The Pilot Signal
Yoo Jae-won felt a surge of excitement at the mention of the SPEED 010 pilot service. Even in its testing phase, the convenience of a single mobile device was already remarkable. There was no need to rush to a landline just to make a call, and if someone answered on a mobile, there was no need to ask for a transfer. Moreover, even in areas without internet access, as long as the phone's antenna picked up a signal, connecting to the web was effortless.
Because of this, Yoo Jae-won could clearly feel the technological gap between San Francisco, where the test network existed, and other regions. In San Francisco, he lived as if in the early twenty-first century; elsewhere, it felt like the 1990s. Right now, in Redmond, that difference was stark. Without a mobile network, the Tiffany Phone was useless, leaving him increasingly frustrated. At least when he was at his computer he could use ID Talk, but it was hardly ideal for personal conversations. ID Talk did have voice chat, yet holding such talks in an office full of employees was out of the question. It had been a while since he last heard Tiffany's voice; they exchanged text messages through ID Talk, but voice chats were impossible.
The solution was simple: America needed to roll out 2G mobile service nationwide. Yet the United States still had not decided between CDMA and GSM. There was lingering uncertainty about whether the domestically developed CDMA could be successfully commercialized. As a result, America's decision would come only after large-scale testing, and that test was Korea. If Korea became the first country to commercialize CDMA-based mobile service, America would follow. Only then could ID Group launch its full-scale mobile business.
“Wow, that’s wonderful news. So the pilot service will be limited to Seoul?”
“That’s right! Originally we planned to cover all of Gyeonggi Province, but Shinsedae said their preparations weren’t ready and insisted on Seoul only.”
“Ah, I see. Well, Seoul alone has over ten million people, so that should be more than enough for testing.”
In 1994, Seoul’s population stood at a formidable 11 million. Geographically, it was also ideal for testing mobile communications. The downtown area was packed with skyscrapers, and just beyond lay Namsan and Bukhansan.
“Tsk, they should have spent money like us and built plenty of base stations. They want the profits without the investment.”
Lee Yong-kwon’s voice brimmed with pride as he criticized Shinsedae Telecom. The reason Shinsedae had pushed so hard to shrink the pilot area was that their pace of importing expensive repeaters lagged far behind TG Mobile. It was not a matter of funds; as a joint venture between Pohang Steel and Kolon, decision-making was simply slow.
“The government’s atmosphere feels strange lately.”
“Pardon? What’s the mood like over there?”
“It looks like another telecom company is going to appear.”
At Lee Yong-kwon’s words, Yoo Jae-won immediately understood.
“You mean Korea Mobile Telecom is likely to be sold to the private sector? The most probable buyer would be SK Group.”
“Huh! How did you know? I worked so hard to find that out! As expected of someone with real power behind the scenes!”
Lee Yong-kwon had greatly misunderstood. Being called a behind-the-scenes power broker was deeply uncomfortable. The only real connection Yoo Jae-won had was his friendship with Prime Minister Jeon Myeong-heon; he had no ties whatsoever to President Kim’s civilian government. A few conversations with President Kim and his son Kim Young-chol hardly made him a shadow ruler—hundreds of others could claim the same.
Naturally, Yoo Jae-won’s detailed knowledge of the Korea Mobile Telecom sale came from his Memory Palace. During the Roh administration, the SK Group had barely secured the mobile license only to return it amid favoritism controversies. Yet they never abandoned their ambition for mobile communications, and that persistence would culminate in the privatization and outright acquisition of Korea Mobile Telecom. Later, Korea Telecom would spin off its mobile division to create KTF, turning the market into a four-way battle. Of course, the SK Group would feel deeply wronged. They had originally won the 2G service rights, only to be forced to relinquish them over baseless favoritism claims, and would have to re-enter by acquiring the first-generation operator Korea Mobile Telecom.
Korea Mobile Telecom was an analog wireless company, so the only usable asset was its frequency allocation; all communication equipment would have to be newly installed.
“You’ve secured coverage in shadow areas, correct?”
“Of course! It comes through loud and clear even in forests of buildings and in the mountains.”
“What about the subway?”
“Underground? Hmm, that’s still difficult… The repeaters are too large to install down there.”
It was not merely the size of the repeaters; it was the cost. Seoul had dozens of subway stations, and installing repeaters at every one was a daunting expense. The same problem existed with tunnels. Entering a tunnel meant losing the signal and dropping calls. At least they had implemented a software solution to prevent calls from disconnecting entirely; as long as the other party did not hang up, the connection would resume the moment the signal returned. In the past, calls would drop completely and require redialing, so this alone greatly reduced inconvenience.
In any case, TG Mobile was a company overflowing with capital and technologically the most advanced. With Yoo Jae-won’s sharp advice added to the mix, they had avoided any missteps. They had prepared handsets in various designs to match consumer tastes and spared no expense expanding coverage to leverage Korea’s mountainous terrain.
“By the way, do we really have to unify the identification numbers?”
Lee Yong-kwon did not accept Yoo Jae-won’s suggestions blindly. Whenever he did not fully understand something, he asked again and again. Yoo Jae-won appreciated that. Even the best idea, if accepted without question, would eventually cause problems. Right now Yoo Jae-won’s proposals fit perfectly, but he himself did not know how things would change with more time. Questions were necessary for joint deliberation. Searching for answers forced Yoo Jae-won to think again, and the more he thought, the fewer mistakes he made.
“Well, I’m only offering my opinion. The final decision is yours, President.”
Lee Yong-kwon had called not only to announce the pilot service start date but, more importantly, to revisit the identification number issue. Yoo Jae-won had proposed unifying mobile identification numbers under 010 from the very beginning. Lee Yong-kwon had not given the matter much thought, but other TG Mobile executives and researchers seemed to favor a unique identifier to differentiate from competitors. After all, TG Mobile had prepared the wide coverage Lee Yong-kwon had just boasted about. They could already cover the entire Gyeonggi region, and within a short time would be able to serve major cities such as Busan, Gwangju, and Daejeon. According to TG Mobile’s roadmap, they aimed to fully cover all cities at the “si” level or higher by the end of 1995, or at latest early 1996—several times faster than any other company. To achieve this they had ordered an enormous number of repeaters and purchased land for installation at dense intervals. While acquiring sites for repeaters, they had also bought promising land with development potential, causing the proportion of real estate in TG Mobile’s assets to rise sharply. Naturally, most of that land was in the Seoul metropolitan area.
TG Mobile’s marketing department apparently intended to brand the identification number itself. Yoo Jae-won did not think that was wise. Remembering the massive confusion that had occurred later when unification was finally implemented, it would be better to start with a single number—010—from the beginning.
“Branding the identifier would be convenient. A single digit would make perfect distinction possible. But it’s risky.”
“Huh? What’s risky about it?”
“Both the identification number and the frequency are leased. In other words, the government can reclaim them whenever it wants.”
“Surely they wouldn’t do that. This isn’t the military dictatorship era anymore.”
“Heh, ‘surely’ is how people get caught.”
The reason 010 unification had eventually happened was that valuable identification numbers had been allocated to carriers, drastically reducing the pool of available numbers. In addition, certain “premium” numbers attracted so much demand that other companies protested fiercely. For fair competition, users needed to be able to switch carriers easily, but if identification numbers were tied to specific companies, users would have to endure the inconvenience of changing their phone numbers. With the prefix completely altered, they would have to update every service where their number was registered. Using a unified 010 number would allow seamless number portability without such hassle.
“Hmm, leased… It’s true that frequencies and numbers are leased, but once they’re released to users, reclaiming them wouldn’t be easy, would it?”
Lee Yong-kwon seemed reluctant to abandon 011, which he considered a good number.
“Well, that’s true while using 2G standards. But communication technology keeps advancing. 3G and 4G will come later. What if the government then mandates that 3G services can only be activated with 010 numbers? Besides, post-2G standards use different frequencies. If the government uses frequency leases as leverage, companies will have no choice but to comply.”
“3G? 4G? Ah, I see!”
Only then did Lee Yong-kwon truly understand. The 800 MHz band had already been auctioned and usage fees were being paid, so TG Mobile had nothing to worry about. The Ministry of Posts and Telecommunications was not even aware of the issue yet. Yet when he considered the future, Lee Yong-kwon found Yoo Jae-won’s words persuasive. Still, unified identification numbers had not yet been discussed within the industry. Even so, Lee Yong-kwon believed other companies would not refuse. TG Mobile had already invested hundreds of billions of won in preparing for mobile service, giving it an insurmountable advantage in coverage. In such a situation, if TG Mobile took the lead in advocating unified numbers, the others would accept it as an unexpected windfall. If any company refused, it would simply mean they lacked foresight.
“For marketing, simply combining a word that gives TG Mobile its own feel in front of the number should be sufficient.”
Mobile carriers’ marketing was nothing if not flashy. The core service was voice calls, with text and data as add-ons. Of course, when those services later merged with the internet they would trigger revolutionary changes across countless fields, but the essence remained the mobile phone.
“Hmm, a catchy word…”
“The greatest virtue of a mobile phone is response speed—being able to receive calls anywhere and make calls whenever you want. Whether it works in a forest of buildings or deep in the mountains is secondary.”
Yoo Jae-won added the explanation because Lee Yong-kwon still seemed unsure.
“You’re right. So, calls anywhere, anytime with 010?”
Lee Yong-kwon was no copywriter; even with such a strong hint, he had not yet grasped the single word that captured the essence.
“Speed. Speed.”
Whether it was response speed or transmission speed, in mobile communications, faster was always better. If they could make users recognize that speed was TG Mobile’s greatest strength, the 2G marketing campaign would be complete. Once they firmly established market leadership, they could begin membership marketing and value-added service campaigns.
“SPEED 010?”
“Yes, exactly!”
Once Yoo Jae-won spelled it out plainly, Lee Yong-kwon understood at once. He repeated “SPEED 010” several times, his voice growing louder each time. Having overcome numerous difficulties while launching the unfamiliar mobile business within the TG Group, Lee Yong-kwon had reached expert level. Thanks to that, he could fully appreciate the appeal contained in both the meaning and the sound of “SPEED 010.”
The discussion about identification numbers ended there. TG Mobile would advocate for the unified 010 rather than its own unique identifier, and would also prepare marketing under the name SPEED 010.
“Oh, right—how many Tiffany Phones should we prepare?”
“Just a moment!”
The last remaining matter was the Tiffany Phone. There was no better marketing method than seizing the market from the start. In an uncharted field the outcome might be all or nothing, but in a sector where success was virtually guaranteed, such as mobile communications, it was best to launch aggressive marketing even during the pilot phase.
“Hmm, how about a thousand units?”
After a brief silence, Lee Yong-kwon named the number. Yoo Jae-won could not help but question it.
“A thousand?”
The figure was vastly different from what he had expected. The units themselves did not match. Yoo Jae-won had been thinking in tens of thousands; Lee Yong-kwon was thinking in thousands—and the smallest possible number at that. Naturally, Yoo Jae-won was taken aback.
“Ah, I don’t mean we’re only buying a thousand Tiffany Phones. I mean that for this pilot service alone, a thousand should be sufficient.”
There were plenty of people hoping to subscribe to mobile service. Korea’s economic growth rate was consistently maintaining a formidable level in the high six percent range. The construction sector was perpetually green-lit, churning out entire cities in the blink of an eye, and new residents flooded into those new towns, instantly forming commercial districts. The manufacturing sector was also posting record sales growth. From traditional steel and cement to the automobile industry that influenced large-scale manufacturing, everything was soaring. Mirae Motors was updating its production figures, and the Ilsung Motors plant being built in Busan was nearing rapid completion. Ilsung had not even begun production yet, but reservations already exceeded several thousand units. To break through the solid market shares of domestic automakers like Mirae and Daeho, Ilsung was running bold promotions and causing a sensation in the PK region. They had only begun construction of the plant last autumn, yet reservations were already pouring in. In its early days Ilsung had imported all parts from Japan and merely assembled them, yet even so, such speed had been unimaginable. Just as the economy was growing steeply, the scale of business was expanding, and demand for mobile service was rising accordingly.
“The government plans to allocate roughly five thousand subscribers to each carrier for the pilot service.”
There was a special reason. The government intended to limit the number of mobile users and conduct a thorough environmental assessment. At the same time, they would examine compatibility issues with existing systems. The goal was also to check for interference or malfunctions among the numerous wireless devices and to ensure there were no problems with military communication networks; hence the subscriber cap.
According to TG Mobile’s own survey, about twenty percent of the five thousand subscribers were expected to choose the Tiffany Phone, so Lee Yong-kwon had decided to order a thousand units based on that data.
“Hmm.”
Yoo Jae-won fell into brief thought. A thousand units was enough for a single production run. Major components such as modem chips, LCD panels, and dial pads could be ordered from suppliers in lots of one thousand. Yet that did not sit well with him. They needed to make a powerful first impression. Naturally, the Tiffany Phone boasted the highest performance and the most sophisticated design among the newly released 2G handsets—and it was priced accordingly. The final supply price had been set at 500,000 won per unit in Korea, or 650 dollars in the United States. A basic PCS phone with only voice capability and no screen cost in the mid-100,000-won range, while models with a large-pixel black-and-white LCD capable of displaying text and an address book—but no games—started in the low 200,000-won range. Price alone could not surpass the competition; they had to demonstrate superior technology. That was how they would firmly claim the premium phone segment. To do so, they needed public recognition, and that required showing the device to as many people as possible.
“Then, limited to the pilot service period, we’ll supply them at cost. In exchange, provide the Tiffany Phone to all five thousand subscribers.”
After running the numbers, Yoo Jae-won chose a bold bet.