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 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,

The TV market is rapidly changing and of course this is notable also in Korea. Mobile TV, IPTV and so on are changing the playground and many changes and merges are to be seen. I’m currently working on a mobile TV report but I just thought I should mention something about IPTV in Korea as well.

One interesting alliance is between KT (Korea Telecom) and Sony. KT launched an IPTV service called Mega TV earlier this summer and is competing with Hana TV from Hanaro and soon also with LG. Sony is, as we know, competing against Wii and XBox 360 on the video game market, a lucrative market in Korea. Therefore, KT and Sony went together and added the feature that the Playstation 3 (PS3) can be used as a set top box for IPTV. This is an interesting approach to promote both new subscribers for KT and an extra teaser to buy PS3 for the gamers. Simply an alliance that provides mutual benefits and it will be interesting to see how it works out. Hopefully it can be another example where Korea becomes a front runner and a test market for something that the world will benefit from some time ahead.