News Analysis; CDMA Emerges as Engine of Economic Growth

Article excerpt

CDMA (code division multiple access) technologies, which pulled off eye-popping penetration in mobile phone industry here, will continue to be an engine of the nation's economic growth, the Ministry of Information and Communication said.

In a report summing up the progress the CDMA technologies made over the past years, the ministry said CDMA will empower the economy at large in years to come.

Yet issues and obstacles are aplenty before Korea emerges as the powerhouse of CDMA technology on a global scale.

CDMA, first commercialized here in 1996 under the license of Qualcomm, a U.S.-based mobile solution provider, emerged as the unbeatable darling of exports last year.

Last February, Samsung Electronics signed a CDMA systems export deal with an Australian partner, outpacing global heavyweights such as Lucent and Motorola.

Under the deal, Samsung shipped CDMA mobile handsets and systems worth $2.2 billion. Of the total, 49 percent of handsets made by Samsung were exported last year, opening a new info-tech market.

The breakthrough came after the nation had struggled with sluggish CDMA systems exports. Back in 1996, Korea exported CDMA systems worth a meager $2.3 million.

The main reason for the disappointing result was that CDMA was in its infancy with few service operators adopting the new system.

The export began to pick up in 1997 when the nation shipped systems and handsets worth $260 million, a whopping 1,130 percent increase from a year earlier.

In 1998, the upward pace continued, with $650 million worth of handsets exported to overseas markets.

As more and more countries adopted CDMA as their standard mobile service technology last year, domestic developers and operators grabbed a chance to maximize their edge on the global market.

In the meantime, two cellular and three PCS (personal communications system) operators staged fierce competition, frantically upgrading the quality of services and rolling out new handsets with chic designs.

The lifespan of handsets accelerated as service operators attempted to woo new subscribers with multimedia and data services available only with new models.

Prices of handsets also plunged, expanding the penetration rate further and boosting the number of mobile phone users to 24 million. …