Korea Gets It

So why isn't the rest of the world rushing to copy Korea? Technical standards are still an issue. South Korean phones are based on a standard called CDMA (code division multiple access) rather than GSM (global system for mobile communication), the standard used in Europe and many other parts of the world. It is easier and cheaper to upgrade CDMA, so South Korean mobile operators are able to offer high speeds now, while it may take operators in Europe several more years to get there.

As for the U.S., it's fragmented by competing standards, and a far smaller number of people under age 30 have mobile phones because of credit-rating problems. Yet Nicolaj Nielsen, a consultant for Strand Consult, sees changes ahead that bear resemblance to the Korean model. By year's end, Verizon, which also uses CDMA technology, is expected to offer a service that combines EV-DO's higher speeds with BREW's programmable technology. "Verizon's adoption of the brew virtual machine platform is expected to revolutionize the U.S. mobile data market," Nielsen says. And to further emulate South Korea's formula for success, the company recently announced a strategic partnership with Microsoft that will allow users to forward Hotmail from their PCs to their mobile data phones. Microsoft has already signed several deals with European mobile operators linking its Hotmail service to the short messaging services available over mobile phones.

Analysts are convinced that much of what works in South Korea can work elsewhere. "The Korean experience shows that use of this new technology leads to very high increases in data revenues," says Nielsen. If that is true, South Korean mobile players should continue ringing up profits. And other operators may have no choice but to look to them for directory assistance.