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.

According to KCC(Korea Communications Commission) and SK Telecom, SK Telecom, the leading mobile operator in Korea, will make online marketplace for mobile application in 2009. SK Telecom invests 100 billion won to provide the service, people can sell and buy mobile contents, by next June.

For this service, SK Telecom will provide severs, payment systems and SDK to public. Also SK Telecom is planning to invite the public to join in a prize contest for creative ideas, and support them for commercialization. SK Telecom already set up the team for this mobile contents marketplace.

While smartphone usage is increasing in Korea, SK Telecom seems to need to build its competitiveness in mobile contents through business model like Apple’s App store.

In Korea, the power of mobile operator is very huge at mobile market, so this movement of SK Telecom will affect Korean mobile market in any ways for sure. It might open Korean mobile operators’ closed policy for mobile contents. However, like SK Telecom’s previous plan for mobile contents or internet, it could make walled garden at Korean mobile market more.

SK Telecom has strived to enter into the contents market by acquiring IHQ(movie production), CUmedia(formerly known as YTNstar, entertainment channel for cable broadcasting) and other small players. But there was no viable return from those efforts.

Yesterday, CUmedia and Korea’s No.3 cable MSO C&M decided to establish a joint company according to one of the established internet media.

Through this agreement, CUmedia secured stable path to distribute their contents through C&M’s network. Form C&M’s perspective, they can counterattack other MSOs who have  been expanding their contents business portfoli aggressively. In fact, CJ and Tbroad owned powerful program prividers as subsidiaries and made continual acquisition of small PPs.

Korean IPTV, on the other hand, has been in a bottle-neck for contents supply due to the politics between cable MSOs and PPs. However, yesterday’s news about the joint company gives the clue that SK Telecom, the mother company of CU media and SK Broadband (No.2 IPTV Provider), could overcome their disadvantaged position in contents supply nogotiation.

And I hope this news could trigger the dynamic growth of the whole Pay TV market in Korea by providing fair environment for competition among all Pay TV players.