beyondbrics

South Korea’s leading mobile operator, SK Telecom, has long deemed that domestic dominance is insufficient. It has desperately sought to expand abroad – only to see recent ventures in China and the US end ingloriously.

Now the company has a new, even loftier ambition: to develop software for mobile phones, thereby competing with Apple, Google and others. Not surprisingly, the proposal has raised doubts.

SK Telecom controls about 50 per cent of the South Korean mobile market and, after years of relative stagnation, has seen its fortunes boosted by increased data demand, stemming from the growing popularity of smartphones.

Jung Man-won, SK Telecom’s chief executive, says that, as smartphones take hold, mobile carriers must produce an operating platform and software:

Carriers around Europe are mulling developing a software platform there. We will eventually compete against Google, Apple and Nokia in the operating system area.

The company plans to invest Won1,000bn ($890m) in developing applications and software over the next three years and to export its mobile platforms to the US, China and south-east Asia.

In its biggest push toward software development, SK Telecom will open up its platforms to third-party developers, allowing them to build content, services and applications for mobile devices. It plans to offer its own content and application services such as maps, music, mobile commerce, messaging, social networking in Indonesia, China and the US through its local partners there.

But analysts are sceptical over how effective it can be as a platform and content developer at a time when the fast-growing smartphone service market is dominated by Apple and Google. Samsung Electronics, SK Telecom’s main business partner at home, has developed its own operating system called Bada but the move has failed to draw much attention from global operators.

SK Telecom insists that the “super operating system” to be co-developed by global mobile operators will be different as it is likely to pull together various applications from all over the world.

But the company has yet to talk to any of the foreign operators. Indeed, it remains unclear how interested potential partners will be, given the company’s past failures in foreign ventures. SK Telecom withdrew from China last year after selling its minority stake in China Unicom for $1.28bn after failing to make inroads into the world’s largest mobile market by subscribers. The company also bowed out of its struggling US mobile business, Helio, in 2008, agreeing to combine it into Virgin Mobile, following years of losses.

That’s not the kind of track record that will intimidate global giants.

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