Korean IT firms 'go inter'
With successful businesses built on ubiquitous broadband, Korean web pioneers are now looking overseas
Story by TONY WALTHAM, Seoul, Korea
Every June, some of Asia's telecom and IT journalists have to make a decision whether to cover CommunicAsia in Singapore or the Solutions and Content Exhibition of Korea (SEK) in Seoul.
Both are well-established events with a heavy telecom component; SEK 2007 marked its 21st year last month, while it was CommunicAsia's 18th annual show this year and, at least for the past two years, they have been staged head-to-head in mid-June.
Journalists who headed south on a two-hour flight from Bangkok could see how show floor at Singapore Expo had been turned into a hotbed of innovation with several hotspots demonstrating 4G wireless connectivity, but for the second year in a row last week I flew for five hours in the opposite direction.
After landing at Seoul's Incheon Airport, I would learn how the entire country of Korea has become a testbed for convergence where almost 90 percent of households now have a broadband connection. And when Seoul's inhabitants are on the move they have access to a choice of terrestial or satellite digital multimedia broadcasting (DMB) services, high-speed downlink packet access (HSDPA) or mobile WiMAX networks.
There's a lot of enthusiasm at the KT booth, where the theme was "U Life 2.0".
And somehow much of the latest equipment on display at SEK 2007, which is organised by Electronic Times, seems more relevant than at most other telecom shows - because you could take the futuristic devices on display outside the Seoul's COEX exhibition centre and continue to use them.
Mobile WiMAX is known in Korea as Wibro (wireless broadband) and seeing a Wibro handset on display at the Samsung booth I asked an assistant how long the battery life might be. She told me "four hours and twenty minutes" - which sounded very "real-world" to me. (For Wibro impressions, see story at left.)
Similarly, HSDPA services have been available in Korea since May last year, while DMB enables people to watch television or movies while on the go.
Korea has the highest rate of broadband penetration in the world and we were told in a briefing by Korea's Ministry of Information and Communications that 99.1 percent of Korea's Internet subscribers are now on broadband, meaning that dial-up Internet is now largely history.
The country has the infrastructure in place and an active Internet population of 30 million that is actively embracing the new technologies as is evidenced by the popularity of many sites such as CyWorld. This is a social networking site, much like MySpace, where 40.5 percent of the country's population had a "minihompy" which combines a photo gallery, message board, guestbook, video, and personal bulletin board.
iriver's Mickey Mouse MP3 player was an instant hit in Korea where cute is often seen as cool.
Similarly, Internet-banking has caught on in a big way in Korea with 74.1 percent of the population engaging in online transactions - which accounted for 36.7 percent of all financial transactions there, we were told.
Electronic commerce is another beneficiary of Korea's embrace of the Internet, a trend enabled with strong government backing and investments that began following the IMF crisis there a decade ago.
E-commerce accounted for 21.4 percent of all trading in Korea last year and the IT industry as a whole accounted for 16 percent of Korea's GDP, contributing to more than 40 percent of Korea's economic growth, according to the deputy minister for the ministry of information and communications (MIC) Seol Jeongseon. He told us that the government would continue to make substantial investments, particularly to promote the development of open source software.
E-Government and e-procurement is also big in Korea, while politics is often now conducted online in blogs and through user-created content. Jeongseon noted that Korean society was going through great change, and yet, despite the high Internet penetration, the Seoul government was still working to bridge the digital divide and was helping to drive broadband into the rural areas to include everyone, he said.
On the other hand, the government is also doing its best to counter the dark side of the Internet and has set up a response centre to investigate cyber-attacks and also to look into identity theft and privacy issues.
Korea has become a real-world testbed for many multinational IT corporations and over a dozen have invested in R&D centres there. These include IBM, Intel, EMC, HP, SAP and Microsoft while an MIC representative explained that the concept was "if it works in Korea, it works in the world."
This Samsung Wibro-capable handset offers four hours and 20 minutes of battery life and Korea Telecom now provides mobile WiMAX connectivity throughout Seoul.
But perhaps the biggest beneficiaries of Korea's aggressive IT strategy have been the local telecom providers such as KT, SK Telecom and Hanarotelecom as well as hardware manufacturers that have become modern global powerhouses: Samsung and LG Electronics.
We were told that five Korean companies are now listed in the top 100 IT firms worldwide, while up-and-coming contenders would be those that are in the Web 2.0 business, such as NHN that offers Korea's most popular search portal and an online gaming portal as well as Pandora TV which provides user-created video content and whose service predates that be YouTube by a few months.
Both NHN, which stands for Next Human Network, and Pandora TV are perhaps little-known outside Korea today, but this is likely to change since both companies have aggressive expansion plans that include diversifying into English, Japanese and Chinese-language services.
NHN operates the search portal Naver and Naver Jr for children; Naver.com is the most-visited site in Korea, with executives claiming that 50 percent of the country's Internet population visit it daily, or 16 million unique visitors.
The company is well-aware of the potential rewards of going international since Hangame, which offers board games, casual and sports games and MMORPGs in Korea, is the most-popular game portal there, where it has 24 million registered users.
But NHN also has a Japanese subsidiary with 20 million users, making Hangame Japan the leading game portal there where it offers a choice of over 160 games while the company also has a casual game portal in China called Lianzhong with 170 million registered users. Also, since June last year, it has operated another game portal in the USA called ijji.com, where it now has two million registered users.
The search portal Naver, which is supported by advertising where search ads provide 52 percent of the company's revenue and banner ads a further 17 percent, will expand into Japan at the end of this year and then into the USA, NHN executives told us.
The average age of NHN's users is between 30 and 31 and, interestingly, Koreans must register with their social security numbers to use its services, which is a similar requirement for Pandora TV, the user-created content video portal that CFO Michael Hong said targetted the sub-25 and sub-35 age groups.
Pandora TV was launched in October 2005 after its founders had gained Flash experience in the online greeting card business. They had seen the opportunity around video, given Korea's broadband environment, Hong explained.
After successfully raising venture capital and now one-third the size of YouTube, this portal sees close to 10,000 clips uploaded each day, while revenues are driven by advertisements - banner ads, video ads and search ads - and users pay to view clips using a point system, while the revenue creators receive a 10 percent share as an incentive.
With close to 1.4 million unique visitors each week, Pandora TV is the fifth most popular Internet brand based on keywords used in the Naver portal but the company has set its sights on becoming the "YouTube of Asia" by the end of 2008, Hong said.
Pandora TV planned to launch a global website this September and would be offered in five or as many as seven different languages, where a multilingual search would also be enabled, he added.
Current user-created content in Korean would be dubbed and provided in different languages to provide an initial video pool for users from different countries to tap into while the major focus would be on Asia, he said. The western part of the United States would also be targetted, with local servers provided on the US west coast, Hong added.
To achieve this, many partnerships in various countries were now being forged - although not with any in Thailand yet. Hong, who also manages Pandora TV's global operations, noted that broadband penetration in each country was the main consideration with five million users on high-speed broadband being the determining point.
Another example of broadband enabling a new business model in Korea is Hanarotelecom which became the world's first ADSL provider back in 1999 and which now accounts for 26 percent of Korea's broadband market share.
Eleven months ago, the company introduced an IP video-on-demand service it calls Hana TV that has already acquired half a million paid subscribers to become the world's second- or third-biggest global provider of IPTV services. In terms of subscribers, PCCW in Hong Kong leads with 650,000, but rapidly-growing Hana TV may have already overtaken France Telecom which Accenture says had 450,000 subscribers in December 2006.
Offering a set-top box with an 80GB hard disk, Hana TV streams video using the H.264 codec at 2 Mbps and the programming starts to play after an 18-20 second delay - during which time an ad is played - with content ranging from Hollywood blockbusters to Korean dramas and movies.
Of the major Korean telcos, only KT had a presence on the show floor of SEK 2007 last week where its theme was "U Life 2.0," where the abbreviation "U" stands for ubiquitous, as in the slogan for this year's exhibition and conference: "ubiquitous life 2.0+".
The booth had a Web 2.0 theme and was divided into four sections around the Internet, mobile, sharing and TV, and it was aggressively demonstrating upload and download speed comparisons between HSDPA and the faster Wibro technology that KT has introduced across Seoul.
At an adjacent booth, Samsung was introducing its slim SCH-M620 and SPH-M6200 models of HSDPA smart phones along with the SMT-i8000 video phone that uses a broadband connection for both voice and video calls as well as a wireless IP phone, the SMT-W6100. The company also had a selection of DMB-capable handsets with swivel screens, pocket-sized camcorders, portable displays and MP3 players among its exhibits.
ReignCom, better known by the iriver branded range of MP3 players, was introducing a Mickey Mouse model offered in various colours where you can tweak the volume by twisting an ear while the company was also showing off a new DMB mobile television player. Elsewhere, LG Electronics also unveiled its DMB HSDPA phone, the LG-KH1400 that offers both DMB and HSDPA functionality.
But attracting the most attention at SEK 2007 was undoubtedly the iLuv booth, a supplier of accessories for the Apple iPod and Samsung's Yepp music players, where a bevy of models were demonstrating "fashionware" in the form of Bluetooth-enabled iPod controls integrated into their bikini tops. The company was also displaying docking systems and stereo speakers for iPods, but at times showgoers ignored those displays to stand three deep in front of the stage, aiming their camera phones and digital cameras at the models.
Robots, some able to perform a dance or two, could also be found lurking less prominently in various booths, while research projects from various universities that were mostly related to wireless technology, including cellular antenna diversity, demonstrations of ultra wideband (UWB) or applications involving RFID sensors, were on display at the MIC's IT Research Centre (ITRC) Forum section of the exhibition.
Holographic 3D displays, along with applications around human-computer interaction, were also showing the future of technology in the ITRC Forum section, while open source software had a big showcase in the main exhibition hall since Linux World Korea 2007 was being staged in concert with SEK 2007.
This attracted major international exhibitors that included HP, IBM, CA, RedHat and AsiaNux, along with companies such as BlackDuck, which provides a scanning service to check the software code of enterprise or other applications developed in-house for open source code fragments that might have inadvertantly be incorporated - and advises on the possible licensing implications.
SEK 2007 was a lot more focussed on the host country, whereas all reports indicate that Singapore's CommunicAsia was far more international in scope - but I cannot help but feel that Korea's embrace of IT in all aspects - hardware, software and packet infrastructure both fixed and mobile - is paving the way for that country's future prosperity in an increasingly digital world, with lessons to be learned from deregulation and its open embrace of the Internet.
With successful businesses built on ubiquitous broadband, Korean web pioneers are now looking overseas
Story by TONY WALTHAM, Seoul, Korea
Every June, some of Asia's telecom and IT journalists have to make a decision whether to cover CommunicAsia in Singapore or the Solutions and Content Exhibition of Korea (SEK) in Seoul.
Both are well-established events with a heavy telecom component; SEK 2007 marked its 21st year last month, while it was CommunicAsia's 18th annual show this year and, at least for the past two years, they have been staged head-to-head in mid-June.
Journalists who headed south on a two-hour flight from Bangkok could see how show floor at Singapore Expo had been turned into a hotbed of innovation with several hotspots demonstrating 4G wireless connectivity, but for the second year in a row last week I flew for five hours in the opposite direction.
After landing at Seoul's Incheon Airport, I would learn how the entire country of Korea has become a testbed for convergence where almost 90 percent of households now have a broadband connection. And when Seoul's inhabitants are on the move they have access to a choice of terrestial or satellite digital multimedia broadcasting (DMB) services, high-speed downlink packet access (HSDPA) or mobile WiMAX networks.
There's a lot of enthusiasm at the KT booth, where the theme was "U Life 2.0".
And somehow much of the latest equipment on display at SEK 2007, which is organised by Electronic Times, seems more relevant than at most other telecom shows - because you could take the futuristic devices on display outside the Seoul's COEX exhibition centre and continue to use them.
Mobile WiMAX is known in Korea as Wibro (wireless broadband) and seeing a Wibro handset on display at the Samsung booth I asked an assistant how long the battery life might be. She told me "four hours and twenty minutes" - which sounded very "real-world" to me. (For Wibro impressions, see story at left.)
Similarly, HSDPA services have been available in Korea since May last year, while DMB enables people to watch television or movies while on the go.
Korea has the highest rate of broadband penetration in the world and we were told in a briefing by Korea's Ministry of Information and Communications that 99.1 percent of Korea's Internet subscribers are now on broadband, meaning that dial-up Internet is now largely history.
The country has the infrastructure in place and an active Internet population of 30 million that is actively embracing the new technologies as is evidenced by the popularity of many sites such as CyWorld. This is a social networking site, much like MySpace, where 40.5 percent of the country's population had a "minihompy" which combines a photo gallery, message board, guestbook, video, and personal bulletin board.
iriver's Mickey Mouse MP3 player was an instant hit in Korea where cute is often seen as cool.
Similarly, Internet-banking has caught on in a big way in Korea with 74.1 percent of the population engaging in online transactions - which accounted for 36.7 percent of all financial transactions there, we were told.
Electronic commerce is another beneficiary of Korea's embrace of the Internet, a trend enabled with strong government backing and investments that began following the IMF crisis there a decade ago.
E-commerce accounted for 21.4 percent of all trading in Korea last year and the IT industry as a whole accounted for 16 percent of Korea's GDP, contributing to more than 40 percent of Korea's economic growth, according to the deputy minister for the ministry of information and communications (MIC) Seol Jeongseon. He told us that the government would continue to make substantial investments, particularly to promote the development of open source software.
E-Government and e-procurement is also big in Korea, while politics is often now conducted online in blogs and through user-created content. Jeongseon noted that Korean society was going through great change, and yet, despite the high Internet penetration, the Seoul government was still working to bridge the digital divide and was helping to drive broadband into the rural areas to include everyone, he said.
On the other hand, the government is also doing its best to counter the dark side of the Internet and has set up a response centre to investigate cyber-attacks and also to look into identity theft and privacy issues.
Korea has become a real-world testbed for many multinational IT corporations and over a dozen have invested in R&D centres there. These include IBM, Intel, EMC, HP, SAP and Microsoft while an MIC representative explained that the concept was "if it works in Korea, it works in the world."
This Samsung Wibro-capable handset offers four hours and 20 minutes of battery life and Korea Telecom now provides mobile WiMAX connectivity throughout Seoul.
But perhaps the biggest beneficiaries of Korea's aggressive IT strategy have been the local telecom providers such as KT, SK Telecom and Hanarotelecom as well as hardware manufacturers that have become modern global powerhouses: Samsung and LG Electronics.
We were told that five Korean companies are now listed in the top 100 IT firms worldwide, while up-and-coming contenders would be those that are in the Web 2.0 business, such as NHN that offers Korea's most popular search portal and an online gaming portal as well as Pandora TV which provides user-created video content and whose service predates that be YouTube by a few months.
Both NHN, which stands for Next Human Network, and Pandora TV are perhaps little-known outside Korea today, but this is likely to change since both companies have aggressive expansion plans that include diversifying into English, Japanese and Chinese-language services.
NHN operates the search portal Naver and Naver Jr for children; Naver.com is the most-visited site in Korea, with executives claiming that 50 percent of the country's Internet population visit it daily, or 16 million unique visitors.
The company is well-aware of the potential rewards of going international since Hangame, which offers board games, casual and sports games and MMORPGs in Korea, is the most-popular game portal there, where it has 24 million registered users.
But NHN also has a Japanese subsidiary with 20 million users, making Hangame Japan the leading game portal there where it offers a choice of over 160 games while the company also has a casual game portal in China called Lianzhong with 170 million registered users. Also, since June last year, it has operated another game portal in the USA called ijji.com, where it now has two million registered users.
The search portal Naver, which is supported by advertising where search ads provide 52 percent of the company's revenue and banner ads a further 17 percent, will expand into Japan at the end of this year and then into the USA, NHN executives told us.
The average age of NHN's users is between 30 and 31 and, interestingly, Koreans must register with their social security numbers to use its services, which is a similar requirement for Pandora TV, the user-created content video portal that CFO Michael Hong said targetted the sub-25 and sub-35 age groups.
Pandora TV was launched in October 2005 after its founders had gained Flash experience in the online greeting card business. They had seen the opportunity around video, given Korea's broadband environment, Hong explained.
After successfully raising venture capital and now one-third the size of YouTube, this portal sees close to 10,000 clips uploaded each day, while revenues are driven by advertisements - banner ads, video ads and search ads - and users pay to view clips using a point system, while the revenue creators receive a 10 percent share as an incentive.
With close to 1.4 million unique visitors each week, Pandora TV is the fifth most popular Internet brand based on keywords used in the Naver portal but the company has set its sights on becoming the "YouTube of Asia" by the end of 2008, Hong said.
Pandora TV planned to launch a global website this September and would be offered in five or as many as seven different languages, where a multilingual search would also be enabled, he added.
Current user-created content in Korean would be dubbed and provided in different languages to provide an initial video pool for users from different countries to tap into while the major focus would be on Asia, he said. The western part of the United States would also be targetted, with local servers provided on the US west coast, Hong added.
To achieve this, many partnerships in various countries were now being forged - although not with any in Thailand yet. Hong, who also manages Pandora TV's global operations, noted that broadband penetration in each country was the main consideration with five million users on high-speed broadband being the determining point.
Another example of broadband enabling a new business model in Korea is Hanarotelecom which became the world's first ADSL provider back in 1999 and which now accounts for 26 percent of Korea's broadband market share.
Eleven months ago, the company introduced an IP video-on-demand service it calls Hana TV that has already acquired half a million paid subscribers to become the world's second- or third-biggest global provider of IPTV services. In terms of subscribers, PCCW in Hong Kong leads with 650,000, but rapidly-growing Hana TV may have already overtaken France Telecom which Accenture says had 450,000 subscribers in December 2006.
Offering a set-top box with an 80GB hard disk, Hana TV streams video using the H.264 codec at 2 Mbps and the programming starts to play after an 18-20 second delay - during which time an ad is played - with content ranging from Hollywood blockbusters to Korean dramas and movies.
Of the major Korean telcos, only KT had a presence on the show floor of SEK 2007 last week where its theme was "U Life 2.0," where the abbreviation "U" stands for ubiquitous, as in the slogan for this year's exhibition and conference: "ubiquitous life 2.0+".
The booth had a Web 2.0 theme and was divided into four sections around the Internet, mobile, sharing and TV, and it was aggressively demonstrating upload and download speed comparisons between HSDPA and the faster Wibro technology that KT has introduced across Seoul.
At an adjacent booth, Samsung was introducing its slim SCH-M620 and SPH-M6200 models of HSDPA smart phones along with the SMT-i8000 video phone that uses a broadband connection for both voice and video calls as well as a wireless IP phone, the SMT-W6100. The company also had a selection of DMB-capable handsets with swivel screens, pocket-sized camcorders, portable displays and MP3 players among its exhibits.
ReignCom, better known by the iriver branded range of MP3 players, was introducing a Mickey Mouse model offered in various colours where you can tweak the volume by twisting an ear while the company was also showing off a new DMB mobile television player. Elsewhere, LG Electronics also unveiled its DMB HSDPA phone, the LG-KH1400 that offers both DMB and HSDPA functionality.
But attracting the most attention at SEK 2007 was undoubtedly the iLuv booth, a supplier of accessories for the Apple iPod and Samsung's Yepp music players, where a bevy of models were demonstrating "fashionware" in the form of Bluetooth-enabled iPod controls integrated into their bikini tops. The company was also displaying docking systems and stereo speakers for iPods, but at times showgoers ignored those displays to stand three deep in front of the stage, aiming their camera phones and digital cameras at the models.
Robots, some able to perform a dance or two, could also be found lurking less prominently in various booths, while research projects from various universities that were mostly related to wireless technology, including cellular antenna diversity, demonstrations of ultra wideband (UWB) or applications involving RFID sensors, were on display at the MIC's IT Research Centre (ITRC) Forum section of the exhibition.
Holographic 3D displays, along with applications around human-computer interaction, were also showing the future of technology in the ITRC Forum section, while open source software had a big showcase in the main exhibition hall since Linux World Korea 2007 was being staged in concert with SEK 2007.
This attracted major international exhibitors that included HP, IBM, CA, RedHat and AsiaNux, along with companies such as BlackDuck, which provides a scanning service to check the software code of enterprise or other applications developed in-house for open source code fragments that might have inadvertantly be incorporated - and advises on the possible licensing implications.
SEK 2007 was a lot more focussed on the host country, whereas all reports indicate that Singapore's CommunicAsia was far more international in scope - but I cannot help but feel that Korea's embrace of IT in all aspects - hardware, software and packet infrastructure both fixed and mobile - is paving the way for that country's future prosperity in an increasingly digital world, with lessons to be learned from deregulation and its open embrace of the Internet.
- Rudyard Kipling
The Golden Rule - He who has the gold, makes the rules!
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