Mobile Korea

Following the Broadband Convergence Network program (initiated by the Ministry of Information and Communication), Yujin Robot, Spread Telecom and KTF have worked together to create a new domestic robot. Based on a vacuum cleaner model, like the iClebo, this prototype is able to communicate with your mobile phone, in order to let you control it, and send you a text message when somebody comes into your house. This is another step in the government initiative to make robots a common tool, in the everyday life, available to a large array of people. The country heralds a goal of a 100% robot market penetration by 2020.

Tellingly, using the near universal broadband access, Korean companies are making robots closer to people, through this so-called control of robots : we can follow the robot journey in the house, and the robot can help us staying closer to our home. Therefore, the technological convergence is also a distance convergence. New technologies help you to reduce the distance between you and your house or relatives. In Korea, new technologies are progressively integrated in the Korean everyday life, by addressing emotional and personal matters, as our home security. This is true for the robots, but this is also true for the mobile phone , as I said yesterday.

Today I have found a very interesting blog entry “The future of mobile carriers is here. It is called SK Telecom”, which is worth reading. In short it lists a portfolio of companies acquired by SK Telecom on its endeavor to diversify its business portfolio beyond being a wireless carrier, which is likely to become “dumb bit pipes” in the future.
At this SK Telecom is acting similar to Google’s strategy of continuous expansion into new business areas. This has been termed as the “Google Galaxy” by ZDNet and SK Telecom is building its own “Solar System” with various areas (I prefer this term because SK Telecoms endeavors so far are on a smaller scale). In this context it is not surprising that these companies also share common goals, which manifested in a strategic alliance announced a year ago. Both companies cooperate in the development of a mobile search solution.

Looking at all this I have some rough thoughts which I would like to share with you:

1. “Content” is becoming increasingly crucial.
For MNOs it is critical to acquire attractive contents for their services, the mobile TV market is another good example for this development.

2. Convergence is reality.
Convergence of media is not only a buzz word but already happening. It opens new business opportunities but at the same time endangers players which will not adapt to the new market environment.

3. It is a buyer’s not a seller’s market.
Instead of introducing services and expecting customers to adopt them, MNOs have to start developing services tailored to customers’ demands and needs.

4. Mobile is the center of digital life.
The mobile will become increasingly important, it will not only be a device to call other people but one of the most important entertainment and communication devices. For some time now SK Telecom is focusing its communication and advertising underlining the emotional and “human” aspects of the mobile and how it has become an integral part of Koreans’ everyday life.

To be successful in this fast moving environment it is crucial to stay up to date with the latest developments and in my point of view Korea is one of the places worth having a look at.

It looks like the competition between the two giants LG and Samsung will have the next round among new 3g phones. It is said that in response to the newly released LG KU990, Samsung is about to release its new model W380 with similar technological features. 5 mega pixels camera, optical zoom and other beneficial features will make it a hard nut for LG to crack.

However, once again it becomes obvious how mature the HSDPA market in Korea is, in comparison to Western markets. The new Samsung phone has up to 7.2 Mbps of HSDPA speed (compared with LG's 3.2 Mbps for its use in Europe). What one should keep in mind is that the technology, on both the handset and network side, keeps evolving and with it the services. The greater bandwidth and mature market in Korea create an interesting experimental ground for new services which require more bandwidth. User generated contents (like videos), broadband mobile gaming and other demanding services are all world leading in Korea today.

As you might know approximately one month ago we had presidential primaries of one party in which voting via SMS was allowed. Moreover the upcoming presidential election (held mid December) will be the first one with a reduced voting age (19 instead of 20 years of age). These two factors have increased the importance of young voters for policy makers, although the “thumb generation” is claimed to be relatively apolitical.

A way how this could be changed is a newly published mobile game called “President Tycoon” in which you have to lead your virtual character to victory. It can be downloaded on a Korean mobile for approximately 1 USD. Considering a mobile penetration of above 90% in the segment of 18-24 year olds in my point of view this could be a good way to sensitize this segment for political issues. In my point of view one logical extension of this model would be to utilize it for a certain candidate or party, provide it as a free download and utilize real contents from the political program – this would be real edutainment for the “thumb generation”. And also for the upcoming “thumb generations” in other countries.

In connection with yesterday’s posting I have found another interesting article in the New York Times. “In Korea, a boot camp cure for web obsession”, shows another example for my statement yesterday that Korea is leading in facing the challenges of digital society.
This article describes boot camp like institutions for young people who are addicted to the internet. I do not want to give a summary of the article but instead give you some interesting excerpts.

“South Korea boasts of being the most wired nation on earth. In fact, perhaps no other country has so fully embraced the Internet.”
“Compulsive Internet use has been identified as a mental health issue in other countries, including the United States. However, it may be a particularly acute problem in South Korea because of the country’s nearly universal Internet access.”
““Korea has been most aggressive in embracing the Internet,” said Koh Young-sam, head of the government-run Internet Addiction Counseling Center. “Now we have to lead in dealing with its consequences.”
“Korea is on the leading edge,” Dr. Block said. “They are ahead in defining and researching the problem, and recognize as a society that they have a major issue.”

I can only repeat myself: Korea is not only the place to look for business opportunities in the TMT sector but also if you are interested which challenges arise for the digital society and how they can be tackled.

Recently I have read the case of little Megan who has committed suicide over a fake virtual boy friend created by some peers. Apart from the human tragedy behind the story what struck are two facts. Firstly the careless abuse of MySpace by peers, who considered the whole thing being a joke. Secondly the fact that often laws do not seem to be ready for the challenges of digital society. In Megan’s case e.g. no law has been violated because no such law exists.
Since Korean society is more “wired” than any other in the world, we encounter similar problems or have encountered them even earlier. At this Korean government and society try to be proactive as possible in facing the challenges of digital society. One example, which is also applicable to the case above, is the anonymity of the internet in social networking sites and forums, which has been a serious problem in Koreain the past. Government addressed this issue by introducing an obligation to verify your internet egos with your real ID. This is to prevent abuse because people are aware of the fact that they are not anonymous anymore (in the light of privacy security this may not be the best solution though). However punishing is one thing but creating a feeling of unethical behavior is a completely different one and in Megan’s case both had been missing. Concerning the latter a good example is a media campaign which had been launched in order to sensitize people that cyber bullying is unethical behavior and can have serious consequences. Below you may find an ad out of this campaign, the spoken text is something like: “Destroying one’s soul is terror which is crueler than terror”.







So overall Korea is not only a place for business opportunities but it is also worth having a look at if you are searching for examples how policy can tackle the challenges of digital society.

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.

Android the open source operating system for mobile devices is cheered throughout Western media. It is considered as a milestone which will lower production cost for handsets (and thus for consumers), enlarge potential markets for developers (because they will not need to focus on one manufacturer) and at the same time educate consumers to finally embrace mobile data services. In my point of view the impact on the Korean market will be smaller. My expectation is that especially handset manufacturers will profit from lower hardware requirements, shorter production cycles and thus lower cost. This is why both major handset manufacturers like Samsung and LG have joined the alliance. However Android is not very likely to affect consumers as much as it will on Western markets.

In contrast to Europe Korean MNOs do not fight for market share but try to increase ARPU this results in the fact that data related services are much more sophisticated than in the rest of the World. Already nowadays with approx. 26% of SK Telecoms revenues coming from data related services, customers are “educated” to use them. Moreover SK Telecom has recently partially opened its interface for third party developers and more importantly services which will be developed for Android are likely to be inspired by Korean existing value added services. Due to the sophistication of the Korean mobile market Western developers can use it as a visionary ground in which they can observe what the latest developments in value added services are and which services really add value. So developers who want to join the “gold rush” which Google has announced recently (with a total of 10 million USD for promising Android applications) should have a close look on the Korean mobile market.

SK Telecom has announced that user number of “Mobile Cyworld” users has exceeded 1 million, being far ahead of other mobile services like Mobile Daum Café (0.14 million) or Mobile Naver Blog (0.1 million). At the same time the average monthly page view of mobile CyWorld is 350 million which results in the fact that on average a user visits mobile CyWorld eleven times a day or basically once an hour.

65% of the users are female and 50% of the users are between 19-25 years old. Besides writing messages to their friends’ “Minihompy”, sending pictures which have been taken by mobile to their own “Minihompy”. Over a million photos are sent like that monthly resulting in nice data related revenue for SK Telecom. These are usage patterns other MNOs and service providers dream of. Due to age segment specific marketing activities SK Telecom is able to design customized service offerings which add significant value to the customer experience. At the same time it is combined with adequate pricing, e.g. it has a flatrate for usage of mobile CyWorld being very attractive to the younger target group.

Recently the National Internet Development Agency of Korea conducted a survey about mobile internet usage among 3000 Koreans aged 12-59. In the last year approx. 27% of all participants used mobile internet at least once a month and 22% used their mobile to access it. Moreover Koreans use mobile internet quite long, with almost 40% of the users staying online for more than 5 minutes. So far only around 3% use mobile broadband like WCDMA or WiBro but 25% intend to use mobile broadband in the future. However so far especially Wibro has not been performing all too well yet.

The top three reasons to use mobile internet are the ability to access it wherever (78%) or whenever (62%) and in order to just “kill the time” (56%). Most participants use it for entertainment purposes (92%), especially downloading ringtones, listenting to streamed music of for games, followed by commercial services (65%), such as MMS, e-mail and accessing CyWorld. Lastly 41% of the participants who are not using mobile internet at the moment are planning to use it in the future resulting in an expected usage of 66%. This perspective truly looks very promising for MNOs and service providers. However one key challenge will be to offer innovative services in order to attract and maintain users. So for MNOs in the Western world which try to educate users to use data related services more intensively Korea is a good window into the future to learn which services are embraced and which are not.

Just like many Asian markets Korea also has its local champions which are preferred by users over Western giants. As you might know naver.com is by far the most popular search engine in Korea, another example is the NateOn messenger which according to Koreanclick.com has approximately twice as many users as MSN (13 million vs. 6 million as of February 2007). However one peculiar fact about local Korean champions is that they are not just localized copies of Western archetypes but often times leading in terms of functionality and value added services.

While both interfaces look quite similar with link tabs to selected services which are likely to be sold to interested companies. NateOn goes one step further in usage options and possibilities to generate new revenues. One additional option is that you can transfer money to existing contacts without even knowing their account number, which makes NateOn an alternative to conduct on-line payments.

Another interesting feature is the so called “Gifticon”. This artificial word made of “gift” and “icon” is an innovative service provided by SK Telecom and is something like a voucher you can send to your friends’ mobile which they can then exchange for goods, like e.g. a cup of coffee at Starbucks. A detailed explanation of “Gifticons” can be found on another blog about Korea called www.mobileinkorea.com. Launched in December 2006 the “Gifticon” service has undergone a tremendous development. It started with turnover of approx. 50.000 USD and reached approximately 700.000 USD in August 2007, this equals a monthly growth rate of 39%. Since “Gifticons” are vouchers for designated partners these figures translate directly in higher sales.

Lastly I would like to mention the interconnection to SK owned CyWorld, Koreas leading social networking site, and NateOn. You can easily link your mini homepage to your contact details enabling your friends to visit you and get update alerts once you update your page. This turns NateOn to a tool to keep up to date with your important contacts without even visiting the respective social networking site.

Many people from all over the world claim that Korea is the most strong player in Mobile TV. True. But by what means?

If we look at the numbers of who use mobile TV in Korea, the answer is 'YES'. (Now more than 7 million people watch mobile TV in Korea). From the point of profitable business, Korea still has long way to go. Despite the fact that mobile TV exists for more than two years in Korea, specific conditions of the Korean market hinder its development to full potential.

One simple explanation for this can be the putting 'Avoidable Efforts'. For example in Korea MNOs such as SK Telecom are competing against broadcasting companies such as KBS, MBC, SBS and more. This results not only in two competing standards and revenue models the subscription based S-DMB vs. the advertisement based T-DMB but also in the fact that some contents are only available for one of the respective standards. (Unfortunately Korean Regulatory bodies are divided to two entity, Telecom Committee and Broadcasting Committee. Due to this current condition, each side are making strong tension on the ownership of 'Killer Contents. We will try to elaborate this during our forthcoming report on 'Mobile TV'.)

Secondly SK Telecom nowadays is not sure which standard it should support in the future, either S-DMB or HSDPA or another new technology standard such as Mobile Wimax (which is known in Korea as WiBro). Despite a solid user base and revenues S-DMB is quite far away from reaching break even. So MNOs should wisely decide how they can optimize their products Portfolio using different technology standard in order to make the best use of Mobile TV. Actually Mobile TV has very broad definition, and from the customer perspective they do not care what standard they use say DMB, WiBro, HSDPA, Streaming Technology. It is all about providing the most desirable customer experience to the customers.

Another reason why mobile TV is not more successful than now in Korea is Koreans’ affinity to technology and gadgets. On the one hand one could argue that mobile TV is popular in Korea because of this affinity but on the other hand there are various substitutes which can satisfy similar needs. For example we have so called portable media players (PMP), which are comparable to a very small portable PC. People use these PMPs to watch TV programs they have recorded the day before on their HDD drive. So while some factors such as PMP players may not be applicable to Western markets, MNOs and broadcasters should try to avoid cannibalization and ruinous competition in order to fully exploit opportunities in mobile TV business.

A lot of people in Europe and the U.S. are wondering which contents will become the “killer content” for mobile TV, which will make people embrace this new service. As you might know mobile TV has been introduced in Korea in 2005 and as of today has approximately 7 million users (2 million S-DMB / 5 million T-DMB). Reviewing a lifestyle magazine provided by TU-Media I discovered a ranking showing the most favorite content of S-DMB users, as shown below:

Analyzing this snapshot of Korean viewing behavior shows which content matters:

1. Time critical content is one of the keys to attract users to mobile TV. People are even willing to pay money in order to watch games of their favorite team or player.

2. Another key to attract people is the utilization of popular contents from terrestrial TV.

3. Lastly mobile watching behavior is more dynamic in comparison to terrestrial TV with two thirds of all entries being new on the ranking.

The detailed ranking can be seen here.

Lately gaming has received significant attention as an emerging multi billion dollar business. PricewaterhouseCoopers expects the video game industry in Asia/Pacific which is the largest market to grow by 10% annually from 11.7 billion USD in 2006 to 18.8 billion USD by 2011 excluding spending on hardware and possible revenues from in-game advertising. So although being a fun sector it offers promising business opportunities. From the 8^th until 11^th of November the third edition of GStar games exhibition took place in Ilsan a satellite city of Seoul. Since I live in Ilsan and the fair ground is just a five minutes walk away I from my place, I seized the opportunity and had a look at it last Friday.

Unfortunately still exhibitors as well as audience had a strong Korean bias, with no major Western game company being present on GStar. Because of cultural factors and differences in the way people play there is no global gaming community yet (besides a few examples like World of Warcraft). But according to key not speaker Gordon Walton from Bioware, especially the Western younger generation is attracted by Asian style games and content. Moreover he stated that factors like the high number of developers, massive competition among those and strong demand will make Asia the leading region for game development in the future.

Besides that I had a close look on mobile games. Although lagging behind 8-9 years in terms of graphics, Koreans do use their mobile for gaming. Especially when using public transportation it is a good way to spend the time. One feature which could make mobile gaming attractive for business is that also girls are using their mobile for playing. With 3G phones it will open new business opportunities in the fields of advertisement related and multiplayer mobile gaming. And Korean users are once again likely to be the leading early adopters in the world.

These days I recieve several e-mails asking me what my company is doing in detail. I try to answer these questions as far as I can but due my limited time and chracteristics of e-mail, It was not always full enough.

So I had revised our company's introduction material and made a simplified version. Thanks to numerous helpful web 2.o tools, this time www.slideshare.net/veyond , I can easily share this information.

Do visit our slideshare space and I will try to put more things in regulary in there.

Yesterday I have been writing about “Digital Korea“ and today I thought I might recommend you another book which I have read recently, “Diamond Dilemma” by Tariq Hussain. Whereas “Digital Korea” is focusing on the TMT sector “Diamond Dilemma” takes a more global perspective and discusses the challenges and opportunities for Korean society, economy and politics to make Korea ready for the 21st century and in order to keep up the tremendous development, which Korea has undergone in the last 30 years.

Tariq Husain has been working for a major consulting company serving clients in Korea since 1997 this enables him to give the reader a fresh outside in but also insightful perspective on Korea. (I am also glad that he and I have attended the same school)

I do not want to give a summary of this book because it can be found here, but I can recommend it to everybody who would like to get a better understanding of the Korean economy in general. For me as a Korean native, it has been a pleasant free time reading which gave me a fresh view on certain aspects of Korean economy.


Finding and shaping the Korean TMT diamond

One of the things which struck me is, that Hussain, as a non Korean, points out the opportunities in Korea in great detail and a strong rationale behind it. Also from the perspective of non Korean there are a lot of opportunities in Korea.

In my point of view the TMT(Telecom, Media, Technology) sector is a very good example for that, however these opportunities, just like diamonds, have to be found and grinded in order to exploit their full potential. The more you know about Korea the more opportunities you will discover.

This is in line with my experiences here at VEYOND PARTNERS. Currently we have a Polish intern who has been living in Germany. He has stayed in Seoul a year ago as an exchange student in Seoul and has been fascinated by the Korean TMT sector. His endeavors to get to know the Korean market in more detail have led him to us and he is currently working in our office. During our discussions he has underlined several times that he sees more and more opportunities in the Korean TMT as he gets to know it better.

In this context I consider VEYOND PARTNERS as the intermediating agent which facilitates interested persons and businesses to investigate and explore the Korean market and its opportunities. However in order to find the diamonds in the Korean TMT sector, i.e. exploit the existing business opportunities, you have to get heavily involved and keep in touch with it very closely.

Korean students need to be prepared for working in the global business

Another fact which is less charming for Korea and a field in which politics should intervene is that Korean high potentials are not competitive in the global environment. This is not because of missing professional knowledge but rather because the education system does not equip them with the necessary skills as well as global attitude and perspective to perform in a global setting. This shows e.g. in underdeveloped oral language abilities as English education is focused on writing instead of speaking, but also in the fact that Koreans are bad at selling themselves and their abilities.

So in my point of view already high school but especially university education should equip students with skills necessary to perform in a global business setting. This goes beyond oral English skills but should also aim at enhancing their team working skills, assertiveness and self confidence.

We at VEYOND PARTNERS follow this philosophy by offering internship for international as well as in Korean students in which they learn to work and interact with each other, giving both valuable experiences for their future career.

Eye on South Korea by CNN

One thing which struck us recently is the global attention the Korean TMT sector is beginning to get. Recently CNN has conducted a series called “Eye on South Korea” with interesting articles and video clips about topics like CyWorld, next generation mobile handsets and “a day in the (digital) life of a South Korean boy”. For more information about the series please visit:
http://edition.cnn.com/2007/WORLD/asiapcf/10/12/eosk.video/index.html

Book: “Digital Korea”

During this year’s iMobicon I had a very interesting talk with Tomi Ahonen, just as his new book written together with Jim O’Reilly had been about to be published. It is called “Digital Korea” and provides the reader an overview about the level of sophistication of certain areas in the Korean TMT sector, such as on-line gaming, telematics, internet usage etc. It also features interesting case studies on enterprises which have succeeded in establishing a business in particular areas. The case studies feature e.g. CyWorld (social networking site), TU-Media (Korean S-DMB provider) and others.
This book has now been reviewed on CNN.com, it also includes an excerpt of interesting statistics out of the book (Click here), as well as an interview with Tomi Ahonen one of the authors (Click here). Due to the fast pace of the TMT sector these statistics are outdated already, however it is very good as a source for the beginning. It also proves that the Western world should keep a close look on the developments in Korea. Since what is reality here is likely to become reality in Europe and the U.S. in the near future. We at VEYOND PARTNERS feel responsible to give interested business people valuable and up to date insights in all relevant aspects of the Korean TMT sector and business in order to build a bridge between Korea and the Western world.

As I have mentioned not long ago, I am forced to constantly move from one place to another due to the nature of my current position. If you are in the same situation as I am or simply want to save internet service costs, I introduce to you “Windy 31”, a portable USB like wireless internet router.

A Korean based networks and systems company, Mavericks Systems says that this tiny USB like device acts as a wireless LAN card, wireless AP, and wireless router, all in one. It includes IEEE 802.11 b/g which allows speeds up to 54Mbps.

As you can see, three of the most needed functions for wireless internet users are all included within this tiny device. It also works under Windows XP as well as Windows Vista without installing extra CD programs.

It means you could use this device as a wireless LAN card by simply plugging this device into the computer’s USB port. Also if you plug this device into a PC that is connected to the internet, by acting as an AP, it allows nearby computers to access the internet.

Using its router function, it is recommended that 32 computers (up to 253 computers) to simultaneously access the wireless internet using this device. Worried about setting each IPs? No worries, for each IPs are set automatically due to its Dynamic Host Configuration Protocol that is embedded.

Limited to PCs only? It also allows WiFi handsets, PDA, Nintendo DS, PSP, and many others to access the wireless internet.

Worried about security? It complies with 64/128 bit Wired Equivalent Privacy and Wi-Fi Protected Access security standards and Media Access Control address filtering and firewall security function that it ensures users to feel safe when using it.

Think about how much money you can save with this little device. Think about how much time and effort you can save using this little device. I believe the kind of device such as this will make everyone’s lives easier.

What do you think the upgraded version of this product would turn out to be?