2012-09-06 08:55:10 - South Korea Telecommunications Report Q1 2012 - a new market research report on companiesandmarkets.com

BMIs Q112 report on South Koreas telecommunications market provides a comprehensive overview of the latest developments to occur within the countrys mobile, fixed-line telephony, and internet sectors. This quarter we have extended our five-year growth forecasts through to the end of 2016. Our forecasts are based on Q311 data published by South Koreas leading operators - SK Telecom, SK Broadband, KT, and LG Uplus.
By the end of September 2011, South Korea had 52.121mn mobile subscribers, reflecting a net gain of 1.353mn customers in the first nine months of the year. We maintain our forecast that, by the end of 2011, the mobile subscriber base will increase to 56.2mn. This gives South Korea a mobile penetration rate of 108.7%. Although

 

 

the South Korean mobile market is already mature, continued mobile customer growth has been the result of stronger smartphone handset penetration rates and the provision of flat-rate data services offering cheaper tariffs. Growth in the number of smartphone customers has a direct effect on the countrys 3G subscriber base, which we now estimate reached 47.75mn at the end of 2011. Our new forecast envisages 57.19mn 3G subscribers by the end of 2016, almost 98% of the total mobile subscriber base.

By the end of 2011, we estimate that South Korea had 27.08mn fixed-line subscriptions, reflecting annual growth of 3.2%, a penetration rate of 56.0%. Much of the recent growth that has characterised South Koreas fixed-line sector is the result of an increasing number of VoIP subscriptions; these are offered over broadband internet connections of a bundled service offering. Between 2012 and 2016, we envisage average annual growth of 1.3%. This will result in a market with 28.83mn fixed-line connections and a penetration rate of 58.5%.
We maintain our view that South Korea had just more than 37.4mn internet users at the end of 2011, up by 1.1% over the year. We also estimate that South Korean had 18.1mn broadband subscribers at the end of 2011, up by 5.1% y-o-y. This was a penetration rate of 37.4%. We expect slower broadband subscriber growth to result in increasing competition in the area of bundled and converged services. Our newly extended forecast envisages 20.37mn broadband subscribers and 38.67mn internet users at the end of 2016, with penetration rates of 41.4% and 78.5%.

Key developments of note in South Koreas telecoms sector include the news in December 2011 that the countrys second largest cellco KT faced a new stumbling block in its plans to introduce LTE-based 4G services in the form of its existing 2G customer base. KT had planned to use the 1.8GHz 2G service frequency for its LTE service. However, it now appears that around 159,000 2G customers had refused to give up their 2G mobile phones or network services. The operator had planned to halt its 2G service on 8 December 2011 and had even received approval from the regulator to do so. However, the Seoul Administrative Court subsequently blocked these plans. The courts decision made it unlikely that KT would launch its 4G service before the end of 2011. By contrast, rival operators SK Telecom and LG Uplus both announced the commercial launch of LTE services in June 2011.

South Korea has fallen from 4th to 5th position in BMIs latest set of Business Environment Ratings for the Asia Pacific Telecoms markets. This is in spite of receiving higher scores in the Country Risks category. We expect South Koreas real GDP growth to slow to a below-consensus 3.1% in 2011 and 2.4% in 2012. This comes on the back of a rapidly deteriorating global economy, which is likely to weigh heavily on South Koreas export-dependent economy. Meanwhile, we believe that the sudden death of North Korean leader Kim Jong Ils poses new risks for East Asian security. Although his son Kim Jong Un appears to be taking over, the younger Kim has little political experience to run what is one of the worlds most troubled countries. We therefore believe there is a high possibility that he will be a mere figurehead, with real power wielded by the military. Over the long term, we could see tentative reforms, although there is still a risk of eventual state collapse. The price of this market report covers 4 quarterly reports on this sector. This quarterly report will be downloadable instantly as a PDF document, with the 3 remaining reports delivered at regular intervals throughout the year.

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