New Fixed Networks research report from Business Monitor International is now available from Fast Market Research

Boston, MA -- (SBWire) -- 08/20/2013 --South Korea is one of the most advanced markets in the world and is often used as a reference point to determine the direction of other developed markets. The rapid migration of subscribers from 3G to LTE shows the country to be at the forefront of adopting new technologies. By the end of 2013, the number of LTE subscriptions will pass 20mn and may even outnumber 3G by 2014. There is a dwindling population still using 2G services but we expect this to end by 2015. This has perhaps caused a slowdown of fixed broadband connections, while growth in VoIP is mitigating the loss of PTSN fixed voice connections. With plans to launch LTE Advanced in September 2013, the South Korean market shows just how much demand for data is driving revenues.

Key Data

Our mobile forecasts see all subscribers on 3G or 4G networks by the end of 2015, although there is potential for SK to seek an earlier switch-off of its 2G infrastructure. Mobile penetration will creep up slowly but operator focus will be on converging subscribers to 4G platforms from 3G.

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The fixed-line market is still expanding, mostly due to the growth of VoIP but it is slowing noticeably. Our downwards revisions to forecasts envisage fixed-line penetration of 56.2% by YE13, falling to a still healthy 55.4% at YE17.

ARPU forecasts were revised downwards as most operators reversed trends of growth in the quarter, with significant declines. We believe there is still plenty of downside potential to our forecasts but growth in the previous quarter is a positive sign for operators.

Key Developments

The Bank of Korea (BOK) reports that, as of Q113, there were 41.130mn m-banking accounts registered with 17 local banks, the state-run Korea Post and local branches of HSBC Holdings. This represented q-oq and y-o-y increases of 10.9% and 51.6% respectively. Of the Q113 figure, 28.070mn accounts were accessed through smartphones, either via mobile internet browsers or - more commonly - via dedicated applications. In Q113 the number of m-banking enabled smartphones increased by 105.3% and 17.1% q-o-q and y-o-y respectively. The remaining 13.060mn m-banking accounts were accessed via dedicated 'virtual machine' cards installed in handsets or via special chips. Usage of these platforms is on the wane, owing to the greater sophistication and security offered by smartphones.

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