KT to Seek Management Control of BC Card

In another symptom of the coming era of mobile broadband and ubiquitous networking, Korea Telecom has announced that it plans to buy a large stake in BC Card and eventually gain management control of the company.  According to the Joongang Daily, KT has already signed a memorandum of understanding to acquire Shinhan Card Co.'s 14.9 percent stake in BC Card (see graphic).  A spokesman for KT said that "We see a great possibility in creating synergy between telecommunication and finance."

An earlier post noted that e-business in Korea is mired in the past because of an overly-heavy reliance on Microsoft software, and legal requirements that led banks and other businesses to require the use of Microsoft's Internet Explorer and active-X controls for internet transactions.   Obviously, Korea Telecom is looking beyond the present situation to a future in which most Korean consumers will use mobile broadband via iPhone, Android or other handsets.  There are currently over 24 million mobile phones equipped with USIM (universal subscriber identity module) chips which can identify subscribers and store various content, including credit card information.  In addition, KT is reportedly mulling over new services in which a customer might search for a restaurant using their smart phone, pinpoint its location, and pay the bill using a credit card and coupons downloaded to the smart phone from web sites.

The mobile broadband era is coming to Korea, and it is going to arrive very fast, for the simple reason that consumers want mobility and they want these services, just as in other advanced countries around the world.

Google to Test Fast Broadband in Selected Communities

Google announced on Wednesday that, in an effort to spur innovation in the United States, it would launch a project to offer fast broadband service in selected communities.  According to The New York Times, and a post on Google's corporate blog, the company will test a high speed fiber optic broadband network capable of allowing people to surf the web at 1 gigabit per second.

How does this relate to Korea?   As many of you know, this country is already building a nationwide fiber optic network that will deliver gigabit per second broadband speeds to all major communities in the country by 2012.  If Google and Korean policymakers are correct, this should make South Korea, along with Google's selected communities in the U.S., centers of innovation!

Korea's "IT Powerhouse" Paradox

I've been puzzling a great deal these past several months over the paradoxical situation that exists in South Korea.   On the one hand, this country has the most advanced and extensive digital networks in the world, yet it managed to lag behind much of the world (80 or more other countries) by two and a half years in adopting  mobile broadband, as symbolized here by the Apple iPhone.  How could a country that invests so much in education, R&D and infrastructure, find itself in this situation?  The following are some thoughts I have.  They are only initial attempts to find an answer, and I'd love to receive some incisive comments on this post.

• The information and communications technology (ICT) and telecommunications sectors in Korea are dominated by large companies, including the chaebol groups.  Inside these large companies the workers and the labor unions exert a great deal of influence, making it difficult for them to adapt quickly to technological change.


• The established mobile service providers, along with the manufacturers of handsets and network equipment, were making a lot of money with the current arrangments, so why upset the apple cart by introducing the iPhone or Android phones to the Korean market?  If we include the government here, another interpretation could be that, while profitable in the very short term, this was a costly policy mistake for Korea over the medium to long term.


• Finally, I cannot help but observe that language and culture played a role in all of this.  After all, Koreans have not yet widely adopted Google as an internet search engine, preferring Naver to search within a Korean-language walled-garden.  Heavy dependence on Naver and other Korean language portals, along with overly-heavy reliance on Microsoft, undoubtedly contributed to the lag in introducing real mobile broadband via the iPhone and Android phones. 

These are some of my preliminary thoughts.  What is missing in this picture?  I invite your comments.