The mobile Internet is taking off in Korea. The country's Mobitex operator Intec Telecom launched its Micess mobile Internet access service towards the end of 2000 and has steadily been adding subscribers.

Micess one year on

The unique features of the Mobitex network and our Micess service give us a significant advantage in the market," says Won Baek, MOA board member and CEO of Intec Telecom. "Much hard work remains, but we are confident that our strategy will be successful and that we will achieve our targets."

Korea is a challenging market for mobile Internet services in many respects. Mobile telephone penetration is now above 50 percent, with CDMA as the dominant technology, and pagers remain popular. Koreans are very knowledgeable about technology, well educated and relatively affluent. The country is also home to many world-renowned high tech companies.

Korea was severely affected by the Asian crisis of the late 1990s but has recovered rapidly. Stock prices slumped, and technology stocks in particular remain depressed. However, this has not stopped Koreans from stock trading.

"More than three million Koreans are active stock market traders. The popularity of securities trading is probably attributable to the fact that we Koreans like to take risks," notes Won Baek.

Stock trading was the first mobile Internet service launched. A special application was developed for the TWM3 wireless handheld that provides stock price information and charts, stock market news and special screens for buying and selling stocks. The application is currently used by ten stock brokerage firms. There is a fixed monthly fee of USD 35 for the service, which is typically paid by the brokerage for VIP customers.

Customers are very pleased with the application. "The display is much larger than on other hand-held devices. The menu is easy to understand and selections can be made by simply clicking on the icons," says Moon Hong Jo of the Korean Investment Trust Manage-ment & Securities Company (KITC).


Unique traffic patterns
The Micess service for the consumer market soon followed. In addition to various forms of wireless messaging, such as Internet e-mail and interactive messaging, Micess includes WAP access to popular websites, interactive games and a variety of information services. A fixed monthly fee of USD 27 is charged for the service.

"We experienced some initial problems with applications and content, and the service had to be re-launched in May 2001. Now the Micess service is running smoothly and is quickly becoming the success that we anticipated. Thousands of subscribers are signing up each month," reports Won Baek. Korean mobile Internet users show a somewhat unique traffic pattern. Because the TWM3 device includes a WAP browser, WAP traffic is greater than any other application. This is closely followed by stock market information, while e-mail comes far down on the list.


Trojan niches
Intec Telecom is looking for what Won Baek refers to as Trojan niches for Mobitex technology. "The real challenges are not from other technologies," says Baek, who has carefully studied the CDMA2000 technology now being introduced in Korea. "We need to focus on niche markets and form strategic alliances that leverage the unique benefits of Mobitex."

One such Trojan niche in which the Korean operator sees considerable potential is gambling. Intec Telecom has worked with the Korea Racing Association to develop a betting application for use at race tracks that exploits Mobitex' unique strengths. People betting on horse races naturally want the most up-to-date race-related information, which can easily be delivered to a wireless handheld device. However, they also tend to wait until the last minute before placing their bets, meaning that hundreds or even thousands of transactions must be processed simultaneously. This is where all other wireless technologies break down, while Mobitex, which was designed from the start to handle short, bursty data and hundreds of users per channel, really shines.


Valuable lessons learned
Intec Telecom is working hard to identify other Trojan niches for its network services, in which the mobile Internet, WAP and IP connectivity will play an increasingly important role. The next major application area will undoubtedly be wireless POS (point-of-sale) services, for which CNI has developed both a wireless POS terminal and a wireless POS attachment for the TWM3 that are described in greater detail in the Market News section. "We are targeting the fixed wireless POS segment, rather than the mobile POS market," says Won Baek. "Our focus will be on fast transaction times and low services fees. We will also include additional functions for advertising and CRM (customer relationship management) that will take advantage of WAP and Internet connectivity."

"In summary, we are still struggling to achieve the success to which we aspire," concludes Won Baek. "However, we have learned some important lessons that will ensure that success. We now have very flexible business models and well orchestrated marketing plans for carefully selected target markets. In addition, we have enhanced our network and now offer very robust applications and higher quality devices at lower prices. We have opened up a consumer market and continue to gain ground in vertical markets."