Korea promised 10Mbps wireless internet

Although HSDPA and WiBro appear to be in direct competition, Korea Telecom downplays the possibility of a price war, and said that it might eventually offer HSDPA services itself.

"It is possible that WiBro and HSDPA will overlap in user coverage," Hong Won-pyo, Korea Telecom's vice president, said last week. "But the merits of WiBro - fast data transmission speeds - and HSDPA advantage in mobility could complement each other."

To ensure that the new services take off quickly, Korea's Ministry of Information and Communication is encouraging mobile operators, such as Korea Telecom and SK Telecom, to offer subsidies of up to 40 per cent for buyers of WiBro and HSDPA-compatible smartphones and PDAs.

The Korean government hopes to see 10 million Korean households using WiBro within five years.

The early adoption of next-generation city-scale wireless internet services should fuel a wireless boom for Korea's manufacturers that will continue until at least 2008, analysts say.

For example, Samsung's sales of WiBro-equipped handsets, PDAs and notebooks are predicted to see rapid growth from the end of this year, and to exceed two million units globally in 2008.

Samsung will provide network equipment and handsets for a WiBro network in Venezuela, and has signed trial WiBro contracts with telecoms operators KDDI in Japan, Telecom Italia, Sprint and BT, according to Korea Investment and Securities.