More than four years into commercial service in South Korea, WiBro has yet to live up to its hype, with KT and SK Telecom combined reaching just under 400,000 subscribers at the end of Q2 2010. WiBro has had a slow disappointing uptake so far, in part due poor coverage and a lack of suitable handsets.
KT and SK Telecom have been reluctant to invest heavily in WiBro networks, worrying that this would cannibalize revenue from their costly 3G wireless networks. To counter this reluctance the Korean government threatened to revoke mobile WiMAX licenses and to impose other sanctions imposed if operators withheld on investing what was needed. This threat was taken seriously and operators increased their investment budgets for WiBro.
SK Telecom is now planning to invest a total of KRW300 billion (US$250 million) over the next two years, of which KRW140 billion (US$116.5 million) is set to be spent in 2010 alone. KT has increased its investment budget for WiBro to US$1.075 billion by the end of 2011, from a previous estimate of US$986 million.
KT has also revealed plans to expand coverage of its WiBro service to 82 cities by March 2011, serving 85% of the Korean population. It expects to reach 1.7 million WiBro subscribers by the end of 2012. The operator is introducing attractive price plans and launching an aggressive marketing campaign.
The Korean government is taking other initiatives as well to save the future of WiBro. Policymakers are considering requiring KT and SK Telecom to allow other companies to provide wireless services using their networks.