Network Economy Research Team ATIE, ATIE, 2002/11/30 Nov. 30,
2002 Jee, Kyoung Yong Successful Case Study of Government-driven IT
Development Model
Slide 2
2002/11/30 Jee, Kyoung Yong 2 INTRO New York Times, 2001.10.29
In Korea, Broadband Is Part of the Culture Young people crowding
rooms full of computers, housewives in apartment blocks, executives
and office workers hustling to ride the crest of the information
revolution ? All wanted the same thing: quick communication, quick
games, quick contact.
Slide 3
2002/11/30 Jee, Kyoung Yong 3 INTRO Governments Goal :
Information Super Highway
Slide 4
2002/11/30 Jee, Kyoung Yong 4 2002 KOREA/JAPAN FIFA WORLD CUP
(June) co-hosted by Korea and Japan in June. won the 4th place by
the help of four years sweat and tears. Korea team s key success
factor were versatility among players and unrivalled physical
strength.
Slide 5
2002/11/30 Jee, Kyoung Yong 5 Key Success Factor in Future
Network Business Power-based. All round Player Likewise, much of
the success in future network business will depends on both network
versatility of all IP network and service combinations.
Slide 6
2002/11/30 Jee, Kyoung Yong 6 AGENDA PART I. Snapshot on Korean
IT Industry PART II. IT related Policies PART III. Current Status
of Korean Internet PART IV. Key Success Factors for Internet
Booming PART V. Internet & The Change of Korean e-Life Style
PART VI. Internet & Middle-aged People PART VII. Future
Prospects PART VIII. Beyond ADSL PART IX. Summary &
Conclusion
Slide 7
2002/11/30 Jee, Kyoung Yong 7 PART I PART I. Snapshot On Korean
IT Industry
Slide 8
2002/11/30 Jee, Kyoung Yong 8 Economic indicator (GDP Growth)
Source : Korea National Statistical Office
Slide 9
2002/11/30 Jee, Kyoung Yong 9 Share of the IT Industry in GDP
The IT industry has continued to have a growing share of the GDP
from 8.6% in 1997 to 13.0% in 2000. Source : Korea Information
Society Development Institute
Slide 10
2002/11/30 Jee, Kyoung Yong 10 Contribution Rate of IT to GDP
The IT industry contributed to economic growth(GDP) with a mere
4.5% in 1990, which drastically increased to 50.5% in 2000. Source
: Bank of Korea Note : contribution rate = (the real amount of
value added increase from IT industry) / (the real amount of GDP
increase)
Slide 11
2002/11/30 Jee, Kyoung Yong 11 ADSL Related Export [ Unit :
millions USD ] Source : Ministry of Information and
Communication
Slide 12
2002/11/30 Jee, Kyoung Yong 12 PART II PART II. Introduction on
IT Related Policies
Slide 13
2002/11/30 Jee, Kyoung Yong 13 I. The Role of Korean Government
Government Policy In case of Korea, Governments IT policies have
contributed for market to act well by supporting a lot of firms and
service providers to start up smoothly at a initial stage.
Slide 14
2002/11/30 Jee, Kyoung Yong 14 II. Some Important IT Policies
Korea backbone computer network project (1987~1992) 5 government DB
Governments efforts to distribute more PCs (1987 & 1999) Korea
Information Infrastructure Project (1995~2010) Cyber-Korea 21
(1998~2002) 2000: The KII plan was modified (2010 > 2005)
Slide 15
2002/11/30 Jee, Kyoung Yong 15 Informatization Promotion Act of
1995 Omnibus and fundamental law to activate IT policies. Lauch of
Informatization Promotion Council (96 ) Initiation of Long-term
Basic Plan for Informatization Promotion (96 ) III. Big step for
Information Society
Slide 16
2002/11/30 Jee, Kyoung Yong 16 III. Big step for Information
Society KII Project (1995-2010) Background Announcement of US
Information Superhighway Policy(Gore) In order to enforce the
national competitiveness, It is crucial factor to construct KII as
a SOC in digital economy. Government Strategy : To take over the
risk which might be resulted from large- scaled investment at the
initial stage. To help the private sector to migrate smoothly to
the information society by way of prior experience of the
Government sector. Investment plan : To complete KII by 2005,
investing total 28.5billion US$ for construction.
Slide 17
2002/11/30 Jee, Kyoung Yong 17 IV. To meet with Internet
Booming Modified KII Project To change the end period from 2010 to
2005 (Feb.2000). Strategy To construct IP common networks and to
upgrade ATM switching networks at the same time. To construct both
wire and wireless access networks which is applying new
technologies including optical fiber, ADSL, CATV, satellite
communication, IMT-2000, and B-WLL etc.
Slide 18
2002/11/30 Jee, Kyoung Yong 18 CYBER KOREA 21(march 1999)
Koreas vision for knowledge-based information society Traffic flood
in 1998 resulted from internet booming urge the government to make
a big step for new alternatives on high speed internet of xDSL
rather than low speed ISDN Key policies were included to undertake
for the next four years (99 ~ 2002) including high speed internet.
IV. To meet with Internet Booming
Slide 19
2002/11/30 Jee, Kyoung Yong 19 PART III PART III. Current
Status of Korean Internet
Slide 20
2002/11/30 Jee, Kyoung Yong 20 I. Internet Exchanges Internet
Infrastructure 4 IXs (Internet eXchanges): KIX(NCA), KT-IX(Korea
Telecom), DACOM-IX(Dacom), and KINX(a consortium of ISPs). ISP As
of July 2002, there were 84 ISPs. 6 of them were non-commercial
operators of backbone network such as KREONET, KOSINET, PUBNET,
PUBNETPLUS, HPCNET and EDUNET
Slide 21
2002/11/30 Jee, Kyoung Yong 21 II. DSL Provisioning by ISPs
Principal Providers (as of Jun 2002) Big 5(KT, Hanaro, Thrunet,
Dreamline, Onse) These 5 ISPs have 98% of the market share
Slide 22
2002/11/30 Jee, Kyoung Yong 22 High-speed Internet Subscribers
III. More Details on High speed Internet Users xDSL : 5,734,690
CATV : 3,287,464 ISDN : 84,175
Slide 23
2002/11/30 Jee, Kyoung Yong 23 Total Internet Users Korean
Internet population reached 25.65 million as of Jun, 2002. Domains
have the 6 th largest domains in the world with 471 thousand
internet domains as of April 2002. IV. Internet Population and
Domains
Slide 24
2002/11/30 Jee, Kyoung Yong 24 76 of World's Top 1,000 Websites
are based in Korea daum, yahoo Korea, lycos are ranked in the top
20 in the world. The 60 percent of the Asian top 20 are located in
Korea. Source: Alexa.com V. Successful Result
Slide 25
2002/11/30 Jee, Kyoung Yong 25 PART IV PART IV. Key Success
Factors for Internet Booming
Slide 26
2002/11/30 Jee, Kyoung Yong 26 1.Governments Activism at
initial stage Governments long-term development plan has
contributed to guide market players, ISPs and vendors, with a
confirmed anticipation. Korea Information Infrastructure(1995~2005)
Cyber-Korea 21(1999~2002) :
Slide 27
2002/11/30 Jee, Kyoung Yong 27 Mass provisioning of Internet PC
with the help of Post Office network Half level of market price
(pentium III, 700-800$) Factoring by Post office Result :
Penetration rate of PC per family 44.5%(1998), 66%(2000),
71%(2001.6) 2.Mass Provisioning of Internet PC
Slide 28
2002/11/30 Jee, Kyoung Yong 28 3.Cultural & Behavioral
Aspect A sense of alert that one can be left behind pushes Korean
people to be more responsive Koreans tendency of being hasty served
to fuel a social atmosphere to learn and embrace computers and the
Internet.( Pali Pali characteristics ) Love to catch on new trends
Preference of new technology and premium quality In result,
Internet-literacy is now increasingly perceived as a basic skill
for daily life.
Slide 29
2002/11/30 Jee, Kyoung Yong 29 4.e-Education Contribution of
Govs firmly belief in e-Education All of Korean 43,000 elementary,
middle, and high schools are connected each other by the Internet.
Homework assigned by teachers and collaboration after school So
Korean parents aspiring spirit for top-level education accelerated
a shift toward ADSL usage Neighboring effect or dependence in
consumption in APT residential areas.
Slide 30
2002/11/30 Jee, Kyoung Yong 30 5.Emergence of 3-8-6 generation
Independent of tradition and habit. Aggressive to learn new
knowledge and to seek new information
Slide 31
2002/11/30 Jee, Kyoung Yong 31 6.Koreas unique housing pattern
Koreas unique housing pattern that 50% of Koreans live in
apartments allowed ISPs for easy deployment of LAN. Easy optic
cables installment, reasonable prices, high- speed data
transmission resulted in rapid diffusion. Source :
NCA(2000.12)
Slide 32
2002/11/30 Jee, Kyoung Yong 32 7.PC-Bang After using experience
in PC Bang, It came to be a prevalence for youngsters to enjoy
on-line game in home with the help of ADSL subscription. PC-Bang :
Korean version of Internet cafes Served as good infra for net
manias sick and tired of ISDN or D/U in 98 and 99 just before the
prevalence of xDSL PC-bang is equipped with high-speed LAN,at
low-price.
Slide 33
2002/11/30 Jee, Kyoung Yong 33 8.Aggressive Marketing &
Price Competition Aggressive Marketing promotion & Predatory
pricing behavior Various channel for sales promotion: discount in
membership fee or installation fee Relatively cheaper tariff than
that of any other countries Lowered ADSL tariff triggered sharp
increase in users demand. And this made it possible for ISPs to
look the bright side of future business and to invest more.
Slide 34
2002/11/30 Jee, Kyoung Yong 34 PART V PART V. Successful Result
I : Internet & The Change of e-Life Style
Slide 35
2002/11/30 Jee, Kyoung Yong 35 I. Korean e-Life(1) : Gender
Source : KRNIC(2001.12) Internet Users By Gender (%) - KOREA 14.8%
30% 38.6% 50.9% 41.6% 55.6% 0 30 60 MaleFemale 1999.12 2000.12
2001.12
Slide 36
2002/11/30 Jee, Kyoung Yong 36 I. Korean e-Life : Gender(US)
Source : KRNIC(2001.12) Internet Users By Gender (%) - U.S 20.2%
24.3% 53.8% 58.9% 0 30 60 MaleFemale 1997.10 2001.9
Slide 37
2002/11/30 Jee, Kyoung Yong 37 II. Korean e-Life(2) : Ages
Slide 38
2002/11/30 Jee, Kyoung Yong 38 II. Korean e-Life(3) : Surfing
Time Source: Alexa.com, 2000. South Koreans are the world's most
avid Internet surfers, followed by people in Hong Kong and the
United States, Surfers in South Korea (news - web sites) spent an
average of 19 hours 20 minutes online in July 2001, topping the
list in Internet usage(Reuters, August 24, 2001) HK : 12 hours and
12 minutes US : 10 hours and 19 minutes
Slide 39
2002/11/30 Jee, Kyoung Yong 39 II. Korean e-Life(4) : Rich
Contents Lover Netizens who have usage experience with Audio &
Video streaming Contents (as of Feb. 2001) Source :
NetValue.2001.4.2.
Slide 40
2002/11/30 Jee, Kyoung Yong 40 II. Korean e-Life(5) :
E-Commerce E-commerce site access : Korea in top position in the
world with 78.2% of its internet users visiting e- commerce sites.
Secured connection rate(the actual purchase) : 28.3%. The highest
actual purchase on e-commerce sites : auction site, game site,
shopping mall, music/literature, movies and stock/finance site in
order. Reuters, August 24, Survey: South Koreans Are Biggest
Internet Users
Slide 41
2002/11/30 Jee, Kyoung Yong 41 II. Korean e-Life(5) : e-Market
Place Number of e-MP
Slide 42
2002/11/30 Jee, Kyoung Yong 42 II. Korean e-Life(5) :
E-Commerce Volume [ Unit : Billion USD ] Source : Ministry of
Information and Communication
Slide 43
2002/11/30 Jee, Kyoung Yong 43 II. Korean e-Life(5) : Certified
Digital Signature Users [ Unit : million users]
Slide 44
2002/11/30 Jee, Kyoung Yong 44 II. Korean e-Life(6) :
Application Broadband applications comparison among 5 Asian
countries Korean loves to enjoy on-line gaming and audio or video
streaming application. Migration from text-based to
multimedia-based Source: Netvalue(2001.3)
Slide 45
2002/11/30 Jee, Kyoung Yong 45 PART VI PART VI. Successful
Result II : Internet & Middle-aged People .killer application
is cyber banking and stock trading.
Slide 46
2002/11/30 Jee, Kyoung Yong 46 Remarkable Increase of Internet
users aged 30s and 40s Increased users in the middle-aged class
promote prevalent use of cyber banking. Especially supply push of
high speed internet made it easy for residential users(housewives)
to access to the Internet, I. Prevalent Use of Cyber Banking
Slide 47
2002/11/30 Jee, Kyoung Yong 47 Housewives Web Surfing Time for
a day (+70%=+1H) I. Prevalent Use of Cyber Banking
Slide 48
2002/11/30 Jee, Kyoung Yong 48 Boomed investment in KOSDAQ
caused high penetration rate in Internet use and home PC during the
year 2000 and 2001. Contributed to provide a good opportunity for
such a person, housewife and middle-aged person, who are not good
at operating PC. Total investors in Korea : Over 10M population as
of march 2001 Over 60% of them are over 30s who has never used to
operate PC. Most of private academy and regional governments
district office have been crowded with housewives who want to learn
how to use PC and Internet. II. KOSDAK Booming
Slide 49
2002/11/30 Jee, Kyoung Yong 49 Prevalence of Stock Trade in
PC-bang Dynamic growth of Internet and KOSDAQ gave birth to the
second version of PC-bang. A kind of PC-bang equipped with stock
trading system. PC-bang couldnt get more money during the daytime
with student customers. Therefore PC-bang prepared new plan for
stock investors Now, PC-bangs target user is broadened from student
to middle-aged people who are interested in stock trading. There
are some stock trade agency companies having a partnership with
PC-bang in order to get more investors Frequency of Cyber trading
36 percent of total stock trader with a experience of cyber trading
buy or sell their stock every day over the cyber space while 77%
once per a week III. Second version of PC-Bang : Stock-Bang
Slide 50
2002/11/30 Jee, Kyoung Yong 50 Ubiquitous Internet Stock
Trading Stocks can be traded via cellphone and PDA anywhere.
Customized stock trading alerts the investor when the stock reaches
a certain price.
Slide 51
2002/11/30 Jee, Kyoung Yong 51 III. Second version of PC-Bang :
Stock-Bang
Slide 52
2002/11/30 Jee, Kyoung Yong 52 PART VII PART VII. Future
Prospects
Slide 53
2002/11/30 Jee, Kyoung Yong 53 High Speed Internet Users Is
+10M (as of September 28 th) Will be +11M (by the end of this
year)
Slide 54
2002/11/30 Jee, Kyoung Yong 54 Broadband Access Penetration
High-speed Internet penetration per family
Slide 55
2002/11/30 Jee, Kyoung Yong 55 PART VIII PART VIII. Beyond ADSL
.. As adsl market approach to saturation.
Slide 56
2002/11/30 Jee, Kyoung Yong 56 VDSL(Very-high-speed digital
subscriber) adopted for remote households and apartment Where is
traffic-congested or impossible to enjoy Internet with ADSL.
G.SHDSL Is ready to launch for S&M firms. Wireless Internet in
hot spot area Final alternatives on xDSL
Slide 57
2002/11/30 Jee, Kyoung Yong 57 The first Home Network-Ready
Apartment Complex(Operating from Nov. 2002) High-End (42~77 Floors)
Apt equipped with total home N/W equipment Security, Remote Home
Appliance Control, IT Products Networking, etc) Home Gateway :
Samsung Tower Palace
Slide 58
2002/11/30 Jee, Kyoung Yong 58 PART IX PART IX. Summary &
Conclusion
Slide 59
2002/11/30 Jee, Kyoung Yong 59 36% Growth in Six Months 150%
Year Over Year DSL Market For world-wide DSL market
development
Slide 60
2002/11/30 Jee, Kyoung Yong 60 For world-wide DSL market
development DSL Market Penetration to 30 June 2002: Top 20
Countries DSL market penetration is based on the percentage of
total telephone lines in each country that are delivering services
over broadband DSL. Market potential to be developed in
world-wide
Slide 61
2002/11/30 Jee, Kyoung Yong 61 Valuable experience in the
course of xDSL deployment. New last mile solutions which is
best-fitted for such an intensive residential area like Korea or
even rural areas. There are many rooms for cooperative possibility
through partnership between U.S firms with core technology and
marketing network and Korean firms with manufacturing technology
and field evidence. So, we can go together for development of
worldwide DSL market For world-wide DSL market development
Slide 62
2002/11/30 Jee, Kyoung Yong 62 Q & A Thank You for Your
Attention J e e, K y o u n g Y o n g ( k y j e e @ e t r i. r e. k
r ) (+82-42-860-5666) Network Economy Research Team