KOREA: High-speed internet keeps drawing users

Korea surpassed the 90 percent high-speed Internet saturation mark in April and continues to grow because of LG Powercomm and the increase in small-sized broadband companies

The Korea Times
Thursday, July 19, 2007

by Kim Tae-gyu

Many believed Korea's high-speed Internet market hit a saturation mark in early 2005 when 12 million homes were connected to the broadband for a penetration rate of 75 percent.

To defy such a belief, however, the rate has continued to rise over the past two years and finally surpassed the 90-percent milestone in April with 14.3 million subscribers.

And the figure further increased to 14.4 million at the end of last month, according to the Ministry of Information and Communication Thursday.

"We thought the broadband penetration rate had already reached the limit a couple of years ago but it was not the case," said an official at the Information Ministry.

"The number gained about 70,000 a month this year on average, or upside of 400,000 in the first half alone. The overall figure is on pace to approach 15 million late this year," he said.

In particular, almost every household in and around Seoul is linked up to the always-on Internet service with their combined penetration rate over 100 percent.

Seoul and surrounding Gyeonggi Province posted 107.7 percent and 101.2 percent, respectively. Incheon, also encircled by Gyeonggi Province, came in third with 99.7 percent.

The average rate at the capital territories including Gyeonggi and Incheon was 103.9 percent.

Experts said the advent of No. 3 broadband operator LG Powercomm and small-sized companies explain the seamless increase of the high-speed Internet user pool.

"In addition to homes, numerous small companies also subscribe to the Internet service while large firms lease dedicated networks," Woori Securities analyst Stan Jung said.

"The debut of newcomer -- LG Powercomm -- also boosted the rivalry between Internet service providers to expand the business. The number of subscribers will eventually top 20 million," he projected.

LG Powercomm began attracting broadband customers in 2005 and racked up its subscriber pool to almost 1.5 million in less than two years.

Its premiere triggered marketing blitz among established players -- the business bellwether KT and the runners-up Hanaro Telecom -- and this exert a pull on marginal users.

Currently, KT accounts for 45.2 percent of the market with 6.5 million users, followed by Hanaro Telecom with 25.5 percent and LG Powercomm with 10.3 percent.

Date Posted: 7/19/2007