High broadband and mobile penetration, deregulation, multiple players and fragmented markets make entry into Korea a challenge
Looking to break into a market that increasingly occupies a strategic place in many organizations' North Asian expansion plans, service providers and vendors have found themselves confronted by a market in flux when they land in Korea. IDC Asia/Pacific conducted the Korean Telecom Operator Profiles and Strategy Assessment to offer a greater insight into this rapidly changing market.
Though the Korea market is lauded on a global scale for its broadband and mobile penetration, it must be noted that deregulation has brought about significant changes to this market. As a result of multiple players and the fragmented market segmentations, the respective channels of communication are highly developed and market entry can appear difficult if not impossible.
According to Lain McNeill, Senior Analyst of Telecom Research, "With foreign entrants finally taking significant strides into the market and what appears to be both market and government influenced consolidation on the immediate horizon for the domestic players, it is imperative for new and potential market entrants to have a solid grasp of the competitive environment in Korea if they expect to capitalize on the opportunities that are currently available."
With the addition of new carriers, both domestic and foreign, competition in the telecom arena is fierce. Korea Telecom enjoys tremendous market share, but newcomers are making inroads into certain segments of the market. Further, in an effort to promote increased global competitiveness and to increase the strength of local companies in the face of full deregulation, the government has expressed its concern over the fragmented nature of the market and put forth a proposed consolidation. While this evolution revamps the domestic competitive landscape, the market continues to grow, creating a scenario warranting a high degree of attention. IDC notes that changes taking place in the Korean market have left a window of opportunity for players that can move quickly to capitalize on newly available assets, emerging markets and alliance opportunities.
Regardless of the obstacles, the market potential is tantalizing as Korea lays strong claim to the title of one of most telecom/IT savvy countries in the Asia/Pacific region. The country was the first in the Asia/Pacific region to have wireless subscription numbers in excess of wire-line customers, achieving the distinction in August 1999. Additionally, the Korean Internet market has the highest level of broadband penetration in the world with broadband access nearly 50 percent cheaper than in its neighboring Japan.
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