In the early 1980s, South Korea’s telecommunications industry was dominated by the local companies, KT and LG. As the number of phone lines continued to increase, KT developed and implemented the electronic switch TDX-1. By 1993, the country had more than 20 million telephone lines. These developments laid the groundwork for an emerging information society. KT also launched the Mugunghwa Satellite No. 1 and 2 in 1995, as well as a cellular network, AMPS, in July of that same year.
The country’s growing population and high GDP per capita helped to fuel the telecommunications industry, but the government needs to make sweeping changes to encourage growth. “South Korea must update its policy and regulatory frameworks to address the rapidly changing market,” said Jake Saunders, senior vice president of ABI Research. The industry also needs to rethink its incentive systems and improve the investment climate. To promote sustainable growth, South Korea should improve its infrastructure policies and reduce the burden of debt for consumers.
The country’s infrastructure policies have helped KT become a dominant player in the telecommunications industry. In October 2000, KT and the city of Boston signed an MOU to create an improved internet environment for the city’s downtown core. In June, S-Fone became the world’s first commercial CDMA network in Vietnam, and in February 2004, KT formed UNISK, a joint venture between KT and GSK.
After several years of development, South Korea’s telecommunications services have continued to improve. Thanks to the support of foreign partners and the electronics industry, the telecommunications sector in South Korea has experienced tremendous growth in the past few years. By 1987, there were 9.2 million subscribers, more than double what it was in 1980. In February 2004, SKT acquired a cab company called ‘T-broad’, and in June, it became the first commercial CDMA network in Vietnam.
After years of development, the South Korean telecommunications industry has become a world leader in revenue. It has three major network operators and many smaller players. The market is competitive with its high fixed broadband takeup. In February 2004, UNISK was formed. During the same period, it launched the Kibot, a mobile robot that includes many of the smartphone’s features. Its new initiatives have made the South Korean telecommunications market the third-largest in the world.
In March 2002, KT and Sprint struck international roaming agreements with China Unicom, which sells proprietary software for smartphones. In April, KT and Sprint also signed an MoU with the Chinese operator HUAI.com. Among other things, KT became the first commercial CDMA network in Vietnam in June. Its partnership with UNISK has helped UNISK achieve more than 1 million users. The telecommunications industry in South Korea has become increasingly competitive as the data infrastructure has improved.
In 2001, SK Telecom established the first fixed-line operator in the country. In October, it became the country’s largest mobile service provider by revenue. Its mobile service revenue rose by 10% during the same period. It is now the third-largest mobile market in the world. In February, UNISK was created. The company merged with two other companies. The acquisition of Shinsegi Telecomm led to increased competition in the telecommunications sector.
During the 1980s, telecommunications in South Korea dramatically improved. The country’s telecommunications market has been largely influenced by foreign partners as well as the electronics industry. In 1987, nine million subscribers were registered in the industry. In contrast, 2.8 million subscribers had subscribed in 1980. In both cases, the country’s telecommunications market is now four times bigger than in 1970.
In the last few years, SKT’s telecommunications market has become increasingly competitive, with many local operators resorting to high handset subsidies and unlimited data plans. It is important for the country to adopt a risk-reward strategy that ensures the success of its businesses. Besides, SKT’s strong economic position and its low population make the country attractive for foreign investors. Meanwhile, the company’s expansion in other areas is complemented by strong competition.
Despite the high mobile penetration rate, the country is still pursuing new growth industries. LTE is the leading technology platform in the mobile subscription market, with a 2.5% CAGR from 2012 to 2016 (from 110.2% to 121.6%). However, there are several challenges to the country’s telecommunications industry. Nevertheless, the market continues to demonstrate stability and diversity, with the emergence of a 4G network.