SKT has called on the government to reject a plan by KT to merge with its wireless affiliate KTF, saying the merger will create a telecom giant and make it impossible to compete fairly.

From SKT’s point of view:

The KT/KTF merger will make an interactive transition of KT’s dominent position in the fixed-line telephone market into the mobile phone market. Becasue of that, the underlying competition in terms of developing new technologies or products in the telecom market will disappear. Just the competition in marketing will become severe, which means most investment, which is supposed to be made in R&D, is most likely to be used for markeitng purposes.

From KT’s point of view:

As Korean telecom market has been completely saturated, telecom operators are struggling to find a new way of services more appealing to customers, which is in line with the global trend in fixed-mobile convergence. The KT/KTF merger will enable KT to provide various converged products that customers can certainly benefit from at lower price so that the competion in Korean telecom market can lead to cheaper but high-quality services to customers.

We will see how Korea Communications Commission(KCC), the country’s broadcasting and telecommunications regulator, responds to it.

ZDNet Korea posted that 2008 top 10 news at Korean communication industry. In that article, author said, the keyword of 2008 at Korean communication market is

“Convergence”

Followings are top 10 issues that ZDNnet Korea picked,

1 Korea Communications Commission(KCC) has been founded

As convergence between broadcating and telecommunication is progressed fastly, the needs for integrated government agency for both broadcasting and telecommunication has increased as well. In that reason, Korean government founded Korea Communications Commission (KCC), the goverment agency similar to Ofcom in UK, early this year.

2 Commercial IPTV service has began

From last November, the first commercial IPTV service, KT’s Mega TV has began in Korea. Actually many experts thought that it would be difficult to launch commercial IPTV service this year because broadcasting agreement between broadcasts and IPTV providers was facing rough. However Korean government eager to make IPTV successful as Korean next growth engine, other IPTV operators also will provide commercial service by next January.

3 Leak of personal information issue

In 2008, people heard several accidents about leak of personal data from companies. Not only internet based company such as Auction and Daum, but also the comanies in other industries including GS Caltex and Hanaro Telecom had those accidents. By several accidents, people realized the leak of personal data as serious problem more. Also Korean government is actively looking for protecting privacy more than before.

4 Deliverying scandal of KT and KTF

KT and KTF had been bad this year. Former KTF’s president Cho and Former KT’s president Nam was arrested for taking bribes from the deliverying companies. Due to this scandal, M&A between KT and KTF was also postponed.

5 Duty of loading WIPI will be released by next April

As I posted already, KCC released the duty of loading WIPI by next  April. This will affect mobile operator as well as mobile device manufacturer. It seems to be more foreign mobile device like iPhone or Blackberry will be launched in Korea next year due to this releasing.

6 M&A between communication companies

As the convergence between broadcasts and telecommunications, M&A has been accelerated more and more. SK Telecom, the leading mobile operator, merged Hanaro Telecom, the broadband operator, last February. M&A between KT and KTF seems to be progress next year and LG Dacom, LG Powercom, and LG Telecom are considering M&A as well.

7 Communication firms began selling Bundling packages

In 2008, bundling packages like DPS, TPS or QPS has sold initially. SK Telecom has mobile, broadband, IPTV and VoIP through M&A with Hanaro Telecom (as is SK Broadband). KT and KTF also launched bundling products including mobile based on fixed or broadband products.

8 VoIP market is ready to grow

I also posted about this issue previously. As number portability for VoIP has began, VoIP for home market has increased and is forecasted to grow more next year. As KCC also allowed to provide Voice over Wibro recently, wireless VoIP is expected to come next year.

9 Grand National Party proposed to reivise the law on broadcating

Grand National Party proposed to revise the law on broadcasting, mainly about releasing the restrictions on press holdings.  However the opposition party and NGOs are against that law. Also The National Union of Media Workers decided to begin strike from December 26th in the face of opposition. This issue would be continuing next year.

10 Intense marketing competition at mobile communication market

During the first half, three mobile operators, SK Telecom, KTF and LG Telecom spent lots of money into marketing. Marketing cost of MNOs reached 31% of their revenue at the first half. This was totaly zero sum game for players, so players changed the policies as keeping their subscribers not attracting new customers from competitors.

Following the Broadband Convergence Network program (initiated by the Ministry of Information and Communication), Yujin Robot, Spread Telecom and KTF have worked together to create a new domestic robot. Based on a vacuum cleaner model, like the iClebo, this prototype is able to communicate with your mobile phone, in order to let you control it, and send you a text message when somebody comes into your house. This is another step in the government initiative to make robots a common tool, in the everyday life, available to a large array of people. The country heralds a goal of a 100% robot market penetration by 2020.

Tellingly, using the near universal broadband access, Korean companies are making robots closer to people, through this so-called control of robots : we can follow the robot journey in the house, and the robot can help us staying closer to our home. Therefore, the technological convergence is also a distance convergence. New technologies help you to reduce the distance between you and your house or relatives. In Korea, new technologies are progressively integrated in the Korean everyday life, by addressing emotional and personal matters, as our home security. This is true for the robots, but this is also true for the mobile phone , as I said yesterday.