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(Last updated: 13 Nov 2008)
Trends and opportunities
The market
The information and communications technology sector has been a major contributor to the country’s economic growth and recovery from the financial crisis of 1997-98. With the active support of the government, Koreans have become early adopters of new technology while the country has developed an internationally focused hi-tech manufacturing industry.
Korean government is targeting a number of areas for industry development, supervised by Korea Communications Commission (KCC) and Ministry of Knowledge Economy (MKE), including:
- Expansion of telecommunications infrastructure networks
- Information security, particularly Internet security (incentive packages offered to designated IT security companies)
- E-commerce, including payment solutions (incentive packages and passage of online consumer protection measures)
- Wireless technology and mobile commerce
- Optical fibre technology
- Software development
- Application specific integrated circuit (ASIC) design
- Digital content
Internet
Internet use has expanded rapidly with over 76.3 per cent (34.82 million) of Koreans accessing the Internet on a regular basis as of December, 2007. There are over 41.9 million wireless Internet subscribers as of January 2008 since the service was first launched in May 1999.
Internet penetration rates for teens and the 20s age group are around 93 and 86 per cents, respectively. This rapid growth is partly a result of an extensive roll-out of infrastructure (including high speed broadband access) and government subsidisation of access charges. Internet access is more than 60 per cent cheaper than in the USA.
The rapid adoption of the Internet has generated a boom in Internet-related services. There are over 100 registered Internet Service Providers, and companies offering web design and content, e-commerce solutions and ASP services are proliferating. The government and industry are placing considerable emphasis on developing Korea's e-commerce capability, both business to business (B2B) and business to customer (B2C) and while this sector has undergone significant rationalisation since mid-2000, opportunities continue to emerge for companies with sound business fundamentals.
Mobile telecommunications
With a population of around 48 million, Korea has more than 45 million mobile phone subscribers (compared to around 23 million land lines) with all mobile networks CDMA-based as of July, 2008. Korea had its commercial launching of WCDMA services (3G) in 2007, and current number of 3G subscribers (SK Telecom & KTF) is 11.2 million as of May 2008.
Hardware
Korea has an internationally competitive electronics manufacturing industry and is a leading producer of semiconductors and display products for world markets. It has developed leading-edge technology in the manufacture of LCD and TFT displays, and is a major manufacturer of mobile phone handsets, PDAs, computers, monitors and related equipment. These products are a significant source of export income.
Software
Korea’s software industry has historically not been as strongly developed as its hardware manufacturing. However, Korea is developing its capability in this area, including games software, and is being supported by government funding. (Source: Korea Game Industry Agency – www.kogia.or.kr/index.jsp)
Opportunities
Korea has developed a sophisticated manufacturing base for computer and telecommunications hardware and, with the rapid adoption of the Internet, it has become one of the leading information economies in Asia. This has created opportunities in a range of areas for foreign companies that have internationally recognised technology and IT services, including:
- Internet-related services
- Wireless applications
- E-commerce applications including payment solutions
- IT security
- Digital content, including e-games and animations
- Financial services applications and other industry-specific software
- Network and systems integration services
- Smart-card and intelligent traffic systems
In addition, with services of digital TV, digital multimedia broadcasting, Wibro (portable Internet) launched in 2006, the demand for digital content will rise sharply in the near future. Besides, Korea’s commercial launching of IP TV in late 2008 will be another opportunities for Australian digital content developers.
Competitive environment
Australian companies have successfully established a market presence in a number of these areas against strong competition from higher profile USA and European companies. |