This report provides a comprehensive overview of the trends and developments in telecommunications and digital media markets in South Korea. Subjects covered include:-

Key Statistics;
Market and Industry Overviews;
Regulatory Environment;
Major Players (fixed and mobile);
Infrastructure;
Mobile Voice and Data Markets;
Internet, VoIP, IPTV;
Broadband (FttH, DSL, LAN, wireless);
Convergence and Digital Media.
The report also contains material on the North Korean market; however, given the considerable difficulties involved in getting information on that market, the report can only offer a limited overview, including what few statistics are available or can be estimated.

1. NORTH KOREA
1.1 Key statistics
1.2 Telecommunications market
1.2.1 Overview of North Korea’s telecom market
1.2.2 Market analysis
1.2.3 Relationship with South Korea and the world
1.3 Regulatory environment
1.3.1 Foreign investment
1.4 Fixed network operators
1.4.1 Lancelot Holdings
1.4.2 Loxley Pacific (Loxpac)
1.4.3 KT Corporation
1.4.4 Shin Satellite Corp
1.5 Telecommunications infrastructure
1.5.1 National telecom network
1.5.2 International
1.6 Internet market
1.6.1 Overview
1.6.2 Internet Service Providers (ISPs)
1.6.3 Websites
1.6.4 Email service
1.6.5 Voice over Internet Protocol (VoIP)
1.6.6 Internet cafes
1.7 Mobile communications
1.7.1 Overview of North Korea’s mobile market
1.7.2 GSM
1.7.3 CDMA
1.8 Broadcasting
1.8.1 Overview
1.8.2 TV stations
1.8.3 Cable TV
1.8.4 Satellite TV
2. SOUTH KOREA
2.1 Key statistics
2.2 Telecommunications market
2.2.1 Overview of South Korea’s telecom market
2.2.2 Competitive market
2.2.3 Fixed-line and mobile services
2.2.4 Telecommunications service markets
2.2.5 Market highlights and analysis – 2007
2.2.6 Market highlights and analysis – 2006
2.2.7 Market highlights and analysis – 2005
2.2.8 Market highlights and analysis – 2004
2.2.9 Market highlights and analysis – 2003
2.3 Regulatory environment
2.3.1 Overview
2.3.2 Ministry of Information and Communication (MIC)
2.3.3 National Internet Development Agency of Korea (NIDA)
2.3.4 Korea Communications Commission (KCC)
2.3.5 National Computerisation Agency (NCA)
2.3.6 Korea Broadcasting Commission (KBC)
2.3.7 Master plans for an information society
2.3.8 Deregulation
2.3.9 Privatisation of Korea Telecom (KT)
2.3.10 Licensing
2.3.11 Ownership rules
2.3.12 Number portability (NP)
2.3.13 Highlights – Year 2007
2.3.14 Highlights - Year 2006
2.3.15 Highlights - Year 2005
2.3.16 Highlights - Year 2004
2.3.17 Highlights - Year 2003
2.4 Major fixed-line network players
2.4.1 Overview
2.4.2 KT Corp
2.4.3 Dacom Corporation
2.4.4 Hanaro Telecom
2.4.5 Onse Telecom
2.5 Telecommunications infrastructure
2.5.1 Overview of infrastructure developments in South Korea
2.5.2 Next Generation Network (NGN)
2.5.3 Major national infrastructure players
2.5.4 Fibre-to-the-Home (FttH)
2.5.5 Broadband over Powerline (BPL) / Powerline Communications (PLC)
2.5.6 IPv6
2.5.7 IP-Virtual Private Network (IP-VPN)
2.5.8 Voice over Internet Protocol (VoIP)
2.5.9 Apartment LANs
2.5.10 National submarine cable infrastructure
2.5.11 International submarine cable infrastructure
2.5.12 Satellite infrastructure
2.5.13 Data communications
2.5.14 Regulatory issues
2.6 Broadband and Internet market
2.6.1 Internet market
2.6.2 Broadband market
2.7 Convergence
2.7.1 Overview of media convergence
2.7.2 Triple play models

North Korea
The development of the telecommunications sector in the Democratic People’s Republic of Korea (DPRK) is seriously impeded by the country’s parlous economic state and government repression of communication. It has been a difficult journey indeed for telecommunications in the DPRK. Though mobile services finally began in the capital Pyongyang in 2002 on a limited scale, North Korean citizens were banned from using mobile phones as of May 2004.

North Korea’s obsession with secrecy has made it extremely difficult to get a clear picture of the sector. (In the absence of official statistics, we have made estimates in the report where we can.) The announcement in February 2005 that the DPRK had some form of nuclear weapons was likely to further prevent the flow of useful telecom technologies and expertise into the country, as well as ensuring that the country remained isolated from the rest of the world. Recent talks to resolve this situation involving nuclear arms development had reached a level of agreement, but there remained much work to be done before serious and significant engagement with North Korea can take place.

For the country overview see chapter 1, page 1.




South Korea
Supported by a visionary government, a creative and energetic private sector and a technology savvy population, South Korea has one of the most interesting and innovative telecommunications markets in the world. The Republic of Korea has proven itself a leader in many facets of the telecommunications industry. After years of progress, the country continues to push ahead. According to a report by the International Telecommunication Union in early 2007, Korea had topped the global list of countries in the ITU’s Digital Opportunity Index for the second consecutive year, confirming its status as an IT and telecoms powerhouse. For more information, see chapter 2.2.1, page 17.

South Korea has the highest number of broadband connections per capita in the world. By early 2007, broadband subscriber penetration was running at 30% of the population; or, put another way, 90% of all households had broadband access as the broadband market in country was reaching near saturation. The much anticipated launch of WiBro services (South Korea’s locally developed version of WiMAX) in 2006 certainly did not meet expectations, despite substantial investment and effort by the service providers. The general feeling was that to launch such a service while a choice of suitable handsets was not available was a premature move.

The South Korean mobile market, which continues to look like it has reached a point of saturation, again found a way to grow by a further 5% (in subscribers and revenue) in 2006 and this growth pattern was continuing into 2007. Mobile penetration was around 85% in early 2007, the majority of services being new generation. Not surprisingly, the country continued to be considered a leader in Third Generation (3G) mobile technology. WCDMA, the second 3G standard to enter the South Korean market after CMDA2000, became commercially available in December 2003, though the service had failed to attract a significant number of subscribers. There was increasing interest in the task of upgrading the 3G networks using HSDPA technology, sometimes described in the industry as 3.5G. Both SK Telecom and KTF launched their HSDPA services in 2006. This seems to be the new service offering the market had been waiting for. It effectively did what WiBro was meant to do. With the launch of HSDPA 3G services by SK Telecom and KTF, the mobile market was given a significant boost. By June 2007, there were 1.6 million customers on the upgraded WCDMA networks. For more information, see chapter 2.8.1, page 94.

Satellite-based Digital Media Broadcasting (S-DMB) was moving in a positive direction coming into 2007. TU-Media, a subsidiary of SK Telecom, claimed to have signed up 950,000 S-DMB subscribers by end-2006. In other words, the subscriber base has increased by about 100% in 2006. Even more importantly, the operator reported that the average TV viewing time per subscriber was running at 62 minutes per day. This was a much higher usage rate than in other markets.

For the country overview see chapter 2, page 16.

Key Highlights
South Korea’s mobile market continues to expand both in subscribers and revenue. By early 2007, there were 41 million subscribers (penetration 85%) and the annual growth was around 5%.
The launch of HSDPA 3G services by SK Telecom and KTF has provided a significant boost to the mobile market. For more information, see chapter 2.8.8.4.4.1, page 105.
By June 2007 there were 1.6 million customers on the upgraded WCDMA networks, this segment of the market having been revitalised with the higher speeds on offer.
South Korea has also seen increased ARPU in the mobile sector as the operators promote value-added services and customers respond enthusiastically.
In 2006, for example, mobile market leader SK Telecom had increased its blended ARPU by 13% to US$49.3 per month by year-end.
Total revenues in the mobile sector topped US$20 billion in 2006, up by around 18% on the previous year; the trend was continuing into 2007.
The launch of WiBro services (South Korea’s locally developed version of WiMAX) in 2006 has not met expectations, despite substantial investment and effort by the service providers.
By early 2007, there were only a handful of WiBro subscribers. The consensus was that this market would not move much until more appropriate handsets are available. For more information, see chapter 2.6.2.5.8.4, page 74.
In early 2007 the government was preparing legislation to cover IPTV; while the government remained committed to the convergence of the telecoms and broadcasting sectors, it was facing stiff opposition from these two competing industries.
Satellite-based Digital Media Broadcasting was moving in a positive direction coming into 2007. TU-Media, a subsidiary of SK Telecom, claimed to have signed up 950,000 subscribers by end-2006. In other words, the subscriber base has increased by about 100% in 2006. For more information, see chapter 2.8.6.8.1, page 130.
Even more importantly, the TU-Media reported that the average TV viewing time per subscriber was running at 62 minutes per day. This was a much higher usage rate than in other markets.
South Korea - Overall mobile ARPU by operator - December 2006

Operator ARPU/month (US$)
SK Telecom 49
KTF 34
LG Telecom 39
Total market 42

(Source: BuddeComm based on company data)



Key Indicators - South Korea versus North Korea - 2006

Indicator South Korea North Korea
Population 48.3 million 23.1 million
GDP at current prices (e) US$888 billion US$24 million
GDP per capita (e) US$18,400 US$1,000
GDP real growth rate (e) 5% 2%
Infant mortality rate 6.2 per 1000 23.3 per 1000

(Source: BuddeComm)
Note: information for North Korea is estimated

Data in this report is the latest available at the time of preparation and may not be for the current year.