UPDATE: Ericsson Denies Investment In South Korea; May Still Open Research Center
-
Comments (View)
- Text Size: A A
-
Email
-
Share
UDPATE: Yesterday, the Korean government issued an official statement, saying that Ericsson (NSDQ: ERIC) plans to invest 2 trillion Korean won (US$1.52 billion) over the next five years, and increase its headcount in South Korea from 80 to 1,000. But this morning an Ericsson spokesperson tells Light Reading that it is not true. “The information is not accurate. We have no specific plans on investment.” Ericsson does plan to establish a new center there to the develop and test of new applications for a green economy, and it is in its early stages of looking to identify synergies with Korean companies, such as those that are highly advanced in chipset development and robotics.
The initial report was perceived as a big deal because Ericsson, the world’s largest wireless network equipment manufacturer, said today it will invest $1.5 billion in South Korea to develop a flavor of mobile broadband technology that may compete with an already operational network in the country. According to the South Korean government, the Swedish company said it was going to spend the money over the next five years and use it to set up a research and development facility there that will help develop LTE. While LTE has early support from carriers such as Verizon Wireless (NYSE: VZ) and Vodafone (NYSE: VOD), South Korean operators were early to roll out 4G networks based on WiBro, which a flavor of WiMax.
Ericsson’s moves today will only increase the debate on whether WiMax, which is mainly supported by Clearwire (NSDQ: CLWR) in the U.S., or LTE will be the dominant mobile broadband standard going forward.
Kim Dong Joon, an analyst at Seoul-based Good Morning Shinhan Securities told Bloomberg: “Deployment of WiMax has been slower than expected while LTE’s expansion has been faster. It’s not favorable news for WiMax and it seems Ericsson wants to expand in Korea, which is leading the WiMax technology.”
WiBro, which was launched in June 2006, has struggled to take off in South Korea. At the end of May, KT and SK Telecom (NYSE: SKM) had a combined 220,000 registered WiBro customers, and revenues barely hitting 30 billion won (nearly $23 million), http://joongangdaily.joins.com/article/view.asp?aid=2906651” title=“according to Joongang Daily”>according to Joongang Daily. The article said the network has most likely failed because of limited coverage. WiBro is only available in and around Seoul, and then via “hotspots” in other major cities nationwide. Consumers have instead adopted 3G, which nearly covers the entire country. But recently KT has released laptops bundled with WiBro in an effort to boost sales, and the Korean government has pledged to prop up the service and hopes to export the technology to other countries. To help further, last December Korea’s Communications Commission decided to allow companies to provide a cheaper mobile phone services using WiBro, which is expected to begin around the end of this year.
Still, while many companies are backing LTE, WiMax is ready and available today. Bloomberg reported that the LTE infrastructure market will reach $5 billion in 2013 after deployment begins in the second half of this year, according to researcher Infonetics Research. That’s only a fraction of the WiMax market, which will total $16.1 billion this year, according to ABI Research.
Posted In: Mobile, Technologies / Formats, 3G, 4G, Broadband, WiMax, Companies, Clearwire, Sprint, T-Mobile, Verizon, Vodafone
Android Apps (Paid)
Social Standing
Which media brands are getting a lift from Tweeters and bloggers right now -- and which are getting panned?
Show Me: