South Korea’s Mobile Market at Critical Mass
As handset subsidies for new subscribers has been frozen, the growth of the cellular market has continued with rapidity, as South Korean cellular operators recorded almost 30 mil. subscribers to their services at the end of February.
by William Morrison
Friday, March 08, 2002
The number of subscribers to mobile phone services in South Korea (pop. 48 mil.) is coming close to breaching the 30 mil. barrier as cellcos registered 29.67 mil. subscribers at the end of February. That’s up 1.5%, or 434k from January. The carriers said that they felt that the services had been propelled by an abundance of promotions for different services and aggressive marketing across the board from different companies trying to outsell each other.
South Korea’s leading cellco, SK Telecom, has secured around 15.57 mil. subscribers to its services. That represents a hike in subs by 239k from January. Second biggest cellular operator KTF recorded 9.76 mil. subscribers, whilst the LG Telecom had 4.32 mil. users registered to its services. LG Telecom has actually felt the pressure from the leading cellcos aggressive marketing strategies as its market share fell by around 1% from January to February.
The government instigated a ban on the cellcos offering users subsidies on mobile phones because of the unfair competition that this was creating, as well as a huge debt pile it created as companies simply refused to back down in pricing wars. At the moment, subsidies can be extended to existing customers, with only new customers unable to benefit from them. Whilst that may prevent a glut of newcomers hiking the market shares of established companies, subsidies from existing users prevents any churn as customers are less likely to move freely between operators.
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