Jung Man-Won is the President and CEO of SK Telecom; he had more than 15 years of management experience in SK Group before becoming President and CEO of SK Telecom. Jung Man-Won was Vice President of the Internet Business Division at SK Telecom, Vice President of Customer Business Development Division at SK Energy and most recently, the CEO of SK Networks. Jung Man-Won holds an M.B.A. from New York University and a B.A. in Business Administration from Yonsei University in Korea.
Smartphones, tablet PCs and the growth of mobile applications have focused South Korea on dominating the mobile data market. South Korea hopes to lead this market globally by developing leading edge applications platforms. Korean operators needed to build a technological ecosystem that provides an open environment where developers and companies can create different kinds of new and innovative services and applications that leverage their decades of accumulate expertise in mobile convergence services like mobile finance, LBS (location-based services) and mCommerce.
The global information and communication technology (ICT) market is entering a new era as a result of the mobile and wireless revolution. As more and more global players jump into the rapidly growing market, boundaries among sectors within the ICT industry, such as content, software, device and network, are blurring and changes are taking place more quickly. With the recent spread of connected devices like smartphones and tablet PCs as well as the deployment of continuously evolving wireless network technologies, the whole ICT sector is focused on gaining dominance of the mobile Internet or data market. In fact, research from the past years have shown that the ICT industry has been moving towards data services, away from voices services, which have traditionally owned the market. According to Gartner, data services revenues represent 28 per cent of the total ICT market this year and 38 per cent by 2014. At this juncture, it is imperative for South Korea to deeply understand and lead the market trend, in order to prepare itself as a global ICT powerhouse in the future It is projected that the growth of data market will lead to greater need for next-generation mobile network technologies, including wireless broadband. Since South Korea achieved the world’s first commercialization of CDMA technology, the country has been leading the development of the global ICT industry. By being among the first in the world to commercialise technologies such as CDMA 2000, EV-DO and handset-based HSDPA, Wibro has been recognized worldwide for its technical competence in the export of network solutions and relevant equipment. Currently, in South Korea the mobile coverage - including in-building and underground coverage - is nearly 100 per cent. Telecommunications operators are currently implementing plans to develop and deploy next-generation networks. For instance, plans are underway to introduce LTE in 2011. Based on its strength in network technology, South Korea is moving swiftly to lead changes in the global telecommunications market and to seize new business opportunities. The uptake in smartphones has increased the importance of applications and platforms as they bring added value into the mobile market. Mobile operators used to be the main providers of these platforms, but smartphones shifted the paradigm to create an open mobile Internet environment where the lines between computing and mobile Internet services are disappearing. Companies from both fixed and mobile industries are competing to gain initiative in the new playing field. Mobile operators now face fiercer competition as non-network players are likely to increase their influence in the mobile market by introducing their well-developed platforms. The platform and the ICT value chain In the global ICT industry, the power of the platform has gradually increased over time. Until the early 2000s, when wired and wireless infrastructures were being built by network operators, the platform was regarded as a mere value-added service mechanism for networks. However, as the importance of platforms steadily grew from the mid-2000s, companies began to lay a foundation through the convergence with devices (iTunes) and with ad search (Adwords). At the same time, services like Facebook and Youtube, where users are encouraged to participate, as well as Google’s API (application programming interface), have started to create a new trend. Platform companies are rapidly strengthening their influence over all areas of the ICT value chain, helped by the development of broadband network environment including HSPA and WiFi, as well as by the spread of smartphones since 2007. For example, non-network providers are launching platforms that penetrate the boundary of network providers to offer services like WiFi/3G VoIP. Also Amazon’s Kindle and Apple’s iTunes are now wielding pricing power and leading distribution based on their platforms. As for Apple, which transformed itself into a mobile device company, it has achieved huge success with its iPhone + AppStore strategy and made the platform a very important criterion for consumers when choosing a mobile device. The platform business in South Korea The accelerated adoption of smartphones in late 2009 made the South Korean ICT sector realize the importance of the platform. Recently, awareness is growing among the South Korean government and ICT companies that the platform field must be nurtured and strengthened. In fact, mobile operators in South Korea have promoted the platform businesses by developing innovative ‘killer’ services and attracting a significant number of users in South Korea. From early 2000, South Korean mobile operators, under the name of wireless Internet business, developed and offered diverse convergence services that encompass many different areas like portal, navigation, music, SNS, finance and commerce as network-related value-added services. Some of these services namely, finance and music and their enabling platforms are increasingly being exported to the global market. However, more could have been done to further improve the value of these platforms. Korean operators needed to build a leading edge ecosystem that provides an open environment for other developers and companies to create many different kinds of new and innovative services and applications. Also, despite the successful domestic launch of a number of platforms, they fell short of becoming widely adopted global standards. A global platform leader Many new services have not yet established a profitable model; they are heavily dependent on ad revenues. Nevertheless, it is expected that with an expanded user base, platform providers will find it easier to earn a profit and offer services of greater value to customers. The platform business is definitely a new opportunity for South Korea’s ICT industry, as it leverages decades of accumulate expertise in mobile convergence services like mobile finance, LBS (location-based services) and mCommerce. Thus, the South Korean mobile industry must make efforts to create renewed business opportunities in the platform field based on its technological competence in platform development and an open environments. To this end, it needs to focus on services that hold great potential such as LBS, mobile commerce, TV portals and cloud computing. Moreover, it is imperative to look beyond the individual consumer market and identify needs of corporate customers of various industries so as to expand platforms into a B2B business. One of the most important requisites of platform business is scalability, which provides the basis for diverse services. When developing platforms, operators need to build one that minimizes the dependency on a specific network or device so that it can be used and expanded with a variety of networks and devices for various services in the future. In addition, it will be wise to pursue ‘openness’ by creating a cooperative ecosystem among businesses in the sector - i.e. content providers, device manufacturers, outside developers, etc. – from the early phase of platform development in order to better acquire competitive advantage in this business. Lastly, armed with attractive platforms, South Korean operators must enter the global market. The key here is to build platforms based on differentiated technology with which they can create global standards, while providing customized services that run on these platforms. The South Korean mobile telecommunications industry developed its basic capability and knowhow in mobile platform by promoting a variety of convergence businesses. It can become a strong, competitive, global platform provider by fully utilizing its extensive experience network technology, devices and content. In the end, only a few platform operators will be successful leaders of the global ecosystem and generate profits. South Korean ICT companies will have to prepare themselves for global competition by pushing ahead with the platform business using their accumulated experience and know-how. By making the most of this growth opportunity, South Korea can maintain its position as the leading ICT powerhouse today and into the future.