South Korea has a strong telecommunications network and due to government intervention in the early stages, there is high degree of competition. Growth in the telephone network was mainly due to fixed lines in the 1990s. After a slow introduction, mobile subscribers passed the number of fixed-line in 2000 following which fixed-line subscriptions reached a plateau and then started to steadily decline going back to 1995 levels by mid 2010.
During the same 10 year period leading to 2010 the number of mobile subscriptions doubled to pass the 100% penetration mark, a level not deemed possible back in 1990. 3G was starting to gain traction and a significant portion of subscribers had already switched to the offering in order to make optimum use of the new applications. The growth of broadband and the introduction of VoIP services reduced the demand for fixed-line telephony services, putting KT in a position of having to recoup revenues from mobile and other value-added services.
Fixed-mobile convergence opportunities have accelerated. During 2009 and 2010 KT merged with KT Freetel; LG Telecom merged in the operations of LG Dacom and LG Powercom; and SK Telecom and SK Broadband exhibiting strong ownership ties creating in effect a third full-services operator. These new market dynamics are coupled with plans by South Korea to inject up to KRW 1.7 trillion (US$ 1.4 billion) in the next five years in a bid to become one of the top five leaders in the information technology (IT) convergence sector.
The government is pushing ahead with plans for South Korea to show a leadership position in technologies such as WiBro in its home market which can then be exported to emerging countries. In addition the market has been opened to allow telecommunications companies to offer broadcasting through IPTV solutions.
This results in an exciting industry that is backed by heavy investment from the government and private sector in many areas of solution and content development.
See BuddeComm reports on: South Korea
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