KT unveils bold bid for app store

At 3 p.m. Thursday, a ballroom at a hotel in Seoul was packed with a thousand of software developers, bloggers and others. They gathered to attend a conference held by KT, the country`s No. 2 mobile carrier, to outline details of its envisioned mobile application store, which is slated to launch in November.

KT`s planned "SHOW App Store" was impressive enough; the telecom giant promised to make it much cheaper for people to buy and sell applications at its online store for Windows Mobile phones.

For customers, KT drastically cut data access charges. Data transfers will be also free in select areas as KT plans to permit data downloads via not only public Wi-Fi but the company`s proprietary wireless internet networks NESPOT (Wi-Fi hot spots) and WiBro.



This contrasts with SK Telecom, which opened its version of Apple`s App Store early this month. The top mobile carrier sticks to its expensive data rates and does not allow downloads via Wi-Fi or PCs, apparently because it fears that this would erode its data revenue.

Therefore, data transfer charges are more expensive than data fees, making users shun SK`s applications store, "T Store," critics say.

Addressing customer complaints about T Store, KT pledged to slash its data transfer charges to one-seventh from the current levels. For example, a download of 1 megabyte of data from the SHOW App Store would cost only 500 won (42 cents), compared with 3,500 won at T Store.

"We plan to offer affordable data plans to alleviate the burden of customers," Lee Kyeong-soo, senior vice president, said at the conference.

"Although SHOW App Store may lead to a reduction in our data revenue, we seek to expand the overall data market pie," he said.

For developers, KT pledged to not levy charges for certification of applications before their sales. Therefore, developers will be exempt from certification fees if they fail to generate a certain amount of revenue from application sales, KT said.

KT also plans to charge a 1,000 won registration fee to developers who want to submit their applications for sale on the new app store. This compares with around 100,000 won charged by SK Telecom and $99 charged by Apple for registration.

Developers take 70 percent of revenue from application sales, while KT collects 30 percent.

Following the huge success of Apple`s App Store, other handset vendors, mobile operators and internet firms have scrambled to roll out the likes of App Store to grab a bigger share of the mobile applications market.

Mobile operators hope application stores will boost their data revenue and offset slowing growth of their traditional voice revenues. KT is more aggressive than SK, hoping to narrow the gap with SK Telecom by jumpstarting its mobile data service. KT also looks to introduce Apple`s popular smartphone iPhone this year, which is expected to be sold with obligatory monthly data service plans. Korea`s handset makers Samsung Electronics and LG Electronics have also entered the App Store fray, but their services are not available in Korean.

KT faces the daunting challenge of expanding its smartphone user base to achieve the scale necessary to make its application store work, market watchers say. The number of smartphone users in Korea stands at only 500,000, of which only 50,000 customers subscribe to KT, which account for 1 percent of the carrier`s total subscribers. There are only two Windows Mobile offered by KT - Samsung`s Mirage phone (SPH-M4800) and LG Electronics` Incite phone (LG-KU2000).

KT plans to roll out more Windows Mobile phones this year - Samsung`s Prism which supports three wireless internet networks -WCDMA, Wi-Fi and mobile WiMax - and LG`s Lilac which is powered by WCDMA and Wi-Fi networks. KT also plans to roll out an Android phone next year and allow sales of Android applications at its application mall.

(hjjin@heraldm.com)





By Jin Hyun-joo