A number of changes have occurred in the latest update of the South Korean telecoms market. These relate largely to regulatory practices, which have seen the Korea Communications Commission (KCC), the country’s telecoms regulatory body, examine mobile tariffs. A report produced by the OECD comparing South Korea with 15 similar developed markets showed its tariffs to be significantly higher.

On account of this, the KCC announced it would consider reducing prices by 20%.

Mobile operators are also looking to promote greater content usage, and in early September 2009, SK Telecom launched the country’s first open mobile market place for content. Previously, subscribers were only able to acquire content through their operator’s web portal, significantly reducing their choice. The growing availability of content has also enriched operators’ non-voice revenues, so that ARPU rates have for the most part remained stable compared with other similarly placed markets.

For the first time, BMI has introduced a forecast for mobile blended ARPUs. Based on the historical data of the country’s three operators – SK Telecom, KT and LG Telecom – ARPU fell by just 0.3% in 2008 and 0.7% in 2007. A greater focus on content development, combined with lower prices, should help to bring about flat growth during 2009 to KRW39,739, with ARPU levels easing to KRW39,663 by 2013.

The small decline over our five-year forecast period is expected on the back of aggressive pricing as the market matures.

The launch of the Apple iPhone in the country, expected in 2009, could also play a significant role in terms of ARPU levels and development of the mobile market. It has yet to be determined whether KT or SK Telecom will acquire exclusive rights to the iPhone, which could help to boost market share on account of its popularity. However, given that SK Telecom has launched its own open mobile store, T Store, this could be in direct conflict with Apple’s App Store.

Furthermore, its launch could also have an impact on the mobile handset market, which has long been dominated by local vendors Samsung, LG and other domestic manufacturers.

Meanwhile, in terms of the broadband market, we are seeing a continued increase in demand despite the sector’s maturity. This is occurring on the back of growing IPTV subscriber numbers, rising to over 700,000 as of August 2009, up by 300,000 since the beginning of the year. Much of this has been down to a government-led push to publicise services, making them more popular. However, it has yet to reach the 2mn targeted by the state by YE09, suggesting that the reason for the slow take-up of services has been customer complaints of a ‘dull and patchy’ premium service and limited channel availability.