By Kim Tong-hyung
Staff Reporter
Telephone users from next month can switch to a cheaper Internet-based service without changing their numbers.
The government is expected to permit voice-over-Internet protocol (VoIP) subscribers to get access to number portability.
The policy could ignite explosive growth in the Internet telephony market given growing consumer frugality amid high inflation and the sluggish economy.
The change could reshape the telecommunication industry, with KT, which controls more than 90 percent of the fixed-line phone market, expected to lose business to smaller carriers.
KT pressured the Korean Communications Commission to delay the adoption of number portability, which had been slated for this month, saying the data systems of VoIP operators provide insufficient direction information for 119 emergency calls.
The company sought to buy more time to introduce its own version of VoIP, dubbed service over IP (SoIP), to prevent loss of customers.
Regulators, however, have no reason to delay number portability further as rival VoIP providers like LG Dacom and Samsung Networks will complete network integration tests between their call tracking systems and the network of the National Emergency Management Agency this week.
The commission has been arbitrating negotiations between VoIP carriers and KT, the operator of the NEMA-leased lines, overcosts for other carriers in using KT's network. An agreement is near, government officials said.
``The commission will reexamine number portability in its executive meeting Sept. 3, and we expect VoIP providers to stabilize their system to handle emergency calls," said commission member Park Jun-sun.
If VoIP number portability gets the green light, the government will issue a notification following a review by the Regulatory Reform Committee. The process could be completed by the end of September.
LG Dacom is expected to be the largest beneficiary of number portability. The company holds just 1.1 percent of the fixed-line market but has around 900,000 VoIP customers.
Another major player could be Hanarotelecom, the country's No. 2 fixed-line carrier which is also expected to sink its teeth deep into the VoIP pie.
Hanarotelecom will also be backed by SK Telecom, the country's No. 1 wireless carrier which bought Hanarotelecom in February.
Due to their limited presence in the fixed-line market, LG Dacom and Hanarotelecom are expected to conduct aggressive marketing for their VoIP services. The same cannot be said for KT, which is worried that Internet telephony services could deplete its main customer pool.
Cheaper rates, especially on long-distance calls, are a strong selling point for VoIP. Thus KT fears that increased bargain hunting among customers could erode profits.
KT is struggling to decide how to balance its customer pool for Internet telephony and public switched telephone network (PSTN). The company is pushing SoIP, which provides video calling and data transfer atop of voice, as a differentiated service.
It's questionable, however, if video calling will be a killer application for Internet telephony when few use the function on mobile phones. Other applications such as online banking are expected to make little difference since they are easily accessible on computers.