46
MARKET ANALYSIS
their WCDMA/HSDPA networks during
2007—has helped encourage the
uptake of internet browsing and advanced
multimedia services.
The South Korean market has experienced
significant growth for mobile
music. Interestingly, rather than being
driven by the absence of broadband,
this market has been driven by the
widespread availability of both highspeed
mobile and broadband. The
country’s operators have deployed
business models whereby mobile music
offerings are largely provisioned
through dual-music packages (where
the track can be accessed and/or
downloaded via mobile and online).
SK Telecom has been offering the
MelOn service (combining fixed line
and mobile downloads) since November
2004 and has amassed eight million
subscribers contributing revenues
of KRW70bn ($75m) in 2006, making it
the leading music site in Korea.
In June 2000, the company Widerthan.com
was formed to drive innovation
in partnership with SKT, and develop
the ringback tone as a means to
drive further growth in mobile music.
SK Telecom now reaps the rewards of
this partnership, gaining more revenue
from ringback tones than ringtones.
While both markets have developed
in parallel, the complementary addition
of full track mobile and online
music services to SKT’s music offering
is an example of how the two
markets have followed quite disparate
business models, consequently
resulting in two different mobile
music market dynamics.
Mobile gaming has also proved a
big hit in South Korea. With a market
worth $283.8m in 2007, it was the
third largest single country market
behind the US and Japan. Like
Japan, South Korea is a maturing
mobile games market with slowing
growth. Informa forecasts that by the
end of 2012, South Korea will have
dropped to fourth place behind the
US, Japan and China, its share of the
global games market having dropped
to 6.9 per cent, down from 8.8 per
cent in 2007.
Mobile TV is another service that
has found early traction in South Korea.
Local carriers have been offering
video streaming services over cellular
networks since 2003. However, SKT
FACTFILE Data provided by WCIS | For related regional data: www.wcisdata.com email: telecoms.enquiries.com
OPERATOR SYSTEM ON AIR 12/2007 08/2007 04/2007 12/2006 08/2006
KT Powertel iDEN Oct 2000 314,800 314,800 309,000 303,430 316,000
KTF CDMA-1700 May 2001 11,289,500 11,856,600 12,859,000 12,895,900 12,728,800
KTF WCDMA 2100 Dec 2003 2,490,300 1,676,000 396,000 18,000 3,200
LG Telecom CDMA-1700 Oct 1997 7,789,600 7,518,160 7,261,500 7,012,280 6,841,240
SK Telecom CDMA-800 Jan 2002 20,657,700 20,655,000 20,663,000 20,131,130 19,976,800
SK Telecom WCDMA 2100 Dec 2003 1,446,200 804,000 230,000 140,000 5,200
Intelligence Centres are powerful information services designed to provide you with up-to-the minute market comment, intelligence, data and analyst access, via a single, convenient
online platform. Find our more at: www.intelligencecentre.net email: telecoms.enquiries@informa.com
found that having launched video
streaming over 3G, it took less than a
year before the network became congested
with video traffic and started
to cause problems. Furthermore, the
cost of providing the service on a oneto-one
basis proved expensive. This
prompted SKT to launch the world’s
first satellite DMB service with its
affiliate TU Media in May 2005. SK
Telecom has called the addition of
mobile satellite broadcasting services
its strategy for going ‘beyond 3G’.
Both of the other mobile operators
in South Korea have also now launched
S-DMB services.
The South Korean government has
approved the introduction of T-DMB
broadcasts of TV programmes to mobile
devices. While the mobile operator
SKT is fully behind S-DMB through TU
Media, terrestrial broadcasters—such
KBS and SBS—are preparing to provide
the T-DMB service, which will be free
of charge with 48 channels. While TU
Media struggles to obtain the rights
to retransmit terrestrial broadcasts,
broadcasters are likely to automatically
provide their programmes to T-DMB
customers. T-DMB was launched in Q107
on a national basis in South Korea, and
there are currently around three million
users in total (of which a third are mobile
users) with a total of between 12 and 18
million users forecast by 2010.
Mobile social networks are also
proving popular in South Korea.
Cyworld is a form of community
launched by ST Communications, a
subsidiary of SKT in 2003, which links
both fixed line and mobile internet
services. The mobile version of the
service was launched in March 2004,
and by the end of 2005 had more than
one million users.
Cyworld’s main feature is the mini
homepage or ‘minihompy’, which com-
bines a photo gallery, message board,
guest book and bulletin board. The
core of the Cyworld service is the
peer-to-peer relationships, which are
initiated by users, where friends are
invited to visit and exchange messages
and contact information. Because
the fixed and wireless audiences are
able to access the same service, the
potential audience is extended, and the
appeal for advertisers increased.
Cyworld uses its own ‘currency’,
known as dotori (acorns). These are
priced at KRW100 ($0.10) and can
be used to buy items to furnish the
virtual room, and range of digital
merchandise including music, decorations
and pictures.
It is estimated that around 25
million South Koreans have used the
Cyworld service, and penetration of
the 20-30 year old age group is above
90 per cent. Service revenues for Cyworld
in 2005 were KRW50bn ($50m),
covering both the fixed line and mobile
business, and the service had
600,000 visitors per month. Sales of
the acorn currency are reported to be
even higher, putting the total revenue
for the service at around $100m for
2005. As well as South Korea, Cyworld
has so far launched in Japan, Taiwan
and China and the US, and is on the
verge of launching in Germany.
With music, gaming, TV, social
networking and advertising all
taking off in South Korea, the temptation
for operators in other saturated
markets to ape those services must
be strong. However, it’s worth bearing
in mind that success stories—such
as i-mode at DoCoMo and push to
talk over cellular at Nextel—don’t
always transfer well. South Korea is
a market characterised by a domineering
regulator and all powerful
network operators. �
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