Case study of a high-tech world leader: Republic of Korea
Dr Tim Kelly, Head, Strategy and Policy Unit
The views expressed in this presentation are those of the authors and do not necessarily reflect the opinions of ITU or its Membership. The author can contacted by e-mail at tim.kelly@itu.int.
International Telecommunication Union
Korea: #1 worldwide in broadband
Korea (Rep.) HK, China Canada Taiwan, China Iceland Denmark Belgium Sweden Austria Netherlands
Source: ITU World Telecom Indicators Database.
21.3 14.6 11.5 9.4 8.7 8.6 8.4 7.7 6.6 6.5 6.5 6.3 6.1
5.5
Broadband subscribers per 100 inhabitants, by technology, 2002
DSL Cable Other
United States Switzerland Japan Singapore Finland
2
5.3
International Telecommunication Union
Just how far ahead is Korea?
Broadband subscribers, end 2002, million
12
10.1m
10 8 6 4
Source: ITU World Telecom Indicators Database.
10.7m
Denmark, Italy, Finland, Portugal, Spain, Ireland, Lux & Greece Austria Sweden Belgium Netherlands UK France
2 0
Germany
3
Rep. of Korea, Population 47 m
European Union, Population 380 m
International Telecommunication Union
Secrets of Korea’s success (1)
Government policy push
Maximise ability of all citizens to use ICTs Vision of a creative knowledgebased society Ten priority areas Annual action plans National information superhighway Administration, defence, public security, finance & education
4
E-Korea Vision 2006 (2002-2006)
CYBER KOREA 21 (1999-2002)
National Framework Plan for Informatization Promotion (1996-2000) Korea Information Infrastructure Initiative (1995-2005)
National Basic Information System (1987 – 1996)
Focus on manufacturing
Measures to nurture IT Industry (1987 – 1985)
Outcome of public policy drive:
A highly ICT-literate society ! Home PC-ownership: >78%, of which >86% are Internet users ! >90% of Internet users have broadband access
PC Penetration at home (78.5%) Year Dial-up Internet Access at home (68.1%) ISDN xDSL Cable modem 8.8% Other No Internet Access No PC at home
June 2002
3.0%
0.5%
55.5%
0.3%
10.4%
21.5%
Dec 2001
5.5%
0.8%
45.1%
11.3%
0.5%
13.6%
23.1%
Source: Adapted from KRNIC.
International Telecommunication Union
Secrets of Korea’s success (2)
Infrastructure competition
Internet users (in thousands)
24,380 26,270
More than 18’000 ICT companies are active in the Korean market
10,860 3,103 731 1996 1,643
19,040
ADSL market entry of Hanaro Telecom 1998 1999 2000 2001 2002
1997
6
Source: Adapted from KRNIC.
Outcome of infrastructure competition:
Diversity and choice
Broadband service penetration (in ‘000s of subscribers)
Technology xDSL Cable modem Metro Ethernet & B-WLL Satellite Max. Down Speed Up to 8Mbit/s Up to 10Mbit/s Up to 10Mbit/s Up to 1Mbit/s 1998 1 13 14 0.1% 1999 170 190 10 370 2.6% 2000 2’070 1’390 540 20 4’020 29% 2001 4’387 2’530 875 12 7’805 56% Nov. 2002 5’664 3’554 1’181 6 10’405 63%
Total Subscribers (‘000s) % of total household
Source: Adapted from Korean Ministry of Information and Communications.
International Telecommunication Union
Secrets of Korea’s success (3)
Attractive pricing options
SwissCom (Bluewin) Iceland (Islandssimmi) Canada (Bell Sympatico) US (Comcast) Singapore HK, China (PCCW) Korea (Hanaro/KT) Japan (Yahoo BB)
8
Source: ITU research.
139.00 72.60 30.60 28.60 21.90 12.70 2.90 1.80
Price per 1 Mbit/s, April 2003
International Telecommunication Union
Outcome of lower prices:
Higher spending on ICT services
6% 5% 4%
Hong Kong SAR Korea (Rep.)
3%
Global average
2% 1% 0%
9
Source: ITU World Telecommunication Indicators Database.
Telecom spending as a % of national GDP
1991 2001
International Telecommunication Union
More secrets of Korea’s success
! Emphasis on education
" Broadband seen as family investment in education
! Highly-urbanized population
" 80% living in urbanized areas " 48% of housing stock is apartment blocks
! Favourable regulatory environment
" Local loop unbundling " Government support for facilities-based competition
! Local manufacturing and local content
" Emphasis on R&D " High performance IP backbone " Korean content (e.g., DAUM website) and games
! Government support
10
" Spectrum fees and other remain within sector