Here is a bit of good news out of Korea. This report may show that wireless infrastructure is so important that its growth will continue even under adverse economic conditions...
Korea's Telecom Market Grew 15.2 Percent in First Half
August 31, 1998 (SEOUL) -- Korea's economic crisis has not stopped the
growth of its telecommunications market, as wireless services performed
well in the first half of 1998, according to the Ministry of Information and
Communications.
The ministry reported that first-half sales of telecommunications services
in Korea increased 15.2 percent to 6.25 trillion won (US$4.8 billion) from a
year earlier, led by a 38.2 percent rise in the wireless market. Sales of
fixed-line services including leased lines edged up 0.1 percent
year-on-year.
As a result, the wireless share of the Korean telecom market grew to 44.7
percent in the first six months from 40.4 percent in 1997. The growth
trend will likely continue with technology allowing wireless carriers to offer
higher-quality services for less expensive prices. Korean consumers are
increasingly opting for mobile communications.
"A drastic change is taking place in the structure of Korea's telecom
market," the ministry said, citing a continuing shift to wireless
telecommunications, which began only a few years ago.
The introduction of digital PCS (personal communications service) in
addition to conventional mobile phones last October provided a further
boost to the market.
Wireless telecom services appear to have bright prospects. The industry is
faced with the worst slump this year as the economy is shrinking amid the
domestic and regional economic crisis.
In the first half, the Korean cellular market grew 60.1 percent, with
revenues of 2.27 trillion won. Korea's five cellular providers including three
PCS carriers added 3.35 million subscribers, bringing the total to 13.53
million in the first half. About three out of 10 Koreans subscribe to
wireless communications services.
SK Telecom retained the largest share, accounting for 61.1 percent of the
cellular market, although its share declined from 87.7 percent a year ago
amid intensifying competition. Shinsegi Telecomm Inc. had 13.9 percent,
and three PCS carriers -- KT Freetel, Hansol PCS Co. and LG Telecom Co.
-- divided the remainder almost equally.
The paging market, which had enjoyed more than 50 percent annual
growth between 1994 and 1997, is losing ground to cellular services with
more subscribers upgrading to digital handsets. Paging sales fell 5.4
percent in the first half from a year earlier.
Fixed-line sectors are taking the brunt of Korea's recession, with many
corporate clients going out of business. The surging popularity of mobile
phones is also coming at the expense of fixed-line businesses. While the
domestic call market, which is divided between Korea Telecom and Dacom
Corp., is seeing a slow decline, international services are growing at a brisk
pace.
Revenues associated with international calling services increased 17
percent in the first half despite the commercial deployment of Internet
telephony, which allows calls to be placed to almost all foreign
destinations at more than 50 percent discounts from regular rates. About a
dozen companies offer Internet telephony, which is catching on rapidly in
Korea.
Online services are another winner in Korea's changing telecom market.
The five largest online companies saw their first-half sales surge 61.8
percent to 131.2 billion won. Dacom Corp. remains the largest Internet
service provider, with 39.8 percent of the market.
(James Lim, Asia BizTech Correspondent) |
