At the end of last week South Korea’s communications watchdog turned down bids by two Korean firms to set up the country’s fourth mobile operator. Although details are scant at this time the reasons appear to be insufficient finance.
Korea’s telecoms landscape is dominated by KT, SK Telecomm and LG’s U+ service. Korean telecoms companies have been struggling with the proliferation of free text, voice and data services on smart phones, demonstrated only last week when South Korean telecom giant KT Corp released data showing that its fourth-quarter net profit more than halved from a year earlier. It has blamed increased spending on long-term evolution (LTE) facilities and one-off payroll costs for the poor showing.
It will be interesting to see how the mobile landscape plays out in Korea as free data and LTE services continue to undermine traditional revenue streams for large telecoms corporations. The anticipation is that they will look into alternative revenue streams, including their own applications, to boost flagging profits.