Mobile Korea

There are rumors in Korean press that SK Telecom is hesitant to inject more money in its S-DMB business and TU Media, because reaching the break-even is unlikely. Although subscribers have reached almost 1.3 million in September 2007 TU Media has generated only losses. Together with initial investments of about 250 million USD overall this venture could have cost SK Telecom more than 500 million USD since beginning of operation.

There are several factors for missing commercial success of S-DMB, some of them are:

1. Targeting the mass market SK Telecom has underestimated the importance of acquiring popular contents from terrestrial TV. Upon the launch of S-DMB it had been too naïve and expected to get rights for retransmitting contents from the broadcasters. However with T-DMB in the pipeline they had been reluctant to share these contents.

2. Launching the satellite (it had been launched in cooperation with a Japanese company MBCo) and building the infrastructure almost by itself required significant funding, estimated to be about 250 million USD.

3. When entering the market it relied too much on existing skills and thus pursued a subscription based model, making a success on the mass market very unlikely.

4. Also Korean government is not free from blame. It issued licenses for mobile TV to two different parties with a diametrically different approach. Subscription based S-DMB and free T-DMB. Due to this both sides could not exploit the full market potential of mobile TV in Korea.

5. Being direct competitors in the mobile market KTF and LG have been reluctant to promote S-DMB, because it is a service of a direct competitor.

Although TU Media has not been a commercial success it can provide very valuable lessons to interested players in the mobile TV market, especially in the Western world where mobile TV is about to be launched.

1. Content is king – it has to be tailored to your targeted audience else your business is doomed. If targeting the mass market popular formats from TV is crucial.

2. Initial investments have to be balanced carefully and should not burden the future development too much.

3. Especially as an MNOs may not underestimate the importance of the right content.

These are just some of my thoughts. I am currently working on a report about the lessons learnt from two years of mobile TV market in Korea in which these things will be elaborated in more detail. Once it is finished I am willing to share it with everybody who is interested. So please do not hesitate to contact me.

are one of the reasons for the success of SK Telecom. (In the last years SK Telecom has been able to achieve and maintain a market share of around 50%.) An example for the segment specific approach is the existence of three different payment plans for specific age segments: TTL (18-24), TING (13-17) and TINGjunior (under 12).

Each of the payment plans does not only have a tailored communication, exemplified by three different websites as shown above, but also tailored services and pricing. E.g. Ting is offering reduced rates weekdays (between 21:00-24:00 – the time when teenagers come back from school) and during certain periods (summer and winter vacation). Moreover offers and deals on the website are customized to the target groups needs, featuring free educational content (TINGjunior), events and cinema (TING) and the possibility to set a spending limit (both). Additionally SK Telecom is offering child care services, e.g. location notification once your child leaves a designated zone, tracking and emergency SMS so do not need to worry. Targeting specific segments allows MNOs to provide relevant services, which add value in the eyes of the customers which again leads to higher ARPU. In the Western world this segment specific approach has been chosen by many MVNOs, but in order to increase ARPU and educate users to utilize their data related services it is crucial for MNOs to go the same way.

Cyworld, which is a Korean social network site, has been introduced on an American university text book published in this February as a world wide famous social online community service.

The name of the book is “Information Systems Today : Managing in the Digital World” published by the Prentice Hall. This book is used to deliver information of general digital economy systems and its new trends to US students majoring in Economics and Business Management.

On this book, Cyworld is evaluated as an online community service that has created a new economy system via social network same as MySpace in US.