By Kim Tong-hyung
Staff Reporter
Korea will have more mobile phones than heads by the end of next year, according to research by the country's biggest telephone company.
Digieco, a research institute run by KT, the country's No. 2 mobile telephony operator, predicts that 49 million handsets will be in use by local wireless users in 2010, representing a penetration rate of about 101 percent. Statistics Korea, formerly the National Statistical Office (NSO), estimates the country's population will reach 48.8 million during the year.
The number of mobile telephony subscribers is expected to grow to about 49.5 million by the end of next year, from the projected 48.2 million for 2009, according to government figures.
``With the mobile penetration rate exceeding 100 percent, the subscriber market will be saturated, and the competition will increase among wireless carriers to provide differentiated services,'' said the Digieco report.
``The mobile voice market will continue to struggle, as a contraction of 1.8 percent is expected next year. However, this will be compensated by a 16.5 percent growth in mobile Internet, as the focus on the market continues to move from voice to data.''
Wireless carriers KT and SK Telecom, the industry kingpins that have more than 50 percent of Korean mobile telephony users as subscribers, have been struggling to keep growth alive in the maturing voice market.
However, with smartphones ― which provide Web browsing and multimedia atop of voice functions ― becoming more popular and the carriers offering a larger variety of fixed-rate monthly data plans, Digieco claims that the long-awaited mobile Internet explosion just might become a reality next year.
Although smartphones were a tough sell in previous years, the mobile market now has intriguing devices such as the iPhone 3GS and T-Omnia II that are proving to be game changers.
The iPhone, Apple's do-it-all smartphone that was released locally by KT at the end of November, needed just a week to establish itself as the country's most popular new handset, with the company managing to sell nearly 70,000 through Dec. 6.
Mobile carriers have also been lowering their data rates and offering a larger variety of monthly fixed-rate plans to encourage subscribers to use the mobile Internet more, which will be critical for them to get better returns on their massive third-generation (3G) investments.
Despite the projected decline in the voice market, the mobile telephony market will grow 1.8 percent year-on-year to reach 22.5 trillion won (some $19.4 billion) in 2010, the Digieco study said, driven by a dramatic growth in data usage.
The market for fixed-line telephony, which is increasingly looking like a decaying business model, will be worth around 13.6 trillion won next year, according to the report.
However, the number of subscribers for fixed-line phones is predicted to increase 5.7 percent to 27.74 million next year, due to an expected 70 percent increase of Internet telephony customers.
``The competition in the mobile market will be less about garnering a larger number of subscribers and more about achieving a higher average revenue per user (ARPU), as companies, though intent on maintaining the size of their subscriber pools, are focused on improving revenue from data services,'' the report said.
The market for broadcasting services, including pay-television platforms such as cable and Internet protocol television (IPTV), is expected to increase 8 percent year-on-year to 10.7 trillion won next year, driven by a rebound in the advertising market and major sporting events _ the Winter Olympics and the FIFA World Cup.
thkim@koreatimes.co.kr
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