This article was published in Korea Communication Review magazine (KCR Q1 2015). 

For the rest of the Q1 2015 issue of Korea Communication Review magazine please click here

The 'giga Internet era' has just begun, finally offering speeds of 1 Gbps - 10 times faster than the 100Mbps. For the past 7 ~ 8 years, the maximum Internet speeds for all access networks (FTTH, LAN and XDSL) have long been 100Mbps. So, when LTE-A (CA: 150Mbps) was launched in 2013, and when Wideband LTE-A (225Mbps) was released in June 2014, it was shameful for the wired Internet to be helplessly outpaced by the wireless Internet.

Last May, the newly appointed Chairman Chang-gyu Hwang of KT presented a vision of ‘GiGAtopia’ aimed to drastically accelerate wired/wireless access from 100Mbps up to 1Gbps. On Oct. 20, KT, as the first step of realizing the vision, commercialized the nation's first giga Internet service, soon followed by its competitors, SK and LG U+, in Oct. 30 and Nov. 30, respectively.    

• Gigabit Internet services by the Big 3

Speed: All three offer both 1Gbps and 500Mbps Internet access, and 100Mbps (existing service) and 500Mbps/1Gbps (new giga Internet service) for UTP and fiber subscribers. Only KT offers 500Mbps service (G.hn-based) to phone line subscribers (existing VDSL subscribers).

Price Plans: All offer fixed rate plans. With 3-year commitment, W30,000 for 500 Mbps and W35,000 for 1Gbps, which are respectively W5,000 and W10,000 more than the existing 100Mbps. Each offers different discount rates for bundling with phone, IPTV, etc. (see their websites for details).

Fair Usage Policy: To control heavy users' oligopolistic usage of bandwidth, all three impose a speed restriction of 100 Mbps on heavy users whose daily usage reaches 100 GB, for the rest of the day.

Bundled Plans: KT and LG U+ offer free 500Mbps giga Internet service for mobile service subscribers (with 2 or more mobile service plans). SK also plans to offer a similar promotion soon.  

Giga ONT specification: For FTTH, ONTs are introduced at home. Recently-released ONTs support 1Gbps, and Internet speeds can be easily upgraded to 500Mbps or 1Gbps simply by switching the setting to ONT or OLT. Of course, those released earlier must be replaced by new ONTs. KT and SK use a type of ONT that has 4 GE ports (UTP), connecting to up to 4 PCs. To each PC, a public IP is assigned (bridge mode). For now, installation of a separate AP is required on this type of ONT to use giga WiFi service. But, a giga WiFi-ready ONT is under development, and expected to be available for home installation in 2015.   

Additional services: Giga Internet service subscribers of the big 3 can use giga WiFi service (802.11ac, 300Mbps), with or without charge, depending on the package they selected. KT and SK are working on development of the commercial service version of a giga WiFi AP for home users, which is expected to hit the market in early 2015.  

• How did the market react?

KT, who commercialized the service first back in Oct. 20, has been gaining customers fast. The company said at the 'Network KOREA 2014 Workshop' held on Dec. 12, "When we began the service, our goal was to attract 50,000 new customers by the end of the year. But, the number reached 30,000 in just one month, and 93,000 in 8 weeks. And it is predicted to exceed 100,000 by the end of the year."

Although marketing for the service has been done on restricted service areas only since its release in Oct., the subscription for the service was more than 6 times the monthly average of the existing non-giga Internet service.

• What to do now?

KT said, "Since the release of the giga Internet service, there has been increase in average traffic of our services. 500Mbps GiGA Compact subscription was twice as much, and 1Gbps GiGA Internet subscription was 6 times as much of the 100Mbps subscription." The subscription growth for the giga services and the resulting traffic increase have been much stronger than anticipated. In response, KT is planning to increase the network capacity. Particularly, because quite a lot of OLTs have still 1GE or 2x1GE in UL, investment for upgrading to 10GE should be made. The company's competitors, SK and LG U+, are facing the same issue as well.

And the other thing is that both Internet and IPTV traffic are delivered to the access or backhaul network, through the same link, and this is the case for all three operators. As a result, Internet traffic speeds can be badly affected in some areas, dropping far below 1 Gbps, because of the IPTV traffic with higher QoS. So, additional investment to address this issue should be followed as well.  

So far, giga Internet has not presented any captivating killer application yet. Instead, it has been appealing to users through mere speed competition, giga WiFi service, offering quality video for home users with multiple IPTV services, etc. The Big 3 are currently focusing on R&D to introduce new killer applications of giga Internet, and are expected to present new giga Internet-based services next year.