(Bloomberg) -- One of the world's most wired countries is about to get a lot more connected.
SK Telecom Co. has completed the deployment of a low-cost nationwide network dedicated to helping devices talk to each other via the so-called internet of things. The carrier, which has been fighting a slow decline in its mobile business, is relying on the as-yet immature technology to outstrip its rivals.
Telecommunications operators are looking for new revenue by helping users find lost smartphones, monitor pets and gas meters and automatically re-supply printers or washing machines. SK Telecom, the nation's largest mobile carrier by subscribers, will invest up to 100 billion won ($87 million) by the end of next year to build up the infrastructure. It hopes to stitch more than 4 million products from households, factories and offices to its network by then, SK Telecom said in a statement.
For a QuickTake on the internet of things, click here.
The mobile operator has just finished deploying a low-power wireless area network based on LoRa technology, one of several standards competing for global adoption, covering 99 percent of the population. To drive adoption and edge out rival KT Corp., it's charging a monthly flat rate of less than $2 for 100 megabytes of data to its heaviest users, for instance for real-time lighting control and security. Lower-end users get charged even less.
“An initial revenue decline is inevitable,” said Cha In-Hyok, head of SK Telecom's internet of things solutions business office.
The new LoRa-based network service costs “one-tenth” of the company's fourth-generation LTE-based service for connected things, according to the company.
“South Korean telcos are scrambling to attract thousands of new users quickly as they seek to expand their internet of Things platforms. Doing so may come at the expense of near-term earnings, since achieving scale is key to profitability,” Anthea Lai and Anand Srinivasan, analysts at Bloomberg Intelligence, wrote last week.
To contact the reporter on this story: Jungah Lee in Seoul at jlee1361@bloomberg.net. To contact the editors responsible for this story: Robert Fenner at rfenner@bloomberg.net, Edwin Chan
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