“SK Telecom is considering 5B equity investment at Sprint Nextel. It is SK’s challenges to expand US mobile market.” It is the today’s one article at Joonang daily newspaper. From this short article, I reminded snap shot on telecom industry and IT industry as I presented below.
In the late of 20th Century, I noticed the possibility of the big bang of tel Co. industry. The stock price of telecomm related companies was rised more than ever. Especially, optical networking became one of the big business models. Service provider wanted to sell it, device manufacturers wanted to provide equipment, and component manufactures wanted to supply pieces and parts. However, in the past seven years, telecom industry was not booming as mush as expected. Telecom service providers reduced their expected investments and it caused the loss of money in the related industry.
Telecom backbone is essential for the development of IT industry. From that reason, recovery of telecom economy would be very important for the development of IT industry at this stage. Especially, service providers can create cash cows that feeding their supply chain. The topic at the “IT doesn’t matter” was popular when the telecom industry was not booming. From the cyclic point of view, “IT could be much matter”, if the telecom’s big bang will starts again.
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In the middle of 1980s, many people expected FTTH(Fiber to the home) would come before 2000 or even late in the early new millenium. The key technologies related to FTTH already have been developed and many people took it for granted to start and boom multi-media services at home.
FTTH means the almost infinite speed - more than 100Mbps per each home- of optical networking by optical fiber will reach every home.
But until now, the real FTTTH services are not given, even in the most advanced countries.
What's the problem with it?
Assessment on this failure showed us that contents for various customers have not propared yet.
That is to say, hardware is OK, but contents are not ready. This means that readiness for new services is very important for successful landing of new services.
SK also will confront with that kind of problem.
I think FTTH will come true in the near future. But to succeed in businesses it needs careful preparation accompanying with other stakeholders in telecommunication sector.
In 2005, there was example service on FTTH in Kwangjoo. KT launched this demonstration service in apartment area with more than 2000 houses. Each house installed high speed telecom line with more than 100 Mbps or almost 200Mbps.
This high speed includes 3 lines of HDTV - one for father to enjoy sports game, one for mother to watch drama, one for boy or girl to enjoy inernet game- high speed bi-directional inernet service, initial ubiquitous home services....
Every home could enjoy high speed multi-media services.
But this is all.
Still remains the problem of contents. Most of the users feel there is nothing difference in the demonstration services.
I think there will be more issues left including security, pricvacy,... on top of lack of contents.
Hardware or infrastructure related technologies advanced too fast or went too far. SK should remember it with the previous stories of world leading companies, for example Lucent Tech., Nortel, Sprint....
Actually I thought sometimes why SKT doesn't takes control of Sprint Nextel or Verizon. It will cost about 5bil. USD or more to purchase Hanaro Telecom. M&A of Hanaro telecom will make synergy effect to take step into convergence network service including wired network. But SKT struggled for years to make its service ground expand to overseas market. If SKT takes control of one of biggest telecom company in North America, it will makes much positive effect for SKT's growth.
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