Mergers in Korea's Telecoms Sector

An article in the Korea Times, accompanied by a nice graphic, depicts the major shifts taking place in South Korea's telecommunications sector. In order to effectively compete in a market characterized by rapid convergence and in which the ability to sell bundled digital services will determine success, several major companies have merged or will soon merge. As shown in the accompanying graphic, the mergers began with KT absorbing its mobile affiliate, KTF. More recently, it was announced that three units of the LG Group will merge. As the Korea Times article spells out, it appears to be only a matter of time before SK Telecom merges with SK Broadband.

As broadband internet, fixed line telephony and mobile internet service all converge, it seems apparent that the mobile communications market will be reshaped into one in which content, applications and software make up the main arena for competition. This is in line with global trends.

KT to Allow Free Internet Phone Calls

As reported in the Korea Herald today, Korea Telecom announced that it will allow free internet phone calls from its mobile handsets. KT said it will introduce a plan which enables both traditional cell phone services and Wi-Fi connections for free internet phone calls. According to a statement, the company sees wireless internet as a growth engine for the future. Telecom companies in Korea have been reluctant to promote internet phone calls for fear that they would cut into revenues. Indeed, KT estimates that the move could initially slash its revenues. It expects a 35 percent reduction in fees for cell phone calls and an 88 percent drop in data transaction fees. However, the new service will be limited to three designated smartphone models.