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South Korea Telecommunications Report Q2 2011
Business Monitor International, April 2011, Pages: 81
Business Monitor International's South Korea Telecommunications Report provides industry professionals and strategists, corporate analysts, telecommunication associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on South Korea's telecommunications industry.
In this quarter’s update of the South Korean telecoms market BMI has provided the latest published data by the three major operators – SK Telecom, KT and LG Uplus – for the mobile market ended December 2010, as well as for the fixed-line, internet and broadband markets as provided by operators and the Internet Statistics Information System (ISIS). This has enabled BMI to review and update, where appropriate, forecasts for all sectors in this report.
The biggest challenge in 2011 will be the introduction of MVNO services, expected to be launched in July. There are already about six operators licensed to provide MVNO services. However, they are meeting resistance from some national mobile operators such as SK Telecom. The mobile market leader remains concerned over the impact this may have on price plans in the market, increasing tariffs further when they have already been lowered. That said, KT signed MVNO agreements with three companies and this is expected to enable the operator to acquire a new revenue stream.
SK Telecom and KT are expected to both compete by offering Apple’s iPhone handset, after it was reported in March 2011 that SK Telecom would start offering the handset. Although price plans between the two operators are not expected to differ much, SK Telecom aims to win a greater customer following by providing excellent customer services such as offering to replace faulty handsets in the first week of purchase.
Smartphone handsets are driving demand for data services in South Korea, and according to one local report, there were understood to be about 10mn smartphone users at the end of 2010. This represents an increase of about 35% from 7.2mn units in the previous year. In addition to this, unlimited data services are the reason for increased demand in mobile internet services and this brought about greater demand for smartphone handsets.
There were a total of 42.070mn 3G subscribers at the end of 2010 and they accounted for 82.9% of the total mobile population, which was up from 70% in the previous year. BMI forecasts demand for 3G will continue and that by the end of the five-year forecast ended 2015 there will be close to 60mn subscribers and a penetration rate of almost 121%.
Meanwhile, South Korea dropped to fourth place from third in Asia’s latest Business Environment Ratings table. The fall in the quarter was the result of its Industry Rewards and Country Rewards scores. As a result, it fell behind Australia (in third place from fourth) while Singapore and Japan maintained their respective positions in second and first place, respectively.
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