2013 South Korea - Telecoms, Mobile, Broadband and Forecasts

Strong LTE and FttX growth continues as data use surges across fixed and mobile networks

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 has well developed submarine cable and satellite infrastructure as well as solid internet resources to support the growing demand for national and international communications. The government aims to transform the country into a knowledge-based information society in a ‘smart-age’.

The South Korean Government committed to transitioning the country to digital terrestrial, digital cable and digital satellite TV broadcasting by 2012. The pressure created by convergence had South Korea rewrite its regulatory arrangements for the broadcasting and communications sector. The operators continue to invest heavily in fibre based broadband deployments and IPTV subscriptions have passed the 6 million mark as more content is available and the operators are able to compete more effectively with their own live broadcasts.

South Korea continues to be a booming mobile market as it innovatively explores the options for value-added services. The market passed the 110% penetration rate mark into 2013 with many individuals carrying at least one mobile phone. Having launched 3G networks in 2003, these accounted for over 75% of all subscriptions. New investments are intended to drive revenue and gain market share and the year has seen strong growth in LTE after launching in 2011 and a rapid increase in smartphone adoption.

South Korea has the world’s highest number of broadband services per capita. Into 2013 over 37% of the population and 90% of households were broadband subscribers. FttX accounted for over 60% of total subscriptions. Since 2006, Korea’s policy emphasis has been on completing a BcN with wireline speeds of 50-100Mb/s per household and 1-2Mb/s on wireless connections. The plan moving forward is for a UBcN (Ultra Broadband convergence Network) with 1Gb/s speeds on fixed lines or 10Mb/s on wireless by 2012/13. In addition to upgrades to the backbone network a plan was established to link the public sector to a sensor network in 2012.

The drive towards a ‘new economy’ has seen significant investments in Smart Infrastructure including Cloud Computing, Smart Grids and Smart Cities. The emergence of a National Strategy for Green IT has seen government promotion of new industry creation into 2018 such as 4G broadcasts and 3D and Smart television.

Market highlights:

• Into 2013, fibre technology accounted for over 60% of all broadband subscribers in South Korea while ADSL subscriptions had declined to close to 10%, the balance being accounted for by cable modem subscribers
• Mobile penetration increased to 110%; Strong LTE demand was enabled by the introduction of more smartphones into the market and has seen an uptrend in ARPU
• LT data usage is reported at least 50% higher compared with 3G at 1.6GB and 1.2GB respectively as reported by SK Telecom end June 2012. Samsung reports figures as high as 2.9GB of data on average a month compared with 1.2GB for 3G users
• LTE-Advanced testing continued
• HD voice over LTE (VoLTE) was launched by SK Telecom
• Multi-carrier technology on 800MHz and 1.8GHz bands was launched in a world first
• The introduction of MVNO services saw subscriptions near one million entering 2013
• Spectrum auctions were held raising over US$1.5 billion for 10 year licence allocations
• Wi-Fi and femtocell investments increased to reduce pressure on the core mobile networks
• A Smart Grid pilot is underway on Jeju Island with plans for a nationwide Smart Grid by 2030
• Green Economy initiatives are driving investments in Smart Cities

South Korea – key telecom parameters – 2011 - 2013

(Source: BuddeComm based on industry data and BuddeComm forecasts)

For those needing high level strategic analysis and objective analysis on Korea, this report is essential reading and gives further information on:

• The New Songdo City Development planned to be a future Korean “Smart City”
• The Government’s “Smart Work” initiative that aims to have 30% of public employees work from home or smart-work centres by 2015 with smartphones, laptops and other mobile devices.
• WiBro subscribers passing the 900,000 mark after investments of over KRW 2 trillion.
• the country’s goal to capture 10% of the global cloud services market by 2014 and to halve the cost of operating the public sector’s ICT infrastructure
• the development of new technologies such as controlling a screen with one’s gaze
• trials of 3D broadcasts in tandem with regular 2D broadcasts
• direct deals by Samsung with companies including Skype and music streamer Spotify.

Data in this report is the latest available at the time of preparation and may not be for the current year.