As 2007 has come to an end, it is a good time to be updated on the Korean mobile market. The market is rather stable and the market shares are rather intact between the three big ones in Korean Telecom - SKT, KTF and LGT.

SKT was fined a couple of years ago due to legislative problems for having a market share above 50% and they are therefore restricted to grow any more (which also means they are having serious international ambitions for the moment). However, as the number of users still increase (mobile penetration is around 90% today) they managed to increase the customer base with more than a million. 2007 was a good year for the mobile market in general and the users increased more than before. However, as the amount of users soon will be peaking, the fight among the existing users will be tougher. LGT are the price pressers and they launched a service of free calls among its customers (for a small monthly fee) in 2007 which forced SKT and KTF to include similar price changes. LGT is not the one with the most new customers in absolute numbers, but they still managed to steal a percent from KTF. KTF are emphasizing the HSPA service very much for the moment.

For more information about the Korean mobile market, feel free to contact me or my company Veyond

Prestigious Financial Times included an article today about the Korean search market. Korea is, as you may already know, not “googlearized” as most other search markets in the world. Instead is Naver the leading portal. Actually, the article states that Naver now is the fifth biggest portal in the world. In Korea, 77 % of the internet searches are made there. Second is Daum with around 11 % and then Yahoo with around 4 %. Google? They have a share of below 2 % of the searches…

According to TechCrunch, Google is currently aiming at the Japanese market and the big search engine in China, Baidu, just lost its CFO under mysterious circumstances. Naver remains strong in Korea and are currently testing around 100 new innovations according to the FT article. One of the key benefits of Naver is the service Jisikin (means something like knowledge person) where people interact by asking and answering questions.

What this really shows is how very developed the TMT (Telecom, Media & Technology) sector in Korea is. “Higher penetration of personal computers, innovative technology and amazing mobile speed well explain why we should increase investment here” Susan Decker (president of Yahoo) said earlier last year in Seoul according to the same article. I couldn’t agree more and would not be surprised if Google is a bit worried that Naver have international ambitions (next up is Japan).

TU Media has been able to acquire the simultaneous re-transmission rights from MBC according to an interesting article I just read. This represents a big step for TU Media but it comes two and a half years too late.

As TU Media started operations in mid 2005 it tried to acquire simultaneous re-transmission rights from broadcasters. This means that S-DMB viewers would be able to watch popular dramas and shows simultaneously with fixed TV. These contents are considered the most popular on both fixed and mobile TV. However, previously have broadcasters been reluctant to share these contents because they wanted to use it for their own T-DMB service. This is why S-DMB had to focus on other contents like sports and news. But the lack of “killer” contents from fixed TV hindered S-DMB development (as shown in the graphic above). Until today it had been able to acquire approximately 1.26 million subscribers. But according to TU Media they need approximately 2.5 million subscribers to be profitable. As a result, as reported two weeks ago, SK Telecom is thinking about limiting its involvement in TU Media.

But also T-DMB is struggling to build a profitable business. Despite more than seven million T-DMB devices in Korea the advertising revenues are marginal. Which partially is the result of very restrictive legislation on advertising but also broadcasters have failed to develop an attractive mobile advertising value proposition to make this channel more attractive for advertisers.

Experts are blaming policy for allowing two different mobile TV standards and businesses. Their competition was one of the main obstacles that mobile TV could not develop its full potential. So is mobile TV doomed in Korea? I do not think so, because consumers have embraced this new medium and it is very likely that broadcasters will take mobile TV more serious and endeavor to make mobile TV advertising more attractive for broadcasters. Until 2012 more than 20 million T-DMB devices are expected, so mobile TV has a future in Korea. In these days I am finalizing the mobile TV report I have been working on recently, so if you are interested in a more in-depth analysis of the Korean mobile TV market let me know. I am eager to share it with everybody who might be interested.