Thursday, February 25, 2010

SK Telecom Still Doesn't Get It: Smartphones and VOIP Services

It appears that the leadership of SK Telecom, South Korea's leading mobile service provider, have not yet comprehended what is happening to the mobile communications market here, and the implications for their business, both medium and long term.  As noted in the Joongang Daily, beginning next month SK Telecom will start charging customers for voice services on a per-second basis, rather than in 10-second increments.  This will make Korea the fifth country to have such a charging system and will save SK Telecom users an estimated $14.5 million every month.  However, at the same time SK Telecom announced that it would continue to block use of VOIP services on its smartphones!
What is even more remarkable than the announcement as reported in the Korea Herald,  is the company's reasoning that allowing its smartphone subscribers access to cheap internet calls using services like Skype will "deal a blow to its revenue."
One probable result of SK Telecom's policy, if indeed they stick with it, will be an increasing number of its customers who drop SK Telecom's service in favor of Korea Telecom.   That's what I did late last November and I haven't had a single regret.  Skype, by the way, was one of the first applications I loaded on my iPhone 3GS and it works great!
The leadership of Korea Telecom seems to have a better grasp of the revolutionary changes underway in mobile communications and greeted the SK announcement by saying that it would continue to focus on reducing mobile internet charges rather than on calling tariffs.  KT is also moving broadly to offer useful content and applications, which will no doubt generate handsome revenues.  SK Telecom would be wise to do the same, rather than cling to dwindling voice revenues as a source of future revenue.

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