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Mobile evolution: Latest trends of Korean mobile market and its movement
- 1. Mobile evolution:
Latest trends of Korean mobile market and its movement
Changan CHOI
Market Adviser, IN Seoul office
INBDP Market Report
related to wireless future and Mobile Monday
Seoul Office, Copyright © 2006 Innovation Norway. All rights reserved.
- 2. Table of Contents
II. Introduction: success or delemma?
II. Mobile phones: more than PC
III. Maturity of mobile network: next runner, 3G network
IV. Mobile media: new trials, failures and successes
V. Mobile payment: crossing the chasm
VI. Business use of mobile Internet
VI. Industry structure and new challenges: mobile evolution
1/56
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- 3. I. Introduction: success or delemma? Korean Mobile Market
Korea has done a great job for the last decade! The highly unbalanced development, however, weighted
onto certain areas is now pulling its back from going ahead for further/continuous growth in the future
Success?
ICT industry
ma??
r/and dilem
o Too much dependent on
USD 287.7 bil (p) in 2007
Hardware
35% out of total export
Network infra. services
40% contribution to GDP growth
Technology-driven
- 16% of total GDP
Network infra.
No. 1 ICT product lines
Mobile
DRAM – 45.1%
HSDPA, Wibro, DMB
Balanced onto
Mobile phone – 24.7%
90% mobile users
LCD – 46.5% Software
Internet broadband:
PDP – 54% Application services
91% in 2006 <- 70% in 2002
Flash Mem – 41.1%
(Norway: 61% <- 10%) Practical/society use
…
World’s highest avg. speed
1/36
Seoul Office, Copyright © 2006 Innovation Norway. All rights reserved.
- 4. I. Introduction: success or delemma? Korean Mobile Market
As Korean mobile market players are making new trials balanced onto services and applications, they are to
face, are facing or faced challenges of bridging users from their innovative uses to practical ones in daily lives
Chasm theory
Geoffrey A. Moore 1991
Coverage of this report
Customer value
Mobile solutions in Korea
innovative Practical
Mobile Phone
Mobile Media
Revenue drop!
Mobile Payment
Source: Crossing the chasm, Geoffrey A. Moore 1991
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Seoul Office, Copyright © 2006 Innovation Norway. All rights reserved.
- 5. II. Mobile phones – more than PC Korean Mobile Market
Mobile users are very active in using multimedia phones such as camera and music, and a recent survey says
that they are moving toward more use of smart phone styles overtime, which has been very small in Korea
Functional popularity of mobile phone Anticipated killer applications in 2009
Strategic targets
Premium
for the coming years!!
Smart phone
Camera function Open OS
about 5% (2008)
90% (2007)
Touch Screen
Ultra low cost
Source: Allux, 2008
Priority in preference for touch phone purchase
Cf.: most of touch phone is Win CE based smartphone
Voice conference
Multimedia High resolution camera: 19.8%
function 30% (2008)
&music function
MP3/VOD multimedia: 17.4%
70% (2007)
Internal/embedded memory size: 11.7
Mobile TV/DMB: 11.2%
Multi-tasking: 9.2%
Video conf. Call: 7.7%
Source: Naver KM, etnews, i-news, 2007, 2008
Source: Survey by ARG, 2008
3/36
Seoul Office, Copyright © 2006 Innovation Norway. All rights reserved.
- 6. III. Maturity of mobile network – next runner, 3G network Korean Mobile Market
After its launch in early 2007, WCDMA based 3G service has been growing very rapidly mostly thanks to big
subsidies both from government and telecom players – currently 1/3 of total mobile users
Total number of mobile subscribers Unit: thousand
Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08
Year
Subscribers 38916.8 39382.5 39703.2 40197.1 41101.2 42319.8 42801.2 43497.5 44266.0 44982.8
!
d!
e
at CDMA vs. WCDMA
Penetration rate d
(as of June 2008)
up
be
Mobile users: 89.2%
To Now,
50000 14000
17,000
Mobile users: 44,982,823
(Jan.)
12000
40000
45,274,511(Sep.)
10000
30000
CDMA 8000
6000
20000
Commence
4000
in Feb, 2007
10000
WCDMA 2000
0
0
Feb Mar July June
1
June, 2008
Total population: 50,429,173 (exp)
2007 2008 2009
주석
3/36
Seoul Office, Copyright © 2006 Innovation Norway. All rights reserved.
- 7. III. Maturity of mobile network – next runner, 3G network Korean Mobile Market
From major stream of CDMA network until 2006, Korea has launched high speed mobile network services
including HSDPA, Wibro(Mobile WiMAX), CDMA 2000 Rev.A. And, it is said that no. of 3G subscribers will pass
the no. of 2G subscribers within this year, 2009
Major Players in Korea Make-up of mobile network
(2008.6) (2009.1)
launched
in 2006
HSDPA
LGT
(WCDMA)
18%
About 36%
KTF
launched
31%
in 2006
CDMA Rev.A
CDMA(2000),
about 1.4%
PCS
SKT
51%
about 62% launched
in 2006
Wibro*
about 0.6%
* Source: Wibro = Mobile WiMAX Source: SKT, KTF, LGT and KCC combined, 2009
4/36
Seoul Office, Copyright © 2006 Innovation Norway. All rights reserved.
- 8. III. Maturity of mobile network – next runner, 3G network Korean Mobile Market
With Wibro covering the Seoul metropolitan area, HSDPA covers most of residential area in S. Korea.
Recently, market leaders are seriously considering the combined service with these two, taking advantages
from both of them
Wibro(mobile WiMAX) major coverage HSDPA national-wide full coverage
Residential area for 45% of total population
Plus
major universities
and hot zones
in other provinces
No. of
Players Main coverage
Subscribers
KT 190,000 National capital area
SKT 3,400 55 hot zone in 44 cities
Source: KCC, 2008 Source: KAIT, 2007
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Seoul Office, Copyright © 2006 Innovation Norway. All rights reserved.
- 9. IV. Mobile meida – new trials, failures and successes Korean Mobile Market
Mobile media in Korea can be broken down into three major categories such as online, offiline and
broadcasting, followed by 6 sub categories as following below
Intr.:
unrestricted Internet access
Web browsing
just like Web browsing at PC
Online
Case:
OZ by LGT (CDMA Rev.A)
SKT FB, limited (HSDPA)
WAP* browsing Prospect: market leaders are facing an obligation
to open its service and network based on open
Mobile Media architecture, which gets popular overtime
Intr.:
restricted Internet access
Client SW
through WAP* gateway
Offline
Case: closed telecom portals
SMS providing ringing tones, music,
VOD, gmes, information, etc. -
Nate (SKT), Magic-N (KTF)
DMB/DAB Ez-i (LGE)
Broadcasting
Prospect: as being forced to open
3G (WCDMA, Wibro) wireless network and in response
to strong demand for WB, WAB
browsing will apapt open access
more and more
* WAP: Wireless Application Protocol
6/36
Seoul Office, Copyright © 2006 Innovation Norway. All rights reserved.
- 10. IV. Mobile meida – new trials, failures and successes Korean Mobile Market
Mobile media in Korea can be broken down into three major categories such as online, offiline and
broadcasting, followed by 6 sub categories as following below
Intr.:
on-deman contents update
Web browsing
through the downloaded client
Online application SW
Prospect: this type of services
are developed with M2M
services using USIM chip
Case:
WAP browsing 1. Frontpage and WAP page link - mobile video, Magazine,
newspaper, public trans. info, membership service,
Mobile Media financial service (stock, banking, credit card, etc.), ticket
reservation, online game, public service reservation
2. Stand-alone: mobile game, anti-mosquito, etc.
Client SW (VM) Intr.:
Short message service
Offline
SMS Case:
1. notification: confirmation on
payment, ticket, reservation, etc.
simple AD, alerm, gifts, etc.
DMB/DAB 2. fishing to WAP page: gifts, AD
Broadcasting 3. SMS/MMS-ticket:
text or barcode
3G (WCDMA, Wibro)
Prospect: SMS is well awared by
users and will be developed
together with M2M services
7/36
Seoul Office, Copyright © 2006 Innovation Norway. All rights reserved.
- 11. IV. Mobile meida – new trials, failures and successes Korean Mobile Market
Client SW (VM)
Stand-alone Partial online Online
Server Server Server
Updates
Download Download Download,
once for all once for all connected to
the Net
Live skin
Ring tone, music
Bus, Subway
Mobile game Credit Telecom
Banking
Server Taxi, Cultural centers,
Card
Convenient store,
E-Mail, chatting SW Internet cafe,
Download
Vending machine,
Stock, lottery, Top-up/refill
USIM Public parking lot,
Online malls, etc.
banking, T-money
Location based services News
Server
Server Detail request/
Additional chrge
VOD, Magazine, News SW
Download
Reading
Mobile shopping Daily update/
USIM
early morning
8/36
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- 12. IV. Mobile meida – new trials, failures and successes Korean Mobile Market
As of Feb, 2009
8.1 million 7.0 million
8.5 million
Accumurated Accumurated
Accumurated
download download
download
Hit games: 6~7 month -> 3~4 month, Million downloads
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Seoul Office, Copyright © 2006 Innovation Norway. All rights reserved.
- 13. IV. Mobile meida – new trials, failures and successes Korean Mobile Market
?
el?
od
m
it
of
r
Daily update:
P
Auto/manual
10/36
Seoul Office, Copyright © 2006 Innovation Norway. All rights reserved.
- 14. IV. Mobile meida – new trials, failures and successes Korean Mobile Market
SMS
Notification: Spam/virus/crime -> regulation -> new business model?
confirmation on your payment, ticket,
SW
Server
reservation, Simple AD, alerm, gifts, etc. download server
request
SMS/ request
or
fishing
Fishing to WAP page: WAP
access
page
Gift – ring tone, music, bg. screen, ect.
AD – mobile game, VOD & photos,
PR event, etc.
MMS
Web
Reservation/ Server
page
payment
SMS/MMS ticket, coupon: App. SW
MMS/
Info.
Barcode
Text type Screen
User or
WAP Pass/
Barcode type Reservation/ page reader
payment RF
USIM
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Seoul Office, Copyright © 2006 Innovation Norway. All rights reserved.
- 15. IV. Mobile meida – new trials, failures and successes Korean Mobile Market
MMS event
MMS coupon
SMS event
Musical message
or logo song
Ring tone/ Biz ring.. 2
1
call
3
You can listen to the logo song or any sort of musikal message
when you make a call or receive a call
12/36
Seoul Office, Copyright © 2006 Innovation Norway. All rights reserved.
- 16. IV. Mobile meida – new trials, failures and successes Korean Mobile Market
Mobile media in Korea can be broken down into three major categories such as online, offiline and
broadcasting, followed by 6 sub categories as following below
Web browsing Intr.:
mobile TV using DMB/DAB
Online
technology
Case:
Terrestrial DMB, Satellite DMB
TPEG* service
WAP browsing
Prospect: as 30% (15 mil.) of total population is using
Mobile Media DMB, it is expected to grow together with other
commercial services, such as TPGE, interactive services
through BIFS** technology and 3G network
Client SW Intr.:
realtime or on-demand mobile TV
Offline
service using 3G network such as
SMS
HSDPA and Wibro
Case: Nate(SKT), June (SKT), Fimm(KTF), ez-i
DMB/DAB miTV(LGT) - realtime terrestrial broadcasting, Cable TV,
Mobile TV, Home shopping, event/spotlighted program, etc.
Broadcasting
Prospect: as telecom players would get involved in the
3G (WCDMA, Wibro)
contents delivery and make more data traffic, flat fee or
discount fee based pricing models are coming out and
* TPEG: Transport Protocol Experts Group
will compete with DMB service in a way
** BIFS: BInary Format for Scenes
13/36
Seoul Office, Copyright © 2006 Innovation Norway. All rights reserved.
- 17. V. Mobile payment – crossing the chasm Korean Mobile Market
Mobile payment market is becoming a battle ground for different market players such as financial bodies like
bank, credit card companies, transportation card company, telecom players and payment portal providers
Relational map between mobile payment market players
Users
Financial bodies
Telecom
T-money
Payment portal
/transportation
Service providers
card
New technologies;
Smartcard, contactless(RF), Bluetooth, etc.
14/36
Seoul Office, Copyright © 2006 Innovation Norway. All rights reserved.
- 18. V. Mobile payment – crossing the chasm Korean Mobile Market
Despite its small size yet, mobile payment market is growing very fast, and more than half of mobile users
are registered or using mobile payments in their daily lives
Mobile payment market growth % of mobile payment users
Unit: thousand (%)
Unit: KRW* bill.
22,250 (51.9)
1400
(Est.)
Mobile Payment
1200
CAGR**: 29.3% 40% Users
1000
800
600
20,651 (48.1)
400
For statistical reason, this will be covered
by two different categories:
200
Mobile banking users
0
2002 2003 2004 2005 2006 2007
Handset payment users
Source: Mobilance, K-research, NIA(2007)
*Average foreign exchange rate : 1,035/USD 193.9/NOK (2008), 929/USD 158.8/NOK (2007), 955/USD 149.1/NOK (2006)
**CAGR: Compound Annual Growth Rate
15/36
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- 19. V. Mobile payment – crossing the chasm Korean Mobile Market
As taking 13.6% of the total Internet subscribers, mobile banking subscribers made 138.1 billion transactions
during the 2nd Q of 2008, and it is continuously growing
Mobile banking
Unit: thousand (%)
Mobile banking Internet banking during 2nd Q of 2008
- 21,990 thousand transactions (3.8% up)
- KRW 22,011.7 billion transaction (2.1% up)
-> 1.6 transaction with KRW 1.6 million per person
6,620 (13.6)
Mobile Mobile banking during 2nd Q of 2008
subscribers
- 978 thousand transactions (9.5% up)
- KRW 138.1 billion transaction (16.3% up)
Internet banking
Subscribed, but sleeping -> 0.14 transaction with KRW 20,846 per person
35,105 (69.6)
Transaction by number of cases
13,615 (27.0)
- ATM (42.9%) > Internet (24.4%) > Tele (12.6%)
Inquiry and information access
1,709 (3.4) - Internet (57.9%) > Tele (12.2%) > ATM (10.6%)
Actual users Source: BOK, NIA, 2007.6
cf.) Total population: 50,429 thousand, 2008.6
16/36
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- 20. V. Mobile payment – crossing the chasm Korean Mobile Market
Around 60% of survyed people have experienced different types of handset payments, and small amount
payment was the most popular type among the payments
Handset payment experience and intended ceilings
Frequency for use
Handset payment experience
Once
Once
for 3 months
Havn’t used it yet, for 2 months
Less than once 10%
but 30% of them has intention to use 8%
for 3 months
38%
40.9%
44%
More than once
per month
47.5%
intended ceilings
Subsitute for
8.0%
Small amount of
3.6%
Less than
USD 5~10
credit card payment online USD 5
More than USD 100 Don’t care
6%
6%
12%
23%
Public transportation
USD 50~100
13%
23%
17%
N=4272 Source: survery by K-research, etnews, 2008.6 USD 10~20
USD 20~50
17/36
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- 21. V. Mobile payment – crossing the chasm Korean Mobile Market
In the online contents market, a survey said that handset payment was answered to be the most popular
among others, where users had purchased mostly entertainment contents like music, movie, TV, games, etc.
Preferences for online contents payment; Payment usage for online contents;
less than USD 150~200 regardless of mobile payment, but it could imply future of handset payments
Music
70
Dual check answers
60
Movie, TV
50
40
News
30
Game
20
10
Community
0
Others
e-money(8.7%) Education
Gift certificate(9.7%)
Stock info.
Membership point(15.6%)
Banking(17.0%)
Others Dual check answers
ARS(33.5%)
0 10 20 30 40 50 60 70 80 90
Credit card(40.5%)
Source : NIA, KISDI, 2007.10 Source : NIA, KISDI, 2007.10
Handset payment(65.3%)
18/36
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- 22. V. Mobile payment – crossing the chasm Korean Mobile Market
Evolution and integration of all the
Half success with limited number of
Online contents payments are still previous services into USIM chip under
phones, financial bodies and franchise
used, being very popular WCDMA network
Timeline 2002~
Timeline Early 2000~ Timeline 2006~
Creditcard, banking,
Online game and transportation, Credit/checkcard, banking,
Usage Usage
community contents membership, online Usage transportation, membership,
contents online contents, stock, etc.
SMS, Web, CDMA
Tech.
network Smartcard, Bluetooth, Smartcard, RF, Bluetooth
Tech. Tech.
RF (integration all into USIM)
Reliance Telecom > PG
Reliance Telecom > financial Reliance Telecom =(?) financial
Security Low (USD 5~10 ceiling)
Security High Security High
Timeline 2001~( 2002), now
Open architecture for USIM
Timeline 2003~
Bank account inquiry, to telecoms, pie share
Usage
Issue between telecom and
(limited transfer) Usage Banking, transportation
financials, participation of
CDMA network, virtual Tech. Smartcard, RF, VM franchises, standardization
Tech. account, simple link bet.
Reliance Telecom = bank > PG
bank and telecom
Stage 3
Security High
Reliance Telecom > bank > PG
Security Low Survivial technologies
Stage 2
*PG: Payment Gateway solution provider
Note: this is only for the cases of normal mobile phones, because PDA
Stage 1 phone took advantaged of Internet payment services from early stages
19/36
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- 23. V. Mobile payment – crossing the chasm Korean Mobile Market
T-Money
Top-up/refill
Public transportation
Taxi
USIM
RF
Public transportation: Public bus
buying
Bus, taxi, subway
Subway
Retailers
convenient store, theater, both, bookstore, etc.
Public facilities
Local office, toll fee, parking, museum,
vending machine, telephone, ect.
Internet
Game zone
20/36
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- 24. V. Mobile payment – crossing the chasm Korean Mobile Market
mobile ticket/upgrade
RF ?by USIM
SMS ticket/train registration, inquiry, payment, postponement, cancel, ect.
SMS ticket/movie
21/36
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- 25. V. Mobile payment – crossing the chasm Korean Mobile Market
While there are many mobile payment trials by different market players outside of telecom territory, mobile
telecom leaders are paying huge investments in and very keen on taking the lead of this emerging market
Online payment
Credit card
Example: Membership
Transportation card
Ticket reservation
Banking
USIM based mobile payments
ID pass
Stock security
22/36
Seoul Office, Copyright © 2006 Innovation Norway. All rights reserved.
- 26. V. Mobile payment – crossing the chasm Korean Mobile Market
Example:
Other trials – not popular yet
Mobile
Home/TV SMS Mobile Creditcard
phone
Shopping link Internet Number fill-in
number
Online ticket Pass
E-Ticket
or Payment or
or
Purchasing Issuing
Barcode
Vending machine Payment
Toll gate, (mostly prepaid
Parking fee, e-money)
23/36
Seoul Office, Copyright © 2006 Innovation Norway. All rights reserved.
- 27. VI. Business use of mobile Internet Korean Mobile Market
Business use of mobile Internet in Korea can be broken down into three categories such as applications to
enterprise solutions, emails on the phone and SMS/MMS for business purpose as following below
Business Use
of Mobile Internet
Users reading email SMS/MMS
Applications to ERP or enterprise solutions
on phones for business purpose
Mostly, they redesign and develop their own applications for their specific purpose in this case
Business use of mobile Internet is very limited if they do not have full support from telecom players
Due to the limitation of adopting new applications, they use PDA phones to meet their technolgical requirements
Except for PDA, telecom players under the support of mobile makers are controlling the installation of applications and
its working on the phone
Thus, business players are using existing applications for different purposes if it is not in the PDAs or the smart phones
24/36
Seoul Office, Copyright © 2006 Innovation Norway. All rights reserved.
- 28. VI. Business use of mobile Internet Korean Mobile Market
Business Use
of Mobile Internet
Users reading email SMS/MMS
Applications to ERP or enterprise solutions
on phones for business purpose
Less than 5% of total mobile users (about 1 million in 2008) Cases
- enterprise email for management people mostly
Limited environments until the time
- government officers & staffs for their administration
- Mostly relying on PDAs or SmartPhones, prior to full
browsing service
Prospects: full browsing service will encourage users to use it
- not open architecture; only possible by installing client SW
and in-house or enterprise email solutions
- limited access to public/portal email accounts
- expensive; additional cost for subscription
25/36
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- 29. VI. Business use of mobile Internet Korean Mobile Market
Business Use
of Mobile Internet
Users reading email SMS/MMS
Applications to ERP or enterprise solutions
on phones for business purpose
Cases: Prospect: SMS is well awared by users and will be
1. notification: confirmation on payment, ticket, developed together with M2M services
reservation, etc. simple AD, alerm, gifts, etc.
2. fishing to WAP page: gifts, AD Issue of spam/junk message
3. SMS-ticket: text or barcode - 0.7 spam per day (2007), 2~3 spam per day
(2006)
- 70% of loan/financial, 15% of adultary, 6% of
game in order
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- 30. VI. Industry structure and new challenges – mobile evolution Korean Mobile Market
In the mobile service market, mobile telecoms have had a higher level and a wider range of control powers
over the related parties, but in the new environment of open architecture, its power will be weaken overtime
Users/Customers
DMB,
WWW TPEG
Open access
Broadcasters
Potals
supply
Carriers
Contents providers Intervene
Telecom /mobile telecom
portal
Bigger
Supply Subsidiary
100% dependency
nego.
Phone
Contents power
Phone manufacturers
Financial bodies manufacturers
providers
Intervene
Mobile ADs
Payment Gateway
Parts suppliers
Wireless Telecom
territory
Source: modified from ppt by LGT at IT conference, 2008
27/36
Seoul Office, Copyright © 2006 Innovation Norway. All rights reserved.
- 31. VI. Industry structure and new challenges – mobile evolution Korean Mobile Market
Players in the mobile market are being and are soon to be surrounded by new challenges and unfamilar
business environments in the near future, where they have to compete and survive to success
Integration between wired
Government Intervention
and wireless telecom markets
New or combined
Price cut
applications
SK Broadband
SKT
Open competition
(Hanaro)
Payment/M2M - Wipi* removal
Data services
- MVNO?
Open Internet
KTF KT
- Global standard:
New media
Open architecture browser, OS, etc.
(Quadruple play?)
* Wipi: Wireless Internet platform
LGT LG Dacom for interoperability
LG Powercom
New or newly applied technologies
USIM, Smartcard, VM, RF, Bluetooth
High speed network: HSDPA, Wibro(Mobile WiMAX)
Mobile TV: DMB
28/36
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- 32. VI. Industry structure and new challenges – mobile evolution Korean Mobile Market
As the mobile telecom market is shifting its weights onto higher speed of HSDPA network, Data ARPU is
increasing its portion to the total ARPU with increased packet consumption
KTF ARPU increase, 10~12, 2007
Unit: KRW
40000
36,481
35000
29,315
30000
Monthly use of data packets has
25000
increased after HSDPA service launch
20000
15000
7,610
10000
5,301
HSDPA user made a higher level of
5000
21%
18%
0
CDMA HSDPA ARPU including data one
KTF monthly packet use per user, 2007
Unit: packet Increased data use made a good offset
4000
for total ARPU against/despite the price
3500
depreciation of data service
3000
2500
3,580 packet in October compared to
2000
2,405 packet in 2006.10
1500
1000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct
Source: KTF, Woori stock & security, 2007, 2008
29/36
Seoul Office, Copyright © 2006 Innovation Norway. All rights reserved.
- 33. VI. Industry structure and new challenges – mobile evolution Korean Mobile Market
In the middle of fierce price war, use of data and voice conf. call are considered to be feasibile solutions to
telecom providers, and, recently, recovered data ARPU with increased packets is proving its potentialities
History of mobile operator’s data ARPU
2001 2004 2006 2008.08
ARPU
SKT 4.4% 18% 25% 22%
KTF 5.6% 14% 17% 19%
Voice ARPU
10%,
LGT 7.1% 6% 7%
(Oz 17%)
Source: SKT, KTF, LGT, ARG, 2008
Data ARPU
History of SKT data ARPU
40% SMS,
Follwed by
?
HSDPA
music bell
Voice Conference call
download
IMT-2000 35% 3G users
20% 3G users
Price cutting period
Source: SKT, ARG, 2008
30/36
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- 34. VI. Industry structure and new challenges – mobile evolution Korean Mobile Market
In response to potential user demand, the lagging telecom player, LGT, has first launched a open access
service to the Internet, and other market leaders are reacting according to the situation
Status of mobile telecoms’ unlatching door of their sanctuary
3
WWW
1
100% Telecom
Telecom
Telecom/Mobile Telecom Contents
dependent
Open WAP
Open WAP
Network Portal Providers(CPs)
User/Customer
2
Telecom
Telecom
Portals,WAP
Open CPs
Open WAP Open WAP
Telecom territory
/Pricing range
3
Stand-by screen,
VM(client SW)
service Source: modified from ppt by LGT at IT conference, 2008
31/36
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- 35. VI. Industry structure and new challenges – mobile evolution Korean Mobile Market
As market players are struggling to survivie in the new converged environments, business environments are
getting similar to those of Internet market 15 years ago, or even more complicated, where wired telecom
sticking to closed network and its own services eventually was gone out of the market
Customer costs
Flat pricing
Combined pricing
Incentives/promotion
Very similar to
Affordable phones
Open to collaboration
what?
Customer use with unfamiliar industries
Innovative -> practical
Strategic alliance
payment, entertainment, media, search Internet market
evolved from proprietary network
Cooperation/Win-Win
15 years ago
Standard
Convergence
32/36
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- 36. VI. Industry structure and new challenges – mobile evolution Korean Mobile Market
Though the mobile market has different restrictions and considtions from those of the Internet one, Korean
players will be able to get crucial insights from this history at large
History of closed network with low speed Drivers behind the explosion of subscribers
Vs. open Internet with hight speed
Subscribers
Broadband Internet provision
Open Internet, open architecture
& popularization
xDSL, Cable network
Pricing policy change:
meta-rate system to flat-rate sum system
Telecom community(closed network) Network environment/space expansion:
PSTN network (plus a few of ISDN)
from closed telecom network to open Internet
Abundant capital/investment inflow
Time
to the market; explosive generation of busines
models, new services, technology trials, etc.
Unit: thousand
in the open competition
’96 ’97 ’98 ’99 ’00 ’01 ’02
Users 731 1,634 3,103 10,860 19,040 24,380 26,270
Source: evaluated and surveyed by KRNIC, 2005
Source: KRNIC, 2005
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- 37. VI. Industry structure and new challenges – mobile evolution Korean Mobile Market
Korean mobile market is opening its market to outside overtime in order to make itself more competitive
Wipi removal
10% mobile phonens from abroad
More USIM-based phones
MVNO approval soon
…
Business environment is tougher and getting similar to that of Europe market including Norway,
which means that it is familiar to Norwegian/European companies
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- 38. VII. Behind the successes of Korean ICT industry Korean Mobile Market
To be updated, with two to three points
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- 39. Thank you!!
For more information, please, refer to the the following contact information
Changan Choi (Mr.)
Market Adviser, IN Seoul office
Office: +82 767 2653, Mobile: +82 10 4847 0237
E-Mail: changan.choi@innovationnorway.no
Reidar Grevskott, Commercial Counsellor, IN Seoul office
Mobile: +82 10 3743 5992,
E-Mail: reidar.grevskott@innovationnorway.no
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