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Broadband Access
South Korea: A country driven by success
Making ICT and broadband Internet a touchstone of national policies
by Ek Heng, Asia-Pacific Correspondent
South Korea was the first nation in the world to commercially launch broadband Internet, when it became available in 1999, based on Asymmetric Digital Subscriber Line (ADSL).
Since then, South Korea has continued to tweak its Info-Comm Technology (ICT) strategies built on a high-speed broadband Internet highway. The country is recognized for its global leadership in communications technology and cited often as a model to emulate.
At a third ITWeb eGovernment conference in March this year in South Africa, a South Korean telecoms expert, Dr Cheung Moon Cho, revealed that up to the 1980s, South Korea’s telecom infrastructure was under-developed with just 7 percent tele-density.
He said that by the 1990s the country succeeded in becoming an ‘information society’ with excellent e-government infrastructure, widespread use of e-commerce and other cutting-edge Internet services. During that time, it further built on its achievements to be a hotbed for innovations and became an exporter of IT and communication technology products.
See figure 14. High Broadband Connectivity, Fastest International Countries
World’s highest Internet penetration
In terms of mobile subscriptions, South Korea has reached saturation with 95 percent penetration while broadband Internet usage is 73 percent for its population, aged 6 and above. The pervasive use of the Internet extending up to 90 percent of households epitomizes South Korea’s success in its ICT strategy in general and broadband in particular.
The country can lay claim to being one of the early ones to take advantage of Qualcomm’s CDMA technology. Its early start in mobile technology provided the impetus for South Korea to be among the first to implement 3G services. This explains why the country has 40 percent usage in mobile broadband.
South Korea’s situation is summed up by the International Telecommunications Union which said that its national policy helped its residents thrive despite its relatively low per capita income compared with western European countries. “In South Korea, the government has practiced a very IT-focused policy, making it one of its priorities, resulting in faster evolution towards the information society,” the report said.
Infrastructure and eco-systems
The country’s success as an ICT powerhouse is due in no small measure to the far-sighted government initiatives where strategies put in place are mindful of the point that ICT infrastructure development must be accompanied by investments in the eco-system. Ultimately, it is also a reflection of successful collaboration between government, academic and industry sectors.
Nonetheless, the government’s pivotal role is highlighted in a recent case study by the Organization for Economic Cooperation and Development (OECD) entitled ‘Trade and Innovation in the Korean Information and Communication Technology Sector’.
The case study brings into focus the series of ICT plans by the government from the mid-eighties. It was followed through by the Korean Information Infrastructure (KII) initiative in the mid-nineties which proved to be a landmark. Highlights include the construction of a national high speed backbone, the development of ICT applications, and the promotion of R&D and IT-related projects.
The researchers draw attention to the benefits of some policies that are mutually reinforcing, namely in the areas of lower service charge, due emphasis to step up IT education as well as measures to enhance competition.
To build up critical mass, the government initially pushed for an extremely low price for the public sector and free Internet service for schools. The result was a strong pick- up of the pace in informatization by the general public in tandem with the education policy. Market demand further spurred service providers to offer lower prices along with ICT literacy drive across the entire population. The authorities ensured a level playing field for late-comers for mobile operators and facilitated the introduction of number portability which prompted the large uptake of mobile phones by consumers, from three million in 2004 to 16.8 million by 2006.
Maintaining top speed
Seen from another perspective, Akamai, whose software is used to facilitate the transfer of more than half of rich media on the Internet, said that its studies on broadband connection speeds show that South Korea is the top globally with an average of 15 Mbps. This is 10 times faster than global average where it monitors broadband connection speeds, even when measured against advanced economies.
With theoretical wired broadband capability at 100 Mbps, the country is mindful of the need to stay ahead of competition. The Korea Communications Commission (KCC) recently announced a plan to spend US$24.6 billion over the next five years aimed at increasing Internet broadband to support 1 Gbps or 1 Gigabit access. In addition, wireless services will be stepped up to 10 Mbps.
Mirroring the global broadband journey
The country’s initial success with ADSL was attributed in part to South Korea’s unique situation where 90 percent of households live within four km of a local telephone exchange. This physical distance limit is significant as signals begin to decay beyond the stated radius. As a result, South Korea has consistently ranked among countries with the highest broadband penetration since 2001.
Towards this end, South Korea’s phenomenal success in transforming and re-inventing its digital economy is as much a reflection of the global broadband journey. The Global Broadband Forum, comprising 200 members dedicated to promoting the sector, appointed an ICT industry analyst, Point Topic, to produce a report of the journey by the forum.
Beginning in 1998 with just 57,200 ADSL subscribers worldwide, the numbers grew six times to over 280,890 subscribers in just one year. DSL quickly became South Korea’s choice of delivery, the Point Topic report said. It added that the past five years have seen 300 percent annual increase in subscribers who now top 400 million.
“Over the same period, access technology evolved to include fiber, which began in 2002 with 18,000 subscribers,” the report continued. “Since then, fiber now delivers broadband services to over 45 million people across the globe.” An update by the Fiber to the Home Council Asia Pacific indicates that Asian economies maintained their leadership in FTTH penetration with South Korea accounting for 44 percent of the market.
Figure 2. Economies with the Highest Penetration of Fiber-to-the-Home/Building+LAN)
A nation of early adopters
A firm believer in first-mover advantage, South Korea has consistently been a pioneer in adopting new wired and wireless communication technologies as well as being a test-bed for innovations.
Among others, South Korea is the first in the world to launch commercial satellite Digital Multimedia Broadcasting (DMB) services in June 2005 for mobile handset users to watch TV while riding public transport. Together with Japan, the two countries are pioneering nations in the implementation of 3G mobile broadband. This was followed by South Korea’s development of WiBro, which is a local version of WiMAX, an international standard, commonly regarded as a 4G mobile broadband wireless offering. It also ranks high in patent productivity for its R&D personnel and accounts for 47 percent of the global memory semiconductor market, 41 percent of the LCD sector and 22 percent of the digital TV market.
As the emphasis shifts to high bandwidth, South Korea’s proposed 1 Gigabit Internet highway puts it in good position to capitalize on the ITU announcement on the first global standard in high definition TV under the G.hn banner. Adoption of this standard will pave the way for end-to-end delivery of broadband data streams, regardless of transmission media - from powerline or coaxial phone to other home network wiring. Speed is another benefit as it will facilitate the throughput of existing wireless technologies by up to 20 times and three times that of existing wired technologies.
South Korea expects its US$24.6 billion ICT initiative will create 120,000 jobs and ultimately facilitate a network for 16 times clearer TV signals and interactive TV services for e-commerce as well as home schooling. The commission is also projecting Digital TV coverage to increase to 96 percent by 2012, up from current 87 percent.
Lending credence to the official projection is the latest market study by TNS’ Global Telecoms Insights. For the mobile device being considered for purchase, the report shows that mobile TV feature is considered important by 33 percent of South Korean consumers, well ahead of MP3 and camera. Another example is in music download which is 24 percent for South Korea, 21 percent for Japan and just 4 percent for the UK. Adding to government efforts, service providers in markets like South Korea show they are savvy in making data affordable thereby opening the door to incremental revenue from value-added services.
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