Korea Telecom CEO Proposes Revamping the KCC

As reported by The Korea Times, Lee, Suk Chae, Chairman and CEO of Korea Telecom said last week that The Korea Communications Commission (KCC) might not be the right organization to guide the country's information technology policies forward.  While talking with panelists at a weekly forum of the National Strategy Institute, he suggested that the KCC's committee-based decision-making structure makes it less effective as a developer of national IT strategies than its predecessor, the Ministry of Information and Communication.  "The KCC is a meaningful organization, but it is based on the wrong fundamental philosophy," he said.  Furthermore,

``The KCC was planned as a neutral, independent agency, but now the body that even has commissioners named from opposition political parties now have the power to regulate IT. Communications is part of administration, and should not be a commission-based organization, and this has to be changed.''

The KCC was inaugurated last year as the country's first converged regulator for telecommunications and broadcasting. Currently, a committee of five, including the KCC chairman and four commissioners, two of them named by the ruling political party and the other two by the opposition, is empowered to make decisions.

``The vice chairman post rotates from the commissioners selected from the ruling political party and the opposition. This means that the leader of the opposition party can become vice commissioner and have the rights to attend administrative meetings, which is not right,'' Lee said.

Mobile TV Penetration in Korea Reaches 22 million

The Korea Times reports that the number of Koreans subscribing to mobile TV services, both free and paid, has reached 22 million, or about 45 percent of the country's population.  TU Media, a unit of SK Telecom and the country's sole provider of pay satellite DMB services, reports that it now has 2 million customers, up from 1.3 million at this time last year.   The country's three mobile carriers, SK Telecom, KT and LG report that they have sole 20 million handsets equipped to receive free terrestrial DMB (digital multimedia broadcasting) telecasts.  Thusfar, South Korea's experience with DMB has proven several things in the marketplace:

• People will watch television on mobile devices.  The long commutes faced by many Koreans who live in urban areas no doubt contributes to this viewing.


• Although some people will subscribe to mobile television, in large numbers they prefer free, advertiser-supported services.


• Korea's terrestrial DMB operators are still not bringing in enough advertising revenue to support the service on a sustained basis

With such large numbers of viewers, it seems that mobile television is here to stay in the Korean market.  As we move into the era of mobile internet, television will also be part of that mix (e.g. CNN, BBC or Youtube video).

Chosun Ilbo: "Global Phone Makers Fail to Impress Koreans"

The headline of an article in the Chosun Ilbo English online edition tells you a great deal about how some people in Korea view the market for mobile telephone services here.  The gist of it is that makers of international phones are failing in the Korean market for lack of new models that come up to the standards set by Samsung and LG Electronics locally.  In fact, this is only a small part of the story.   The real news, as I've commented in earlier posts, is that mobile phones are rapidly being transformed into hand held computers with web browsers, as epitomized by Apple's iPhone.  I read the Chosun Ilbo article today shortly after reading a short New York Times article announcing that Nokia and Intel are partnering to work on mobile computing.  In observing Korea's mobile communications market today, several key realities should be kept in mind.

• It is still not possible to purchase and use an iPhone in South Korea, and may not be possible until late this year or early next.  This, despite the fact that slim new Android phones are being released in the U.S., Europe and around the world.


• Although most Koreans carry 3G cellphones capable of internet access, the two largest mobile services provide only a limited "walled garden" Korean database, rather than access to the full richness and variety of the web beyond the Korean language.


• Despite the above two points, many consumers here in Korea are eager to see the iPhone released in this market.  As evidence, take a look at sales of the iPod Touch, which almost functions as an iPhone if you're in one of the nation's many WIFI hotspots.  Millions of overseas Koreans, who already use the iPhone or Android phones to surf the web, must be lording it over on there relatives here in South Korea.  The word of mouth promotion alone is something Apple could never afford to pay for.

The pressure to catch up with the rest of the world will continue to mount.  The Korea Communications Commission seems to be nudging the mobile industry toward full openness and competition, which should be a good thing for Korea's export-oriented, ICT-based economy.  Delaying the iPhone is, as I mentioned in an earlier post, delaying the inevitable.

Apple Bores a Big Hole in Korea's "Walled Garden"

As a short follow-up to my earlier post, there is an excellent treatment of the current situation at this link. Enjoy.

The Challenge for Korea's Mobile Telecoms Sector

Today many Korea-related blogs were filled with speculation that Korea Telecom was planning to introduce the Apple iPhone in Korea next month.  This was quickly dampened when a KT official apparently announced that there was no such plan.  However, the excitement generated points to the growing challenge faced by South Korea in its mobile telecommunications sector and, by extension, in the global marketplace.  As noted in earlier posts on this topic, several things are becoming clear:

• The mobile market worldwide is on the verge of a massive shift in emphasis from handsets to software and services, as epitomized by the Apple iPhone and Google's Android software platform.


• Korea's handset makers, led by Samsung Electronics and LG Electronics are major players in the global handset market, with much to gain or lose from the massive shift over to hand held computer/communication devices.


• As noted in a recent Reuters analysis, Korean mobile communications service providers have concentrated overwhelmingly on Korean-language services, which don't easily translate into the global market which demands English and other languages.

Samsung is reportedly planning to open up an App store later this year, but will it be a global app store, in competition with iPhone and especially Android applications?  It should be and my recommendation and hope would be that both Samsung and LG invest heavily in making the Android platform successful, here in Korea and around the world.  The rationale for quickly releasing a state-of-the-art Android phone capable of toggling between English and Korean seems obvious.  With some of the world's best mobile networks and the impending transition for some customers to WiBro, Korea is easily the world's largest national test-market for new mobile services and software.  Encouraging competition and innovation in that market is what will serve Korean handset manufacturers and telecommunications providers best in the long run and in an increasingly global marketplace.

Two of My Books Are Going Online Soon

This post is a bit more personal than my usual posts on this blog, but no less illustrative of the rapidly-emerging and converging digital information age in which we live.   Yesterday I walked across the street to the DHL office and shipped new copies of two books to Google. Television's Window on the World:  International Affairs Coverage on the U.S. Networks (Ablex: 1984) was based on my doctoral dissertation at Stanford.   Thanks in large part to an outstanding group of faculty on my dissertation committee, the study seems to have stood the test of time and become a benchmark that is frequently cited by younger researchers.  The Telecommunications Revolution in Korea (Oxford University Press, 1995) was the outcome of two years of research in Korea, supported by Dacom Corporation and with cooperation from a host of government, industry and academic colleagues here.

I'm pleased to announce that the publishers of both these books have reverted copyright to me as author.  I intend to use all of the services of the Google Book Search Partner program to make 100 percent of the content of these books browseable over the internet and to make them searchable via my personal website, www.jamesflarson.com  How quickly you will see them there depends on how long it takes Google to scan and process these volumes upon receipt.  Of course, I'll announce their availability here and on my personal site, with links to the pages that will allow online reading, searching or download of these books.

Delaying the Inevitable: The iPhone No-Show in South Korea

It is interesting to see the local press reaction to Apple's recent unveiling of its newer, faster iPhone.  As reported in the Joongang Ilbo today, "one model is still missing in Korea's abundant cell-phone market, the iPhone."   This is the case even though the Korea Communications Commission eliminated the WIPI software requirement (barrier) in April of this year.  For years, there have been reports that both KTF and SK Telecom have been talking with Apple about introduction of the iPhone, but as yet no results.  Some Korean consumers are obviously eager to get their hands on an iPhone, as illustrated by the popularity of the iPod Touch, which is basically an iPhone without telephone capability.

So what is the problem?   According to press reports, it is that Apple has its own proprietary system of content and applications which would take business away from the content services of SK Telecom and KT.  The Joongang Ilbo article quotes a telecommunications analyst as being skeptical of the iPhone's success in Korea, saying that people have waited too long and that they've already bought the iPod Touch instead.    If you believe this line of reasoning, I have a bridge to sell you.   The delay in releasing the iPhone in the South Korean market, along with Android Phones and any other global competitors, will only hurt Korean consumers, handset manufacturers and ultimately companies like KT and SK Telecom.  Consider the following:

• The iPhone is the best of a new generation of phones that clearly show how the mobile communications industry is entering a transition from phones to handheld computers and devices that also happen to handle voice telephony.  See my earlier post on "Korea's Stake in the Future of Mobile Broadband."


• Consumers in Korea want mobile broadband for everything it will do, including web search, browsing, mobile internet games and so forth.  They do not want to be limited to the content SK Telecom or KT packages for them.


• Yes, bring in the iPhone, Android phones and other smart-phone competitors will increase competition and take some content-business away from the large domestic telecoms service providers!    This is good and is what both industry leaders and the government should expedite.    One the whole, it will benefit Korea by making its companies more competitive in the global market.  


• Given that the entire mobile industry worldwide is entering a seismic shift, South Korea today is only delaying the inevitable for short-term profit.    

Korea to Save Power by Installing Smart Grid by 2030

An article in the Korea Times provides some interesting detail on South Korea's plans to install a smart grid by the year 2030.  The high tech, nationwide electricity grid is expected to create a market worth about $54.5 billion, create 500,000 new jobs annually, and to reduce the country's power consumption by 3 percent.  According to a ministry official, the energy saved will be the equivalent to having seven extra 1,000 megawatt nuclear power generators.  The internet protocol (IP) based electricity network will give consumers more choice, allowing them to pay different rates for electricity used on computers an heating, or different rates for power generated from green technology such as wind or solar power generators.  KEPCO is planning the country's first smart grid test bed on the island of Jeju.

The Mobile Internet is Coming: Korean Web Portals Target Mobile Phones

There is a very interesting article in today's Korea Times, detailing how major web portals in Korea are now targeting mobile phones by formatting their material for handsets.   They include

• http://m.naver.com (a new arrival)


• www.daum.net (since January)


• www.cyworld.com (Mini-cyworld last December)


• mini.paran.com (Paran, the internet unit of KT Wednesday of this week)

As the article points out, traffic to mobile portals remains miniscule as most wireless users (including yours truly) won't touch their expensive data services.  However, as it concludes, all of this will change with the arrival of the iPhone and Android phones into the Korean market.  As noted in an earlier post the mobile market worldwide is shifting not just to smartphones, narrowly conceived, but to hand-held computers with flat rates for accessing the internet.  The sooner South Korea joins this trend the better for its consumers and exporters of mobile phones.

Britons Say Broadband "Essential": Universal broadband at 2Mbps by 2012

73 percent of Britons questioned in a recent survey said that high speed internet was "important."  According to the BBC, the Communications Consumer Panel's research included 16 focus groups and a face-to-face survey of 2,000 people across the UK.  It is expected that Lord Carter's Digital Britain Review, due to be published June 16, will include a government commitment to provide universal broadband at a speed of 2 Mbps (megabits per second) by 2012.

This BBC article caught my eye because 2012 is the year in which the Korean government has pledged to implement 1Gbps (one gigabit per second) internet in all major cities throughout Korea.  In Britain, as in the U.S. people may want to reconsider what speed broadband is essential!

Megastudy.net: Online Tutoring in South Korea

An online tutoring service started in the year 2000 was founded by a former tutor at a private education institute.  His inspiration for the company came while watching a home-shopping channel on television and he intended to help reduce the education inequality that is produced when nearly eight in ten students supplement public education with study in private cram schools, or hagwons.  As noted in a New York Times article by Choe Sang-Hun, Megastudy.net, the online tutoring service Mr. Son Joo-eun started, may be the perfect convergence of South Korean's dual obsessions with educational credentials and the internet.  By tapping into those concerns, which increase during a recession, Megastudy has become South Korea's fastest growing technology company, with sales expected to grow 22.5 percent this year to 245 billion won ($195 million) even as the country's economy is expected to contract.

Online commercial services like Megastudy charge a relatively small fee, averaging 40,000 to 50,000 won ($30 to $40) for each course a student selects from thousands of online tutorials.   Megastudy competes with the government sponsored EBS, which offers similar tutorials for free.    However, it hires teachers with followings that rival those of pop stars.  Last year one Megastudy teacher generated 10 billion won (nearly $8 million) and pocketed 23 percent as his share.

With the country pouring billions of dollars into making the internet ten times faster by 2014, Mr. Son suggested that the world turn to South Korea for a glimpse of what education might look like in the future.  "Offline schools will become supplemental to online education," he predicted.  "Students will go to school, perhaps once a week, for group activities like sports."