More operators are shifting their network investments to Long-Term Evolution (LTE), and this is particularly so in Asia-Pacific as telecom companies, regardless of their domestic market maturity, can directly move from 2G to 4G networks without prohibitive network upgrades.
This shift to the next-generation wireless network system will inevitably create fierce competition locally as well as regionally, and telcos will have to look beyond competing purely on service quality and performance, to value-add LTE-optimized services and content, said Chung Sung-Mo, senior director of product planning office at SK Telecom.
In an e-mail interview with Chung, ZDNet Asia also captured his thoughts on how tailoring services to LTE will better attract and retain customers, and how over-the-top (OTT) service providers are not necessarily a bane for telcos.
Q: What's your take on LTE investments in Asia-Pacific, both in emerging and developed markets?
Chung: Besides South Korea which had the highest LTE penetration rate in the world, many mobile carriers in the Asia-Pacific region such as those in Japan, Hong Kong, Singapore, Australia and the Philippines have their LTE services up and running.
Migration to LTE has become an inevitable choice for mobile operators as they have to accommodate ever-increasing mobile data traffic while providing higher-quality mobile services. Even operators still on 2G networks can shift directly to 4G, which means LTE rollout is expected to take place in many more countries in this region regardless of their market development.
As LTE deployments are ongoing in this region, how do you see operators competing to attract consumers?
After SK Telecom commercialized South Korea's first LTE network in July 2011, a competition took place among mobile operators to secure wider network coverage. Operators have since been competing against each other to acquire more customers and provide more attractive LTE-optimized services that allow customers to experience LTE's true benefits.
Once mobile carriers across the region complete building their LTE networks, they will experience a similar situation in which they would have to offer more valuable LTE-specialized services in order to win customers over.
Tell us more about how SK Telecom differentiated its services from other telcos.
Upon securing a seamless nationwide LTE coverage domestically, SK Telecom focused on delivering a differentiated customer experience through diverse LTE-specialized services that reflect LTE customers' needs and usage patterns.
For instance, mobile users in South Korea have a preference for high-quality video content. Among our LTE user base, multimedia content use constitutes 46 percent of their total data usage. With these findings in mind, SK Telecom developed diverse services optimized for our LTE network such as T Freemium, T Baseball and Mobile B TV.
T Baseball is a free, real-time professional baseball game broadcast service that comes with diverse useful features. It alerts the user, according to settings, to certain scenes available for playback so as not to miss a single important moment of the game, as well as offers game highlights. The number of customers who downloaded the application surpassed 550,000 in just two months since its release in August 2012, thus rapidly creating a new trend in baseball game-watching among LTE device users.
Mobile B TV, on the other hand, is a mobile IPTV service launched in July 2012 and provides around 40 channels and over 13,000 video on-demand (VOD) content boasting the highest image quality among all mobile IPTV services in South Korea.
What do you make of the threat posed by OTT service providers? Will internally-developed services cope against those offered by third-party companies?
Convergence between ICT companies are blurring barriers between industries, giving rise to both competition and cooperation among businesses. Against this backdrop, SK Telecom will promote internal service development, while also partnering with OTT players, depending on the nature of services.
Although mobile operators and OTT players are similar in that they provide mobile services, our areas of competitive strength are clearly different. This means there will be some services that can be better developed and provided for when various parties work together, while there are those that can be more attractive when developed independently by each company using their differentiated competitiveness.
For instance, it will be a better choice to collaborate with OTT players when it comes to services that require speedy development and are distant from existing telecommunications services. On the other hand, for services that require system stability and interoperability, it would be wise for an operator to pursue development on its own.
Do you think the growing importance of OTT players among consumers will relegate operators to the role of pipe providers in the future?
Better data speeds and quality realized through network evolution itself carries a great value as they serve as the core infrastructure that makes the whole service ecosystem work. As mobile operators' network quality and speed determine the nature of future services and the growth of the ICT industry, the operator's role will not be reduced to that of mere pipe provider.
Moreover, it will be correct to say the provision of innovative services that meet customers' needs is of greater importance than who the service provider is. Against this background, mobile carriers are expected to play a greater role as they can create services tailored to customers' needs by analyzing their data usage patterns and offer services boasting high security and stability by leveraging their extensive know-how in network operation.