South Korea: A Window into The Future

Just how successful is the South Korean wireless industry you ask? Consider this: South Korean operators launched their CDMA2000 1X services way back in the fourth quarter of 2001. This is a standard that many experts consider to be a 3G technology because of its speeds of 144kbits/second. Some will argue that it is not a true 3G technology, but judging by the data intensive services Koreans are utilizing on the network, it is as close as anyone has come to 3G. In the 8 months following the launch of 1X, the Koreans had created a user base of more than 12 million subscribers (some say the number is 16 million today), according to Ovum, a wireless consultancy based in London. That’s more than a third of the 31 million mobile subscribers in the entire country, which by the way, represents a market penetration of more than 65 percent of the total population.

The Koreans have shown a remarkable knack for transitioning customers onto newer phones and faster services. In Japan, where NTT DoCoMo’s FOMA network – a real 3G network capable of 384 kbits/second and streaming video – has only been able to entice a tiny fraction of its customer base onto the new service. According to Strand Consulting, an independent consultancy based in Copenhagen, only 4 out of every 1000 mobile users in Japan are using a FOMA terminal. Compare that to 400 out of every 1000 in South Korea owning a 1X terminal, and you start to see the disparity.

“Everyone is talking about Japan and DoCoMo and i-mode, and that is a classic case of the emperor has no clothes,” says John Strand, president of Strand Consulting. “i-mode’s biggest success was in getting the international marketing around it, but what makes Korea so interesting is that they have been up and running with 1x for one and a half years. People are paying more for the advanced devices, generating more revenue, and using more airtime. Korea is the land of milk and honey.”


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