South Korea’s fixed-line operator, Korea Telecom (KT), is to merge with its majority-owned mobile unit, KTF, the country’s second-largest mobile operator.
The merger is an effort to offer bundled fixed and mobile services and increase its global exposure. KT’s move is seen as necessary if it is to compete with SK Telecom and LG Telecom.
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South Korean regulations requiring handset applications to be based on a homegrown technology are largely why the country’s mobile phone market is dominated by Samsung Electronics and LG Electronics.
As a result of the WIPI ruling – the acronym stands for wireless internet platform for interoperability – foreign companies have found it too expensive to produce handsets tailored for South Korean consumers.
Nokia is virtually absent in the country and Motorola is a minor competitor with less than 5 per cent of the market. Apple has kept its iPhone out of the market because of the WIPI rule.
Yet international handset makers are keen to enter South Korea, one of the world’s most technologically advanced and expensive telecoms markets.
Now President Lee Myung-bak’s newly elected government has expressed a willingness to soften the WIPI rule, potentially opening the door to foreign handset makers.
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