On 12th March, ‘&TV Communications’ launched ‘Enjoy and TV’ to serve Korean Americans in the US. This was the first attempt for Korean IPTV player to provide its service outside its territory. Considering the nature of internet service, where the national boundary doesn’t exist, Korean IPTV (also an internet based service) was supposed to go to overseas market much earlier.

As a matter of fact, Korea’s leading IPTV service providers, which were backed up by their cutting edge IP technologies, have been stuck in their domestic market for the last couple of years. On the other hand, it was &TV Communications (a joint venture between less known players such as Posdata, Celrun, JEI EDU and Acanet TV) who penetrated global IPTV market for the first time. What’s the story behind it?

In Korea, viewers lost their freedom of choice when it comes to IPTV service subscription. The choice of IPTV service depends on selection of their internet connection service. In other words, viewers can subscribe IPTV service that is provided by the same internet service provider. For example, KT and LG DACOM have provided their IPTV services exclusively to their internet service customers. However, SK Broadband behaved in the different manner. They expanded their target market to the subscribers of other internet service providers. KT and LG DACOM complained about this and finally closed their network with the reason of heavy network capacity. The Telecommunication Committee found this was against the benefits and welfare of citizens and thus asked KT and LG to open the network. They also requested SK to pay for interconnection fee to KT, LG and other MSOs. However, after the event, SK has been focussing on selling bundled products, i.e. they try to sell their IPTV and internet connection service together.

Outside the Korea, when SK Broadband launched its Broad & TV (IPTV) it was so popular among overseas Koreans and other Asian Korean drama lovers. They bought set top box from Korea and brought it back to their home countries. They could watch Korean drama and TV shows without the time delay. However, the Korean broadcasting companies began to complain this time. They disagreed with this because it might harm their profit from selling TV contents to overseas markets. Ultimately, SK closed IP network for the access from outside the Korea. Korea’s IPTV service, with huge potential in the global market, never went beyond its national boundary. It is a shame for Korean IPTV sector because they could have penetrated global market if they could cooperate together. Of course cooperation isn’t easy but not impossible.

Microsoft and its Xbox-360(a sophisticated game machine with internet access function) probably provide some lessons to Korean IPTV players about the cooperation. They lately signed partnership agreements with NBC Universal, Walt Disney, MGM Studio and Showtime Network etc for the contents provision. Microsoft currently limits their market within the US due to the copyright issues. However, their well functioning partnership not only makes us feel jealous but make us hope Korean IPTV sectors to learn something from them.

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Original article written in Korean:

Can you imagine that you collect your nectar point with your mobile phone? It might be possible in the near future because your nectar card function can be embedded in the USIM card in your mobile phone. This will definitely lighten you wallet, which are usually filled with a number of credit cards, royalty cards etc.

However, it is already the reality for the customers of SK Telecom in Korea. SK marketing & company and SK Telecom today launch their new service called ‘OK Cashbag Happy Box’. OK Cashbag by SK marketing & company is Korea’s leading royalty program (80% of Korea’s economically active populations are members of OK Cashbag). And SK marketing & company is unique integrated marketing services provider in Korea covering communications, royalty, research & consulting, commerce etc.

Previously, you have to carry your OK Cashbag card all the time in order to collect your point. And you should visit their website for checking your current points. This inconvenience hinders customers to collect and spend the points more actively. However, you can now collect and check your points with your mobile phone more conveniently as long as you can download the ‘Happy Box’ with your 3G phone.

3G phones which required USIM chip began to be deployed in Korea since 2006. Approximately 40% of customers are now 3G subscribers and this 3G migration is progressing so smoothly. The USIM is not just a small chip that has customer information for mobile subscribers but it has much more potential for providing various mobile applications.

[OK Cashbag in USIM chip]

The Happy Box provides not only royalty card function but also other valuable services. Basically, you can collect your OK Cashbag point at the 4,000 SK petrol stations all over the country. The wireless devices available at the petrol station will accept your 3G mobile phone instead of the card. The Happy Box also provides other services such as Giftycon, Mobile Research and Today’s Fortune etc.

[SK OK Cashbag Happy Box]

Personally, I once involved in a new biz development project regarding USIM. At that time I could find huge potential for USIM applications as a marketing tool. 90% of people now carry their mobile phones in which a chip with significant capacity is embedded. I believe the launch of Happy Box is just a tip of iceberg of USIM based service. Please keep watching on Korea regarding what’s happening with USIM.

Do you still remember Korea’s IT839 Strategy? The Ministry of Information and Communications (MIC), the former communications regulator in Korea, had suggested the government driven IT policy introducing and promoting 8 services, building 3 infrastructures, and developing 9 ICT new growth engines. It has successfully transformed Korean IT industry so competitive today until their dissolution with the new government. After that, there seemed no more significant government push for Korean IT.

[IT839 by MIC]

However, the new government comes up with new scheme called 3-3-7. The Ministry of Knowledge Economy (MKE)’s new strategy aims to support Korean IT sector to penetrate global market. Providing customized marketing support, they selected 13 items and divided them into three categories: 3 strategic items (DMB, WiBro, E-Government), 3 flagship items (Semiconductor, Display, Wireless) and 7 potential items (RFID/USN, Robot, Network, Software, E-Health, LED, Security).

According to this marketing strategy, MKE will play the significant role to help relevant Korean players in those areas to pioneer global market by hosting IT road show, enhancing government relationships and inviting foreign venture capitals etc.

Its first attempt seems to be already in action. Since the president MB Lee’s comment “Mountainous country like Peru definitely needs WiBro” during the last visit to Peru in November 2008, two governments have maintained highly business oriented relationships each other.

[Korean Delegation led by MKE]

As a result, a new delegation led by MKE composed of 100 people from both public and private sector will be sent on 9th March. They will host ICT road shows at the three hub cities  in Central and Southern America such as Bogota (Columbia), Lima (Peru), Sang Paulo (Brazil). Korea’s leading players in DMB, IPTV and WiBro including Samsung Electronics and Posdata will participate in the event. Mr. Lee Han Chul from KOTRA (Korea’s trade-investment promotion agency) mentioned “This event will open the door for exporting our advanced IT such as WiBro” Mr. Choi Won Joon from Posdata commented “Opportunities for WiBro can be found in big countries without established fixed line IT infrastructure like Brazil.”

What Korean ICT companies are good at is developing new innovative services. On the other hand, what they are not good at so far is marketing & sales in overseas market. At least in IT industry, which is directly related to national IT standard and other significant issues, the government surely has a role to support exporting, for example, a political support to help their private sectors to contact foreign public organizations. It is expected that this new government marketing support scheme re-vitalizes the globalization of Korean ICT sector.