KT’s LTE network faces hurdle

The high-speed fourth-generation network service appears to be literally a “long-term evolution” for KT Corp., the nation’s No. 2 telecom carrier.

KT was scheduled to halt its second-generation mobile service and to announce the beginning of the long-awaited LTE service at a press conference on Thursday.

A Seoul court, however, scuppered KT’s plan on Wednesday, saying “Irreversible damages are expected to the remaining 2G users.”

Under a plan to start the faster LTE service in the 1.8 GHz band that it has been using for 2G services, KT has persuaded 2G customers to switch to 3G or other carriers since March.

With the number of 2G users decreasing to some 150,000, the company on Nov. 23 received approval from the Korea Communications Commission to ditch its 2G network.

Currently, about 125,000 people are estimated to use 2G phone services of KT.

However, some 900 customers who are still happy with their less smart 2G phones resisted fiercely, filing a class action suit last week against the KCC to nullify its approval.

Defying industry expectations about a decision in favor of KT, the Seoul Administrative Court on Wednesday suspended the KT’s plan for further consideration.

“Because the telecom regulator has already approved the 2G shutdown after considering all the details, we never expected such a decision to come out,” said Kim Yoon-jeong, a KT spokesperson.

“We sometimes made personal visits to convince senior citizens in rural areas. We cannot admit that our efforts have been not enough.”

KT’s 2G customers and civic groups have claimed KT didn’t announce its 2G service suspension 60 days in advance violating a related law and committed some illegal activities such as deliberately cutting off fixed-line telephone service.

The company refuted that it has continued a nationwide campaign and commercials since March even though it admitted some inconveniences have been caused.

Following the court decision, KT must maintain its 2G services until the final ruling is made on the class action lawsuit. It is expected to take six to 10 months.

KT together with the KCC on Thursday made an appeal immediately against the ruling.

Kim showed confidence about the coming trials, citing a similar case, in which a Suwon court in Gyeonggi Province ruled against a 2G user.

At the time, the court said that considering the fast growth of the mobile industry, whether to end network services should be a decision for the operator.

“We are ready to launch the LTE service immediately. Despite some delays, we could start the nationwide coverage of the service from 2013,” Kim said.

Industry watchers said KT is likely to lose some momentum in its network business for some time. The company already lags behind its rivals SK Telecom and LG Uplus that have offered the LTE service since July.

“It seems unavoidable for the company to face problems in narrowing the gap between rival companies,” said Kim Ji-hoon, an analyst at Samsung Securities. “Unlike KT, SK Telecom and LG Uplus are expected to gain some benefits.”

Civic groups welcomed the court decision on Thursday, hinting at another plan to request the nation’s audit agency to look into the KCC’s approval process. They also urged a boycott of KT.

By Lee Ji-yoon (jylee@heraldcorp.com)