Top 3 Korean Telecommunication Companies: A Rare Look into their Strategies and Competition

Top 3 Korean Telecommunication Companies: A Rare Look into their Strategies and Competition

Korean market for smartphone grows rapidly

The mobile environment in Korea has been developing for quite some time now. The distribution rate of cell phones have always been extremely high, and various attempts have been made for mobile service. The contents market such as mobile game, call-waiting tones, and background image earned meaningful results. And it shows quick adaptability to smartphone environment that is recently receiving global attention.

The development of increase in the number of new smartphone users in Korea

Cell phone users in Korea are 51,963,001 (the end of August 2011) and since March 2010, it exceeded the distribution rate of 100%. The number of new smartphone users grew quickly after the launch of the iPhone, and is quickly approaching twenty million users. Right now, the weight of smartphone sales in the whole cell phone market is about 82%.

Infrastructure tows the market growth

There are several reasons for why the Korean mobile market responds quickly and grows. As ultrahigh speed internet became popularized early and the distribution rate of PC grew higher, web services have been already developed. The fact that Samsung Electronics and LG Electronics, which are the world-class cell phone making companies, are Korean companies had some effect on it.

Another reason is that there is the concentrated population in the capital area. The end of 2010 as the basis, the population in the capital area in Korea is about 23,616, and it takes up approximately 49% of the entire population. Since population is concentrated on a certain region, it's easy for choice and focus regarding investment on infrastructure and marketing.

There aren't many places like Korea, which is appropriate for test beds for new network infra. Since we have conditions like this, construction of new infrastructures like LTE, WiMax (Wibro), Wi-Fi, NFC, RFID is fast, and the amount of content consumption and application service due to this developed naturally.

New challenge to 4G

There are three telecommunication companies, SKT, KT, and LG U+, in Korea. These three companies have their own characteristics and strategies, compete against each other, and develop there on after. Recently, 4G commercialization is the main topic for these companies. SKT launched its LTE test frequency at 2 A.M. on April 16th, and LG U+ at 4 A.M., just two hours later. This was a neck-and-neck race that changed "the first in Korea," with a difference of two hours.

SKT has been leading the market as it announced LTE payment system and began the sales of Samsung "Galaxy S2 LTE," the first LTE smartphone in Korea, on September 28th. SKT has a strategy that focuses investment on LTE on the capital area and adjusts the balance with 3G. LG U+ is trying to reverse the atmosphere of the whole market through LTE. It has the determination to take the leadership in the LTE realm by covering the national network, even though it trails behind SKT’s initial release in terms of commercialization.

KT, which is even a bit later than its competitions in the LTE race, would be the first to take action through Wibro. The number of 4G Wibro members, which was 365,000 at the end of the last year, reached 642,000 now, increasing 75.9% (277,000) during nine months.

Telecommunication companies that dream of leaping to be media companies

Korean telecommunication companies try to take a leap as media companies instead of simply remaining as network business. Recently, SKT moved the department of contents and platform business to 'SK Planet,' beginning to make full-scale investment. SK Planet will operate NateOn, Korea's number 1 messaging service, Cyworld, Number 1 in SNS, 11th St., online shopping mall, T Map, which is map service, and 'T Store,' which is an app store. T Store is a distribution platform that is counted to be having 9.2 millions of recent members, accumulated sales of 32 millions, and 0.17 millions of the registered contents.

KT, which fell behind SKT in the field of media, introduced iPhone for the first time in Korea, playing the service strategy centered on app. It is aggressively developing mobile applications such as Olleh map, Olleh navi, Olleh talk, Olleh music, and applications only for smart pad such as Olleh kindergarten and Olleh magazine. LG U+ is entering new service that combines SNS and LBS such as Waggle, placebook, and Dingdong.

Competition is enjoyable. Competition makes more for a developing environment

KT, LG U+ , SK Telecom, these three telecommunication companies are having extremely fierce competition in construction of new network, design of payment system, and marketing. This kind of competition naturally becomes a profit for consumers. The reason for unlimited payment system, decrease of basic fee, construction of LTE network, and smartphone service to get built fast and made is due to all this competitive system.

One regrettable thing is that since corresponding speed is made as the priority in the fast-changing environment, there are no permanence in service and no investment for basic technology. Also, the fact that there is no successful case in foreign market in this kind of global era seems to be an assignment that Korean telecommunication companies should solve eventually.

cheonjiin  

 the author by Seung Yul Kim