WiBro is the Korean version of Mobile WiMax. There are two WiBro carriers, KT and SK Telecom, and their WiBro service brands are KT WiBro and T Login respectively.

The WiBro adoption rate in Korea has been vey slow due to the operators’ low motivation and low interest of customer. WiBro subscribers were, by the end of August 2008, 188 thousand for KT and 3 thousand for SK Telecom. The penetration rate at that time was only 0.4% and ARPU was only 10 US dollars.

First of all, the operators were not motivated to create the new markets in wireless broadband. Korean operators such as KT and SK Telecom do not regard WiBro as their alternative product to HSDPA and FTTH, but as the complementary goods to them. A complementary good does not make enough profit as a single business unit and the investments are also limited. Consequently, the coverage of WiBro network in Korea is limited to the Metropolitan area including Seoul. As their coverage focus is limited to outdoor, the indoor network quality where Wi-Fi usually covers does not meet customers’ expectation. Additionally, they are not active in their advertising and promotion to allure subscribers. Consequently the adoption rate of WiBro is relatively slow, and it will unlikely be changed for the next two or three years.

Secondly, the customers are not in desperate need for WiBro. Basically, they do not value WiBro access to the broadband internet while they are moving. Even the professional segment, which is the most attractive market segment, is not interested in WiBro. Given the fact that they can access the Internet through the stable and excellent wired broadband or Wi-Fi, they cannot find strong reasons to use WiBro, which requires extra money. In addition, the WiBro device, a laptop modem style with limited functions fails to induce customers. Recently, however, PMP (Personal Media Player) and navigation are diversifying their device portfolio in order to expand its target segment and to stimulate the unmet needs of customers. In this regards, they consider including WiBro functions in their products. It would be an alternate solution to enhance the adoption rate that we provide customers with WiBro modem in bundled or built-in manner.

However, this slow WiBro adoption in Korea could be changed soon. SK Telecom recently announced that they would focus on WiBro for their wireless internet strategy. SK Telecom will invest 815 billion won in total for WiBro by 2010. Also they are planning to build the WiBro network system with ‘Wave 2′, twice faster than the existing one, by 2009.

KT is also planning to invest 1 trillion won in total by 2011. KT made strategic partnership with device manufacturer such as Samsung Electroninc, LG Electronincs, TG Sambo, and Cowon for improving cooperation system related to WiBro.

The chart above is WiBro subscriber forecast by 2009 based on the data from June 2006 to June 2008. So far, the blue line is more accurately reflecting the current market situation, WiBro Subscribers are still around 180 thousand.

These days both SK Telecom and KT are promoting WiBro a lot. To promote WiBro, both offer free WiBro for 3 to 6 months to their new customers. With such an active promotion, SK Telecom attracted more than one thousand people as their new WiBro subscriber only in 13 days.

Currently it is still hard to predict whether WiBro is going to be a success in Korea or not. I assume that most of the present WiBro subscribers are using WiBro thorugh the free promotion, so it is yet difficult to say how the market will look like for the longer term.

Following charts are from the 2009 Korea Communication Market Forecast Report by KT Management Research Labotory, Digieco (www.digieco.co.kr). To see in detail, click the charts.

KT Management Research Labotory forecasted that the Korean communication market size will grow to 308.1 trillion won (appox. 220 billion us dollars)

According to the report,  VoIP subscribers will increase by 8.2 billion and market revenue will increase by 270 billion won (appox. 157 million us dollars).

Everybody in this industry is monitoring the IPTV market closely these days. The subscribers for IPTV were, according to the data from June 2008, around 1.5 million. This chart was drawn based on the actual data from July 2006 to June 2008. It describes two possible scenarios, shown by a orange and a blue line, about the future subscriber base of IPTV in Korea.

To see whether the outcome will result in the blue or orange line I searched for other sources for subscriber base and found that there were 1.6 million subscribers by September 2008. Consequently it seems that the prediction shown by the orange line is more similar to the reality than the blue line so far.

Report also pointed out three changes of paradigm from 2008 Korean communication industry as follows:

1. IT governance changes

2. Government policies for IT industry growth changes

3. Competition dynamics change in Korean communication industry

Report also forecasted that the Korean communication industry will change through convergence of media such as broadcasts, telecom, internet, newspapers especially with the start of Korea Communications Commisions, equivalent to Ofcom in UK,

As many blogs and tech news sites have reported the IFPI, or the International Federation of the Phonographic Industry has released a new report on the state of the worldwide music industry. This new report sheds some light on the current trends and gives us some ideas on what to expect from the future. The Industry grew 40% in 2007 and increased its market share in the complete music business from 11% to 15% of the industry.

When focusing on Korea, we find that Korea is the first market in where digital music content values surpassed that of physical, and at this moment digital represents around 60% of the industry. Korea is considered the 4th biggest digital music market in the world after the US, Japan and the UK. In Korea, 63% is from online activity and 37% from mobiles.

Some of the larger players in this market are locals Melon, owned by SK Telecom, and Dosirak, owned by KTF. These are the familiar players in most telecom, media and technology markets. As the digital music market report states, Korea is one of the best examples of potential for the digital music business and for any other digital media in general.