Mobile communications in South Korea
The Mobile Communication Industry in South Korea
As of March 2009, the number of mobile subscribers in Korea nearing 46 million total mobile subscribers and the nation’s penetration rate almost 100%. Mobile telecommunications services in South Korea are served by three operators: SKT (SKTelecom), KTF (Korea Telecom Freetel), and LGT (LG Telecom). SKT represents 50.50% of the market share, KTF 31.54% and LGT 17.95% as of December 2007. The nation first launched its mobile telecommunication services in 1960.
Changes in the number of mobile subscribers are indicated in the table below:
unit: number of subscribers
| Dec. 2001 | Dec. 2002 | Dec. 2003 | Dec. 2004 | Dec. 2005 | Dec. 2006 | Dec. 2007 | |
|---|---|---|---|---|---|---|---|
| SKT | 15,179,063[1] | 17,219,562 | 18,313,135 | 18,783,338 | 19,530,117 | 20,271,133 | 21,968,169 |
| KTF | 9,590,698 | 10,332,770 | 10,441,766 | 11,728,932 | 12,302,357 | 12,913,699 | 13,720,734 |
| LGT | 4,275,835 | 4,790,161 | 4,814,046 | 6,073,782 | 6,509,849 | 7,012,283 | 7,808,638 |
| Total | 29,045,596 | 32,342,493 | 33,568,947 | 36,586,052 | 38,342,323 | 40,197,115 | 43,497,541 |
In March, 1984, the Korean government permitted the Korea Telecom to establish the Korea Mobile Telecom as a subsidiary dealing with mobile services. The Korea Mobile Telecom was to provide analogue cellular service employing the method of AMPS (Advanced Mobile Phone Service) in Seoul metropolitan area including Seoul, An-Yang, Suwon, and Sung-nam. In May, 1988, the Korea Mobile Telecom launched a full swing mobile communication business, expanding its scope into areas beyond Seoul and its vicinity, and at the end of 1991, the entire nation came to enjoy mobile services.
In 1994, in an effort to restructure communications industry, the Korean government announced its selection of a second mobile service provider, Shinsegi (which was later merged into SKT in January, 2002), and privatized the Korea Mobile Communications. As a result, the era of monopoly ended in the nation’s mobile communications service, laying groundwork for duopoly.
The market became truly competitive in April, 1996, when Shinsegi started providing services using the method of CDMA. In June, 1996, the Korean government selected PCS (Personal Communication Services) providers, which would compete with the aforementioned companies, the so-called “second generation mobile services companies.” The goal of the government was to secure competitive environment in the nation’s communications market. The Korea Telecom Freetel, LG Telecom, and Hansol PCS (merged into KTF in May, 2001) were the three selected PCS carriers and began their PCS business in October, 1997. With Shinsegi and Hansol PCS out of the picture, only SKT, KTF, and LGT are currently competing in Korea’s mobile communications market.
Each company's financial status as of 2006 is indicated in the table below:
unit: KRW million
| SKT | KTF | LGT | |
|---|---|---|---|
| Sales | 10,650,952 | 6,057,350 | 3,943,456 |
| Operating Income | 2,584,370 | 668,747 | 416,532 |
| Ordinary Income | 2,021,580 | 513,770 | 83,700 |
| Net Income | 1,446,598 | 411,702 | 237,986 |
The ARPU (Average Revenue Per User) of each company is as follows: SKT is 44,599 KRW (as of 2006), KTF 38,899 KRW (as of 4Q/2006) and LGT 35,700 KRW
Notes
[1] The # of subscribers of SKT in December 2001 includes those of Shinsegi, a former mobile telecommunication company, which was later acquired by SKT in January 2001.
References
1. 'The Status of Fixed and Mobile Telecommunication Service Subscribers' by the Ministry of Information and Communications
2.Song Weejeen 'Korean Mobile Communication leaps from the era of a chaser to that of a leader' ISBN 89-7633-277-6
3. Annual Report 2006 by SKT, KTF and LGT