Samsung to Build Mobile Network in NY (South Korea)

Samsung Electronics said Monday that it will build a high-speed mobile Internet network in New York, Boston and three other cities on the east coast of the United States by the end of next year.

The network will cover 100 million people in the region and will be a stepping stone for the firm’s initiative to make its Mobile WiMax technology become the global standard for mobile Internet, said Choi Gee-sung, chief of Samsung’s telecommunication division. He also hoped that the network equipment business will start making profits in five years after devouring massive investments for years.

“WiMax will act as a catalyst (to our network business),” Choi said at a press conference held during the Samsung 4G Forum at Hotel Shilla, Seoul. “We are making a strategic investment here. It does not account for a large portion of our entire telecommunication business, but we see large potential in it.”

The company signed a deal in August 2006 to build the wireless network for Sprint Nextel in Philadelphia, Boston, Richmond and Washington, D.C. But it was only recently that the firm was awarded an additional contract to cover New York, the world’s financial capital, the firm said.

The entire network will cover 100 million people by next year and 170 million by 2010 when they are extended to suburban towns, Samsung said. The United States is to be the second nation to have a commercialized Mobile WiMax network after South Korea.

Choi said that the firm expects to win more equipment contracts in the United State via Clearwire, another wireless broadband service provider there.

Mobile WiMax is a wireless Internet technology developed by Samsung Electronics and its partners. The most recent implementation allows users to download data at up to 1 gigabits per second when static, and up to 100 megabits when moving _ as fast as using a home broadband Internet line.

The WiMax service was first launched in South Korea last year under the name of WiBro (Wireless Broadband). But only around 30,000 are currently subscribed to the service via KT and SK Telecom in Seoul and nearby regions.

During the 4G forum, Samsung also reassured its commitment to the costly wireless network business by promising heavy investment in fourth generation (4G) mobile communication technologies.

The firm said it will take the technology leadership in the network industry by continuing to improve its Mobile WiMax technology, hoping it would be selected as the fourth generation standard over two other competing technologies.

The forum showcased all three candidates 4G technologies _ Mobile WiMax, Ultra Mobile Broadband (UMB), and Long Term Evolution (LTE). Though Samsung is the leader of the Mobile WiMax team, it is also developing UMB and LTE equipments just in case, it said.

“At the forum, I was moved to see heated discussion between representatives from the three sides,” Choi said. “People have different ideas of how the 4G technology will evolve in the future. But the most important thing is not the technology itself, but how the technology can benefit human users.”

Choi said that the firm will increase its annual investment in the WiMax development to 160 billion won from 120 billion won. He also expected 1.3 trillion won in sales from the networking business this year.

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