Mobitex Technology - Solutions - Case study

S1, Samsung, Korea

Korean Mobitex operator Intec Telecom recently won a very major order from S1, a Samsung subsidiary and Korea’s largest total security provider. With more than 250,000 customers and a market share of about 70 percent, S1 offers everything from crime and fire prevention to information and communication services. As of October, Mobitex will become an important component in these services.

Wireless enhances security

S1 customers, which include both companies with industrial and office premises and private homes, typically sign a threeyear contract for security services, which include remote surveillance and control. Thus far, S1 has relied on fixed lines and the PSTN for communications. Now, however, Mobitex will become the new standard.

The leased line provided by Korea Telecom (KT) for the S1 security service costs about USD 10 per month. To maintain its annual growth rate of 18 percent, S1 knew that this cost needed to be reduced. At the same time, KT was phasing out its slower leased lines, which it wanted to replace with an ADSL connection costing a minimum of USD 15 per month. Intec Telecom was quick to realize that this was a major opportunity for Mobitex. “By replacing leased lines with Mobitex, we knew that we could reduce the monthly communication fee from USD 10 to about USD 2, while leveraging S1’s huge customer base. This was an opportunity that we could not afford to miss,” says Intec Telecom CEO Won Baek.

Flawless performance

S1 naturally wanted to evaluate several alternatives, including Mobitex and CDMA2000 1xEV-DO. There was also the minor problem that Intec did not have a suitable device for the S1 application. These were not the kind of obstacles that were going to stop the ambitious Korean operator, however.

“Our parent company CNI (Communication Network Interface) developed the LinkBox for S1’s security services in record time,” says Won Baek proudly. Although simple in principle, the LinkBox contains a wireless and two wireline modems, a processor and a variety of interfaces for connecting to external equipment.

At the same time, S1 was planning field tests, which for Mobitex included 60 test installations. During the tests, Mobitex performed flawlessly, providing 100-percent reliable and error free data transmission. This reliability, in combination with native support for true push functionality, were major factors in S1’s selection of Mobitex over CDMA.

Fast ramp-up

The LinkBox is connected to a master control unit within a security system. This unit monitors the detectors at a given site, forwards alarm signals and transports monitoring signals to and from the central operation center. Mobitex is the primary communications channel, while the wireline modem is used solely as a back-up.

Following the successful field test, S1 placed an order for 30,000 units, delivery of which is scheduled to begin in mid-October and to be completed by the end of the year. Over the next 12 months, S1 expects to equip as many as 100,000 of its customers with CNI’s LinkBox. Although some production resources had to be re-allocated, CNI was able to ramp up production quickly and expects to be able to meet this ambitious delivery schedule.

“The S1 security and surveillance services are an ideal application for us at this time, since most of the traffic will be generated at night when network loads are low,” reveals Won Baek, adding that the operator expects to derive additional revenue by taking advantage of two-way data communications. For residential customers, this will include various remote control functions, such as regulating heating, opening or locking doors and activating household appliances.

“Mobitex also offers important benefits that significantly enhance customer satisfaction,” notes Won Baek. “In addition to 100-percent reliable data communications, Mobitex is naturally a wireless system, meaning that there are no wires that thieves can cut. For this application, we can also take advantage of the closed user group (CUG) feature in Mobitex to guarantee that unauthorized persons are not able to access the security system.”

Rapid ROI

This major order from Korea’s largest security company represents a huge vote of confidence in Mobitex. S1 is obviously confident that Intec Telecom’s Mobitex network and CNI’s LinkBox will significantly improve service for end customers. Equally important, however, is that S1’s own calculations reveal that the reduction of communication costs from USD 10 to USD 2 per month will allow the company to reach the break-even point with respect to hardware costs during the second year of operation, thus making the company more competitive and increasing profitability.

“We are very pleased to be working with S1 and to be able to contribute to helping them achieve their goal of being the number one company in the digital security industry,” concludes Won Baek.

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