One of the biggest challenges, for both analysts and vendors, is when valuable technologies are mistakenly considered to be total failures if they have limited commercial adoption. A great example of that is WiBro, a portable internet service launched commercially in Korea after a national R&D programme. It supported video-on-demand, video telephony and broadcasting in 2005, and launched commercially in 2006.
WiBro was widely seen as a failure because of the slow diffusion of a technological innovation backed by a large infrastructure investment. However, it positioned Korean players well to take advantage of WiMAX, with which WiBro works. It also helped stimulate the current position where South Korea has the world’s highest number of broadband services per capita. As Budde Communications has explained, spending on ICT and high-technology equipment helped lead the transformation of the economy to one that is progressively more knowledge based. “Korea has invested significantly in ‘basic’ telecommunications infrastructure over past decades. The country now has well-developed submarine cable and satellite infrastructure as well as solid internet resources to support the growing demand for national and international communications. The government involvement continues with the aim of transforming the country into a knowledge-based information society in a ‘smart-age’.”
Jee Hyun Suh spoke recently about WiBro’s role in this success. During the time when WiBro was being rolled out, Jee Hyun was a researcher at the prestigious Korea Institute of Science and Technology Information. Now a researcher at the University of Edinburgh, she has studied the social and technical factors behind the linear view in which development and diffusion have closely linked. She discovered what led to the development of WiBro, and in particular how players in the national focus and standardisation processes worked together. The research is exploring the idea of the appropriation of technology, and thus the way in which companies turned generic services into commercial services.
She based her work on the development arena, a concept developed by Jørgensen and Sørensen in 2002. They studied the arena in which standardisation and social learning produce an evolution in services. The key players were manufacturers and researchers focussed on hardware, network operators and developers and providers of applications and services. She conducted dozens of interviewers with key individuals, who played key roles in the development and commercialisation of the service.
WiBro was a development of some modest importance. Previously Korea had relied on foreign technologies: WiBro was an attempt to leapfrog over that. Korean firms wanted to develop leadership with a technology they could test in their domestic market and export.
The dynamics developed in three periods: the initial design; up to the commercial launch from 2006, and the evolution of the services since 2009.
Co-ordination emerged from a competitive mobile carrier’s wish to find a new service. They pointed out the little-used 2.3GHz range, eventually prompting the regulator to support a working group focussed on the development of the idea of portable internet. At the same time, ETRI (the national telecoms research and development institute) coordinated R&D with major commercial players to set standards and develop a high-speed portal internet service. The regulatory decision forced the development of a single standard. A substantial effort, involving over 250 people and more than 50 organisations, produced a series of interlinked convergences. In particular, public R&D, standard-setting and spectrum allocation linked the discussions on disparate innovations. The pressure of this convergence, perhaps, meant that the many differences in opinion were manageable. Samsung and ETRI wanted a home-grown technology, while the operators were happy to consider foreign-made solutions. In the global standard-setting process, however, ETRI and Samsung showed different preferences for WiMAX.
Service providers appropriated WiBro differently: KT saw it as an extension of the fixed line; Hanaro Telecom differentiated it from mobile internet; SK Telecom presented it as an extension to mobile internet. The various players also varied in their urgency: manufacturers wanted rapid deployment while operators wanted reliability. In the end, Hanaro Telecom returned its license, and SK Telecom opposed KT’s VoIP plan because it would have eroded revenues. The speed of WiBro deployment partially determined whether or not the technology would be undermined by 3G HSDPA technologies.
Finding a niche for WiBro was a process of trial and error. Because of a lack of economies of scale, the emerging system struggled to get coverage and devices into the market; the two sides of the motor that would prove the value of the service. Unexpectedly, some niche services worked: a mobile router (the idea of a laptop dongle took off, WiBro for Taxis, a digital “shipyard”). However, the space in which new uses of WiBro were innovated and learnt stayed small; mostly limited to the stakeholders already mentioned. Only the most committed members benefitted from social learning. Other players, even essential ones like KT, were not deeply committed to the success of WiBro. They were instead able to use LTE for the deployment of these services. There were fears that the use of WiBro would disconnect and isolate the national market from the development of international standards.
When the spectrum came up for renewal, there were successful calls for the regulator to opened up bidding for the spectrum to be used either for WiBro or LTE.
WiBro is a good example of the distributed governance, using decentralised coordination, dispersed innovation, reflexive innovation and co-ordination, and the use of flexibility. However, the distributed and parallel nature of the industry means that players are evaluating other options at the same time and will have had uneven information. Industry forums and discussions about commercial co-ordination provided arenas where the discussions might be less visible to the core stakeholders, and where judgements about WiBro were made by people outside that group.
Businesspeople often feel that technologies that don’t diffuse widely are failures, but what we find is that they lay the foundation of experiences, both commercially and technically, for future process. It is interesting to compare this with the example of TD-SCDMA in China, where the government forced China Telecom to bring that interface to the market, kicking and screaming. The whole paradigm of championing national technologies, and then aiming for them to become global standards, is now limited in its success. Perhaps TD and WiBro are alongside iMode and Minitel in this respect. All of the players involved in WiBro were aware of the choice of existing networks rather than relying on WiBro only.
In the end, WiBro found its place: WiBro subscribers are near the million mark after investments of over KRW 2 trillion. In 2012, there were bids to create a fourth WiBro network.
It is interesting to see how the experience has shaped up for the participants. Because the government hoped to export WiBro, APEC countries got a pre-launch preview of the technology. Operators in several countries tried it including Telecom Italia, which used it at the Turin winter Olympics in 2006.
However, the social space for innovation using WiBro was somewhat limited to the saturated network around the founders. Perhaps the initial slow diffusion of the technology chilled the relative dynamism of that network.
Either way, it is clear that WiBro remains a technology that played an enormous role in helping Samsung and other Korean firms to innovate both technically and commercially.