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ブロードバンドインターネット装備 |
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Korea's Broadband Industry is the World's Benchmark |
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TThe market size of high-speed Internet equipment in Korea averages one
trillion won annually. However, in spite of its modest size, Korea has garnered
worldwide recognition as the world's testing ground for the world's major
telecom and networking equipment vendors. It is commonly said, "If
you a re succes sful in the Korean market, success is almost guaranteed
elsewhere in the world. " Here's why Korea represents an outstanding
investment destination for broadband equipment manufacturers. |
| Korea : No.1 broadband
market in the world |
|
In spite of the current slowdown in the telecom sector, Korea has become
the world's most exciting broadband market. As of May 2006, 12,600,000 homes
were subscribers to broadband Internet access - only seven years after start-up
company Thrunet established a national ISP cable modem based broadband access
service in July 1998. The broadband access market is currently maturing,
as 71.55 percent of Korean homes are already subscribers to broadband services. |
| OECD said in its report of June 2001 that Korea was going to be a global
benchmark against which all other nations would measure its level of broadband
access penetration. At that time, Korea already posted a 13.9 per cent of
broadband penetration rate, compared with 6.22 percent for Canada. The OECD
report turned out to be right as Korea's rate of high-speed Internet deployment
is the world's highest. The performance continues since then |
| Korea is a trendsetter
in the world broadband market |
|
Korea has pioneered to deploy an assortment of ADSL, cable modem, B-WLL,
satellite-based Internet and apartment-LAN broadband access technologies.
Most of these broadband Internet access options were coming out at close
timing intervals to be tested, deployed and served, making it an intense
competition among providers. The competition has led some of them to drop
out and others to stay in the market. Three of them survived the competition
and proved themselves as feasible and profitable business: ADSL, cable modem
and apartment-LAN. This is the way Korea serves as a test market for the
world to watch out to see which option of the broadband technologies could
be successful. Cable modem Docsis 2.0, VDSL, Ethernet-LAN are among the
new technologies undergoing the process of being verified in Korean market. |
| Future
Direction of Korean Broadband Internet Market |
|
ILately, the nature of new technology deployment in the Korean Broadband
Internet market has become even faster, diversified and intensified. |
| A wired to wireless
migration |
|
The carrier migration from a wired network towards a wireless capabilities
is a compelling trend that prevails in the Korea's broadband access market.
In February, 2002, KT first broke into the business as it launched full-scale
'public WLAN (wireless-LAN)' service, and has since opened hotspots in 13,000
locations nationwide. Also, KT pilot serviced WIBRO, Wireless Broadband
- a sister technology of WIMAX, with 4Mbps transmission speed during 7 days
in November 2005 at Busan APEC. These are indicative of the wired to wireless
migration trend. |
| NGN (Next Generation
Network) Deploy under Implementation |
|
Migration strategies of carrier infrastructure from PSTN towards an all-IP
networks is another trend that gains ground. The migration strategy of the
worldwide carriers is in the pipeline on a massive scale to combine separate
networks of PSTN, Internet & wireless and broadcasting into a unification
of IP-based NGN (Next Generation Network). Likewise, the Korea's largest
facility-based service provider KT Corp. is aimed at migrating by 2007 all
networks into a NGN-based broadband converged network. As part of this strategy,
KT started purchasing and deployment of Access Gateway at the end of 2001 |
| Why Korea Hurries
to Introduce New Technology- |
A pursuit of profitability is, of course, a matter of any business priority
that makes western telecom operators think hard before introducing a new
technology. However, Korean telecom service providers have little time to
think hard about introducing new technology. The reason: Korean operators
are strongly competition-driven to strive for something newer, faster, differential,
even if this may come at the expense of profit and quick gains. This may
be a compelling choice, as the market is maturing and is offering almost
homogeneous quality of services among peer carriers running together neck-to-neck.
Densely populated residential pattern in Korea is another driver that has
fueled an rapid penetration of broadband access services. More than half
of homes in Korea are in apartment complexes. This is the basic condition
to easily deploy network faster and affordable. |
| Competitiveness of Korean Companies in Broadband Access Equipment |
| Background of Korea
telecom & network Industry's growth |
Only a decade ago, Korean companies existed in all but in name, as there
were a handful of small Korean companies who depended on KT as the only
customer carrier to sell voice phones and TDX (time-division exchange).
These companies could barely exist under the government-sponsored R&D
project aimed at nurturing Korean industrial base through localization of
voices exchanges.
But the Korean conglomerates foray into the mobile telecom equipment market
has changed the face of the industry for the past few years. In recent years,
these Korean companies are leading players in the domestic verticals of
mobile phones and telecom equipment market - a market that once was controlled
by world giants like Alcatel, Lucent, Motorola during the 1998-1999 initial
phase of the network equipment deployment. Also, Korean companies have grown
internationally competitive enough to garner a trackrecord as major exporters
in the world markets of mobile phone and networking equipment. Korean conglomerates
like Samsung Electronics and LG Electronics have replaced international
giants to become the major vendors for mobile phones and telecom equipment
orders from Korean mobile telecom service providers. Korean venture companies
have gained a market share in some niches of smaller network equipment (IP
routers, switches) market since the 1998 economic crisis. These home-grown
competitiveness helped them turn to overseas market as their next destination
for networking equipments and mobile phones |
Korean equipment vendors stand to benefit from changes that have occurred
in the patterns of equipment purchasing among Korean service providers.
Korean providers were ready with robust capex budgets to be an early adopter
for new technology and services ㅡ something that none of its peers have
used and thus none of them verified. So these providers are no longer able
to base their purchasing decisions on the worldwide trackrecord often ascribed
to multinational equipment companies.
The changes of carriers' vendor selection were evidenced by KT's choice
of LG Electronics as a primary partner of Softswitches to jointly develop
so that LGE will later deliver Softswitches into the access edges at KT's
NGN. KT went further to say it reserved a certain portion of its Access
Gateway to be purchased from Korean companies in the future. So far, KT
has sourced all of Access Gateways from foreign vendors.
Such a shift of vendor preference among Korean service providers is aimed
to reduce risk involving purchasing of a new and yet-to-be-verified technology/products,
because these service providers would prefer vendors who are flexible to
share some of technology know-how, and also are agile in coming back with
prompt aftersales feedback whenever required.
Meanwhile, it has usually turned out to be a win-win approach to forge a
vendor-provider partnership, under which the Korean team could run ahead
in a time-to-market race and share profits from successful performance of
their new product/service that both sides had jointly developed or marketed.
KT Corp has joined with Korean equipment manufacturers to successfully enter
North America, Asia and Australia with its broadband Internet service. In
2005, KT recorded a 11.9 trillion won of turnover and targets 27 trillion
won of turnover by 2010 |
| Promising Areas of Growth Products |
|
VDSL equipment market is expected to grow to a one-trillion-won market in
size for the next 3 years. Korean vendors are major players in the VDSL
equipment market. It is believed that, if VDSL is successful in Korea, the
success might be repeated in other countries. If that happens, Korean VDSL
equipment vendors are among the very few vendors who are ready to tap into
the new VDSL market overseas. |
|
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
Annual Avg(%) |
Quantity
(thousand) |
1,100 |
1,000 |
1,000 |
1,000 |
1,000 |
1,000 |
1,000 |
Amount
($1mil) |
60 |
55 |
55 |
50 |
50 |
45 |
40 |
| W-LAN/Portable Internet
equipment |
| Korea is a "hotspot" for wireless LAN service. So has it become
for its equipment market. Korea's largest fixed-line carrier KT Corp. was
the world's first carrier in end-2002 who launched the "public wireless
LAN" business, and has since commercialized it with its hotspots located
in more than 13,000 public locations nationwide. KT started to launch commercialized
WIBRO service in June 2006. This would loom for equipment manufacturers,
as the Portable Internet service would cost each operator at least one trillion
won of capex execution. |
Company |
Major Products |
LG Electronics |
NGN: Softswitch, access gateway, application server, media server |
Samsung Electronics |
Broadband access: DSLAM, VDSL
NGN: Soft switch, access gateway |
Dasan Internet |
Network equipment: Router, switch
Broadband access: DSLAM, VDSL |
Corecess |
Network equiment: Switch, ATM
Broadband access: DSLAM, VDSL |
Millinet Network
System & Business |
Broadband access: DSLAM, VDSL |
Telson I&C
Electronic Co. Itd |
Broadband access: DSLAM, VDSL |
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