South Korea - Telecoms, Mobile and Broadband

Publication Overview

This report provides a comprehensive overview of trends and developments in Korea's telecommunications market. The report analyses the mobile, internet, broadband, digital TV and converging media sectors. Subjects include:


  • Market and industry analyses, trends and developments;
  • Facts, figures and statistics;
  • Industry and regulatory issues;
  • Infrastructure;
  • Major Players, Revenues, Subscribers, ARPU, MoU;
  • Internet, VoIP, IPTV;
  • Mobile Voice and Data Markets;
  • Broadband (FttH, DSL, cable TV, wireless);
  • Convergence and Digital Media;
  • Mobile subscriber forecasts to 2019;
  • Broadband market forecasts for selective years to 2019.

Researchers:- Paul Kwon and Peter Evans
Current publication date:- April 2015 (21st Edition)

Executive Summary

Operators searching for the next growth driver as LTE in South Korea matures

South Korea has one of the world’s most active telecommunications and Information Technology markets backed by strong support from the government. Spending on ICT and high-technology equipment helped lead a transformation of the economy to one that is more progressively knowledge based. Having invested significantly in ‘basic’ telecommunications infrastructure over past decades, the country now possesses well developed national and international communications infrastructure. Government involvement continues with the aim of transforming the country into a knowledge-based information society in a ‘smart-age’.

South Korea’s operators have invested heavily in fibre based broadband deployments, laying the foundations for triple play services. IPTV subscriptions have grown beyond the 10 million mark as more content is available and the operators are able to compete more effectively with their own live broadcasts. To underpin further growth, KT unveiled a new vision known as “GigaTopia” in 2014. The vision is comprised of three goals: delivering Gigabyte speeds to end users, developing an “Internet of Things (IOT)” platform and delivering convergent services such as combined WiFi and LTE-Advanced. To meet these goals KT plans to invest KRW4.5 trillion over three years.

South Korea continues to be a booming mobile market as it rapidly takes up LTE and innovatively explores the options for value-added services. The market passed the 110% penetration level with many individuals carrying at least one mobile phone. 4G LTE now represents the majority of mobile connections after it was introduced in 2011. Not surprisingly, there has also been a rapid increase in mobile traffic, hinting at potential profitability challenges ahead as operators are forced to spend on upgrading network capacity while at the same time reduce tariffs in response to competition.

South Korea has the world’s highest number of broadband services per capita. Into 2015 approximately 40% of the population and around 95% of households were broadband subscribers. Over 60% of broadband subscribers used FttH or Apartment LANs, with the remainder accessing predominantly cable. KT unveiled plans to increase access speeds to 1Gb/s as part of its GigaTopia strategy, triggering a potential round of infrastructure upgrades as competitors spend on CAPEX to keep pace. The move by KT fulfils Korea’s UBcN (Ultra Broadband convergence Network) strategy, which aims for 1Gb/s speeds on fixed lines.

The drive towards a ‘new economy’ has seen significant investments in the Internet of Things (IOT) including Smart Grids and Smart Cities. The major operators successfully utilised LTE introduction to grow revenue by upselling ARPU. However with LTE penetration approaching maturity levels, the major operators are increasingly looking towards the IOT as the next major revenue growth driver.

Market highlights:

  • LTE has been used to successfully increase ARPU levels through upselling;
  • Strong LTE demand was supported by new LTE plans and introduction of more smartphones into the market resulting in ARPU trending upwards;
  • Commercial LTE-Advanced has been launched with the focus now on increasing downlink speeds;
  • Convergence has been identified as the next growth driver as LTE penetration matures;
  • Fixed broadband population penetration is approaching 40%;
  • Into 2015, fibre technology accounted for almost 60% of all broadband subscribers in South Korea while ADSL subscriptions had declined to less than 10%, the remainder is due to cable modem subscribers;
  • KT has launched its new GigiTopia vision to stimulate growth through increased fixed broadband speeds;
  • Usability of online payment services has improved after the regulatory requirement to use Active-X was removed. The online payment opportunity has spurred new players such as Kakao to enter the online payment market;
  • HD voice over LTE (VoLTE) was launched allowing operators to plan towards eventually allocating most if not all spectrum to LTE.

 

 

Table of Contents

  • 1. Key Statistics
    • 1.1 Country Overview
      • 1.1.1 Background
      • 1.1.2 South Korea’s economy
  • 2. Telecommunications Market
    • 2.1 Government support
    • 2.2 Communication industry revenue by type
    • 2.3 Global rankings and South Korea
      • 2.3.1 Government Broadband Index - EIU
      • 2.3.2 Global Innovation Index – INSEAD
    • 2.4 Telecommunications market sectors
      • 2.4.1 Fixed-line and mobile services
      • 2.4.2 Broadband in South Korea
  • 3. Regulatory Environment
    • 3.1 KCC – Overview and responsibilities
    • 3.2 KCC – related laws
    • 3.3 National Internet Development Agency of Korea (NIDA)
    • 3.4 Policy overview
  • 4. Fixed Network Market
    • 4.1 Forecast fixed-line subscribers – 2013 - 2015; 2018
  • 5. Major Operators
    • 5.1 Overview of Major Telecom Operators
    • 5.2 KT Corp
      • 5.2.1 Company overview
      • 5.2.2 Company background
      • 5.2.3 KT Corp: Financial statistics
      • 5.2.4 KT Corp: Operations statistics
    • 5.3 SK Broadband
      • 5.3.1 Company overview
      • 5.3.2 Company developments
      • 5.3.3 Company background
      • 5.3.4 SK Broadband: Financial statistics
      • 5.3.5 SK Broadband: Operations statistics
    • 5.4 SK Telecom
      • 5.4.1 Company overview
      • 5.4.2 Company background
      • 5.4.3 SK Telecom: Financial statistics
      • 5.4.4 SK Telecom: Operations statistics
      • 5.4.5 SK Telecom: LTE 2.0 plans
      • 5.4.6 SK Planet
    • 5.5 LG U+
      • 5.5.1 Company overview
      • 5.5.2 LG U+: Financial statistics
      • 5.5.3 LG U+: Operations statistics
      • 5.5.4 LG U+: “Beyond Telecom” initiatives
  • 6. Telecommunications Infrastructure
    • 6.1 National submarine cable infrastructure
    • 6.2 International submarine cable infrastructure
    • 6.3 Satellite infrastructure
    • 6.4 Internet infrastructure
      • 6.4.1 Internet eXchange (IX)
      • 6.4.2 South Korea registered domains
      • 6.4.3 IPv6
      • 6.4.4 South Korea international internet bandwidth
    • 6.5 Smart grids
      • 6.5.1 Smart grid: new laws
      • 6.5.2 Smart grid stages: 2010 - 2030
      • 6.5.3 Five smart grid implementation areas
      • 6.5.4 Jeju Island
    • 6.6 Smart cities
      • 6.6.1 New Songdo City
      • 6.6.2 Busan
    • 6.7 Infrastructure investment overview
    • 6.8 Infrastructure investment stages of growth
      • 6.8.1 Ubiquitous Korea (u-Korea)
    • 6.9 Green IT in South Korea
    • 6.10 Top 10 ICT focus areas: 2010 - 2018
    • 6.11 New Technology Development
      • 6.11.1 Controlling TVs with one’s eyes
  • 7. Internet Market
    • 7.1 Internet statistics
      • 7.1.1 South Korea internet users
      • 7.1.2 South Korea internet subscribers
    • 7.2 Internet usage patterns
    • 7.3 Internet Forecasts
      • 7.3.1 Forecast internet users – 2013 - 2015; 2019
      • 7.3.2 Forecasting methodology
    • 7.4 Internet media consumption
  • 8. Broadband Market
    • 8.1 Background
      • 8.1.1 Broadband success criteria
    • 8.2 Overview
    • 8.3 Broadband statistics
    • 8.4 Operator broadband subscribers
    • 8.5 Broadband subscribers by access type
    • 8.6 Forecast broadband subscribers – 2013 - 2015; 2019
    • 8.7 Broadband government targets
      • 8.7.1 Broadband convergence Network
      • 8.7.2 Ultra Broadband convergence Network
      • 8.7.3 Broadband speed results
    • 8.8 Broadband technologies
      • 8.8.1 Overview
      • 8.8.2 Cable modem
      • 8.8.3 Digital Subscriber Line (DSL)
      • 8.8.4 Apartment LAN
      • 8.8.5 Fibre-to-the-Home
    • 8.9 Wireless broadband
      • 8.9.1 Wireless Local Area Network (WLAN)/Wireless Fidelity (WiFi)
      • 8.9.2 WiBro
      • 8.9.3 Mobile broadband
    • 8.10 Voice over Internet Protocol (VoIP)
    • 8.11 Broadband TV
      • 8.11.1 Triple play background
      • 8.11.2 Internet protocol TV (IPTV)
  • 9. Digital Media / Digital Economy
    • 9.1 Digital Media
      • 9.1.1 National television networks
      • 9.1.2 Digital TV
      • 9.1.3 Satellite TV
      • 9.1.4 Cable TV (CATV)
      • 9.1.5 Broadcasting deregulation
      • 9.1.6 Nationwide Terrestrial 3D Broadcast
      • 9.1.7 TV Music Streaming
    • 9.2 Digital Economy
      • 9.2.1 E-commerce
      • 9.2.2 E-government
      • 9.2.3 E-entertainment
      • 9.2.4 E-Learning
      • 9.2.5 E-services
  • 10. Mobile Communications
    • 10.1 Overview of South Korea’s mobile market
    • 10.2 Background of South Korea’s mobile market
    • 10.3 Mobile statistics
      • 10.3.1 Mobile subscribers 1985 - 2016
      • 10.3.2 Mobile subscribers by operator
      • 10.3.3 Mobile ARPU by operator
    • 10.4 Fourth mobile operator to enter market?
      • 10.4.1 KMI
      • 10.4.2 Kbiz
    • 10.5 MVNOs
    • 10.6 Spectrum auctions: 1.2GHz, 1.8GHz and 800MHz
    • 10.7 Additional spectrum allocation
    • 10.8 Mobile technologies
      • 10.8.1 Analogue (AMPS)
      • 10.8.2 Personal Communication Service (PCS)
      • 10.8.3 Code Division Multiple Access (CDMA)
      • 10.8.4 Wideband CDMA (WCDMA)
      • 10.8.5 LTE
      • 10.8.6 Voice over LTE (VoLTE)
      • 10.8.7 LTE-Advanced (LTE-A)
      • 10.8.8 Smartphones
    • 10.9 Mobile data services
    • 10.10 Mobile content and applications
      • 10.10.1 Overview
      • 10.10.2 M-commerce/m-payment
      • 10.10.3 Mobile banking (m-banking)
      • 10.10.4 Mobile government (m-government)
      • 10.10.5 Apps Stores
      • 10.10.6 Mobile advertising
      • 10.10.7 NFC chips in smartphones
      • 10.10.8 Mobile TV
      • 10.10.9 Mobile learning
      • 10.10.10 OTT Voice
    • 10.11 Forecast: Mobile subscribers 2014- 2016; 2019
    • Table 1 – Country statistics South Korea – 2015
    • Table 2 – Telecom revenue and investment statistics – 2013
    • Table 3 – Telephone network statistics – 2014
    • Table 4 – Internet user statistics – 2015
    • Table 5 – Broadband statistics – January 2015
    • Table 6 – Mobile statistics – 2015
    • Table 7 – National telecommunications authorities
    • Table 8 – South Korea GDP real growth rate – 2008 - 2013
    • Table 9 – South Korea GDP and GDP per capita – 2000 - 2017
    • Table 10 – Telecommunications fixed-line, mobile, total revenue and investment – 2000 - 2013
    • Table 11 – Wireline communication service revenue by sector – 2008 - 2013
    • Table 12 – Wireless communication service revenue by sector – 2008 - 2012
    • Table 13 – Fixed and mobile lines in service and teledensity – 1991 – 2015
    • Table 14 – KT Corp’s fixed-line subscribers and market share – 2003 - 2016
    • Table 15 – Broadband internet subscribers by operator – 2005 - 2014
    • Table 16 – Broadband internet market share by operator – 2005 – 2014
    • Table 17 – Forecast fixed-line subscribers and penetration – higher band: 2013 - 2015; 2018
    • Table 18 – Forecast fixed-line subscribers and penetration – lower band: 2013 - 2015; 2018
    • Table 19 – Mobile operator market share by subscribers – 2002 - 2015
    • Table 20 – KT Corp revenue, net profit, capex – 2008 – 2014
    • Table 21 – KT Corp’s fixed-line (PSTN) subscribers and market share – 2003 - 2016
    • Table 22 – KT Corp’s VoIP and total subscribers – 2008 - 2016
    • Table 23 – KT Corp’s broadband internet subscribers and market share – 2003 - 2015
    • Table 24 – KT Corp’s IPTV subscribers, ARPU and market share – 2006 - 2015
    • Table 25 – KT Corp’s WiBro subscribers – 2007 - 2014
    • Table 26 – KT Corp’s mobile and 3G subscribers and total market share – 2004 – 2014
    • Table 27 – KT’s Voice and data ARPU – 2004 – 2014
    • Table 28 – KT’s smartphone subscribers and penetration – 2009 – 2014
    • Table 29 – SK Broadband revenue, net income, capex, EBITDA – 2003 - 2014
    • Table 30 – SK Broadband - broadband internet subscribers – 2012 - 2015
    • Table 31 – SK Telecom revenue, net profit, capex, EBITDA margin – 2005 - 2014
    • Table 32 – SK Telecom mobile and 3G subscribers, ARPU – 2002 - 2014
    • Table 33 – SK Telecom smartphone subscribers and penetration – 2009 - 2014
    • Table 34 – Monthly LTE usage per subscriber – 2012 - 2014
    • Table 35 – LG U+ revenue, net income, EBITDA – 2009 – 2014
    • Table 36 – LG U+ revenue breakdown by service – 2009 – 2014
    • Table 37 – LG U+ capex – 2009 – 2014
    • Table 38 – LG U+ - total mobile ARPU – 2009 - 2014
    • Table 39 – LG Telecom mobile subscribers, ARPU – 2003 - 2014
    • Table 40 – LG Telecom smartphone subscribers and penetration – 2011 – 2014
    • Table 41 – LG Telecom fixed-line (PSTN and VoIP) subscribers – 2005 - 2014
    • Table 42 – LG U+ broadband subscribers – 2004 – 2014
    • Table 43 – LG U+ IPTV subscribers – 2007 – 2015
    • Table 44 – Registered .kr domains – 1993 - 2015
    • Table 45 – Number of IPv4 and IPv6 addresses – 1997 - 2015
    • Table 46 – International bandwidth – 1997 - 2013
    • Table 47 – Smart grid investment to 2015
    • Table 48 – Internet users and population penetration rates – 1994 - 2016
    • Table 49 – Internet users and population penetration rates – 2003 - 2013
    • Table 50 – Internet subscribers – 1996 - 2015
    • Table 51 – Personal computers and penetration by population and household – 1995 - 2014
    • Table 52 – Internet usage rates by service – 2009 - 2013
    • Table 53 – Main purpose of using the internet – 2010 - 2013
    • Table 54 – Forecast internet users and penetration – higher band: 2013 - 2015; 2019
    • Table 55 – Forecast internet users and penetration – lower band: 2013 - 2015; 2019
    • Table 56 – Online versus offline media consumption – 2012
    • Table 57 – Fixed broadband internet subscriber growth and penetration rate – 1998 - 2015
    • Table 58 – Broadband subscribers and households – January 2015
    • Table 59 – Broadband market share by operator – January 2015
    • Table 60 – Broadband internet subscriber numbers by system – 1998 - 2015
    • Table 61 – Forecast broadband subscribers and penetration – higher band: 2013 - 2015; 2019
    • Table 62 – Forecast broadband subscribers and penetration – lower band: 2013 - 2015; 2019
    • Table 63 – BcN implementation in households/subscribers – 2005; 2007 - 2011
    • Table 64 – UBcN implementation goals in households/subscribers – 2009 – 2013
    • Table 65 – Broadband subscribers by access type – January 2015
    • Table 66 – Cable modem subscribers – 1999 – 2015
    • Table 67 – Broadband cable modem (HFC) subscribers by service provider – January 2015
    • Table 68 – DSL subscribers – 1999 – 2015
    • Table 69 – DSL subscribers by service provider – January 2015
    • Table 70 – A-LAN subscribers – 2002 - 2015
    • Table 71 – A-LAN subscribers by service provider – January 2015
    • Table 72 – FttH subscribers – 2006 - 2015
    • Table 73 – FttH subscribers by service provider – January 2015
    • Table 74 – KT and SK Telecom WiBro subscribers – 2006 - 2014
    • Table 75 – South Korea VoIP subscribers by major operator and market share – September 2014
    • Table 76 – South Korea VoIP subscribers – 2006 - 2014
    • Table 77 – IPTV subscribers by operator – 2006 - 2015
    • Table 78 – DTH subscribers – 2002 – 2015
    • Table 79 – E-commerce volume by transaction type – 2001 - 2013
    • Table 80 – Internet banking service subscribers – 2001 - 2013
    • Table 81 – Financial service by delivery channel – 2005 – 2013
    • Table 82 – Usage of e-government services – 2013
    • Table 83 – E-tax usage rates – 2002 - 2007
    • Table 84 – Online game market volume – 2002 - 2009
    • Table 85 – Digital music market volume – 2003 - 2009
    • Table 86 – Usage rates by types of social networking service – 2013
    • Table 87 – Mobile subscribers – 1985 - 2016
    • Table 88 – Mobile subscribers and annual change by operator and technology – January 2015
    • Table 89 – Mobile operator market share – 2002 - 2016
    • Table 90 – Mobile subscribers by operator – 2002 – 2016
    • Table 91 – Mobile Service ARPU per month by operator – 2011 - 2014
    • Table 92 – MVNO subscribers by operator – 2012 - 2014
    • Table 93 – CDMA mobile subscribers by operator – 2002 - 2013
    • Table 94 – WCDMA subscribers by operator – June 2013
    • Table 95 – LTE mobile subscribers by operator – 2011 – 2014
    • Table 96 – Smart phone subscribers and market share – 2009 - 2012
    • Table 97 – Forecast smart phone and tablet PC subscribers and market share – 2010 – 2015
    • Table 98 – Monthly Traffic volume per phone type – 2012 - 2014
    • Table 99 – M-commerce transaction value – 2012 - 2015
    • Table 100 – Payment Gateway transaction value – 2012 - 2015
    • Table 101 – Mobile banking service subscribers – 2003 – 2010
    • Table 102 – Forecast mobile subscribers and penetration – lower band forecast – 2014 - 2016; 2019
    • Table 103 – Forecast mobile subscribers and penetration – higher band forecast – 2014 - 2016; 2019
    • Chart 1 – Telecommunications revenue breakdown – 2000 versus 2013
    • Chart 2 – South Korea fixed-line and mobile subscribers – 2000 - 2015
    • Chart 3 – Broadband internet subscribers by operator – 2005 - 2014
    • Chart 4 – LG U+ revenue, capex, ARPU – 2009 - 2014
    • Chart 5 – Number of internet users and growth rate in South Korea – 2000 - 2015
    • Chart 6 – South Korea broadband subscribers and population penetration – 2000 - 2014
    • Chart 7 – South Korea share of broadband subscribers by technology – 2002 - 2015
    • Chart 8 – South Korea mobile subscriber growth, population penetration – 2000 - 2014
    • Chart 9 – Operator total market share – January 2015
    • Chart 10 – South Korea mobile subscribers by operator – 2002 – 2016
    • Exhibit 1 – Map of South Korea
    • Exhibit 2 – Significant telecoms operators in South Korea
    • Exhibit 3 – KT at a glance – December 2014
    • Exhibit 4 – SK Broadband at a glance – December 2014
    • Exhibit 5 – SK Telecom at a glance – December 2014
    • Exhibit 6 – LG U+ at a glance – December 2014
    • Exhibit 7 – National submarine fibre optic cables overview in South Korea
    • Exhibit 8 – International submarine fibre optic cables overview in South Korea
    • Exhibit 9 – KOREASAT satellite status
    • Exhibit 10 – Interconnection status by IX - 2014
    • Exhibit 11 – Smart grid implementation areas
    • Exhibit 12 – Phased implementation plan of Jeju Smart Grid: 2010 - 2013
    • Exhibit 13 – Informatisation policies and paradigms – 1998 - 2012
    • Exhibit 14 – Informatisation Promotion: Execution body
    • Exhibit 15 – Green IT promotion strategies of domestic companies
    • Exhibit 16 – Comparison of WiBro and mobile technologies in South Korea
    • Exhibit 17 – Regional TV broadcasters in South Korea
    • Exhibit 18 – E-government stages: 1980s - present
    • Exhibit 20 – South Korea rankings in UN global e-government survey – 2005, 2008, 2010, 2012

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