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South Korea Telecommunications Report Q4 2009Product Type: Market Research ReportPublished by: Business Monitor International Published: October 2009 Product Code: R302-8610 Description A number of changes have occurred in BMI’s latest update of the South Korean telecoms market. Theserelate largely to regulatory practices, which have seen the Korea Communications Commission (KCC),the country’s telecoms regulatory body, examine mobile tariffs. A report produced by the OECDcomparing South Korea with 15 similar developed markets showed its tariffs to be significantly higher.On account of this, the KCC announced it would consider reducing prices by 20%.Mobile operators are also looking to promote greater content usage, and in early September 2009, SKTelecom launched the country’s first open mobile market place for content. Previously, subscribers wereonly able to acquire content through their operator’s web portal, significantly reducing their choice. Thegrowing availability of content has also enriched operators’ non-voice revenues, so that ARPU rates havefor the most part remained stable compared with other similarly placed markets. For the first time, BMI has introduced a forecast for mobile blended ARPUs. Based on the historical dataof the country’s three operators - SK Telecom, KT and LG Telecom - ARPU fell by just 0.3% in 2008and 0.7% in 2007. A greater focus on content development, combined with lower prices, should help tobring about flat growth during 2009 to KRW39,739, with ARPU levels easing to KRW39,663 by 2013.The small decline over our five-year forecast period is expected on the back of aggressive pricing as themarket matures. The launch of the Apple iPhone in the country, expected in 2009, could also play a significant role interms of ARPU levels and development of the mobile market. It has yet to be determined whether KT orSK Telecom will acquire exclusive rights to the iPhone, which could help to boost market share onaccount of its popularity. However, given that SK Telecom has launched its own open mobile store, TStore, this could be in direct conflict with Apple’s App Store. Furthermore, its launch could also have an impact on the mobile handset market, which has long beendominated by local vendors Samsung, LG and other domestic manufacturers. Meanwhile, in terms of the broadband market, we are seeing a continued increase in demand despite thesector’s maturity. This is occurring on the back of growing IPTV subscriber numbers, rising to over700,000 as of August 2009, up by 300,000 since the beginning of the year. Much of this has been down toa government-led push to publicise services, making them more popular. However, it has yet to reach the2mn targeted by the state by YE09, suggesting that the reason for the slow take-up of services has beencustomer complaints of a ‘dull and patchy’ premium service and limited channel availability. Table of Contents
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