Competition in Korean mobile telecommunications market: business strategy and regulatory environment |
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| Institution: | 1. College of Science, China University of Petroleum(East China), Qingdao 266580, China;2. School of Mathematics, Changchun Normal University, Changchun 130032, China;1. Marine Research Institute, Department of Biological Sciences, University of Cape Town, Private Bag X3, Rondebosch, 7701 Cape Town, South Africa;2. Marine Research Institute, Department of Biological Sciences, University of Cape Town, Private Bag X3, Rondebosch, 7701 Cape Town, South Africa;1. Cranfield University, Institute for Environment, Health, Risk and Futures, Cranfield, Bedfordshire MK43 0AL, UK;2. Cranfield University, School of Management, Cranfield, Bedfordshire MK43 0AL, UK |
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| Abstract: | After the launch of PCS in 1997, the Korean mobile telephony market achieved a remarkable subscriber base growth. The market is composed of a differentiation advantage seeker, SK Telecom; a cost advantage seeker, LG Telecom; and three other carriers: Hansol PCS, Korea Telecom Freetel, and Shunsegi Telecom that do not show clear adherence to any type of advantage. Despite large growth in subscribers, price competition has not occurred after the competition except in handset subsidies. New restrictions on handset subsidies, closing the only door for price competition, favored a differentiation seeker at the expense of a cost advantage seeker. The Ministry of Information and Communication’s provisional plan for quality evaluation without price deregulation runs the risk of quality over-provision that is sub-optimal, and may further distort the business performance of carriers. Overall complete deregulation is necessary, in order to enhance the competitiveness of the Korean mobile telephony industry and to increase consumer welfare. |
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