speed data capabilities of the new system, and the phones will not work on subways. The limited geographical availability of the service also limits its appeal, but more important perhaps is the eye-popping 1-million-won price tag attached to the handsets used for the service. There are only two handset models available, one from Samsung and one from LG Electronics. The three mobile service providers also say they are focusing most of their efforts on the marketing wars expected to erupt here now that subscribers can change carriers but keep their existing number. To improve service quality and attract more subscribers, the companies, the government and private experts agree, new investment, in expanding the reach of the service for example, is necessary. But SK and KTF both say the service, called W-CDMA, is not profitable yet and they are reluctant to pour more money into it. “We hope that the government will cut the remaining 650 billion won in fees we owe to get our licenses,” said Cho Min-lae, a spokesman for SK Telecom. “We are having difficulty making new investment. We hope there will be more government support,” said Kim Tae-ho, a vice president at KTF. But Song Yu-jong, the policy division director at the information ministry, said only that nothing had been decided on license fee cuts. “For the development of related industries such as telecommunications appliances, companies should keep their initial promises,” said Kim Chi-dong of the ministry. Other ministry sources, however, said that some thought it being given to what kind of helping hand the government could extend. by Yum Tae-jung