Competition among Mobile Service Companies

Korea Telecom Freetel (KTF), the merged corporate entity of Korea Telecom and KTM.com, was officially inaugurated in Hotel Shilla on May 2. As a result, there are total three mobile service companies, including SK Telecom and LG Telecom. KTF started with 911 billion won. Soon after the merger, it was restructured as a telecom giant valued at 8.5 trillion won (based on the closing price on April 30) claiming 8.7 million subscribers. The inauguration of KT Freetel opened up the new era of competition among the mobile service companies, which is now consisted of two gigantic companies –SK and KTF- and LG Telecom. The inauguration of KTF can be interpreted as a signal of the government’s new reform plan for the mobile service market that will be run by three giant companies, one of which is in the government’s blueprint.

KTF accounts for 32.6 percent the domestic market share trailing SK Telecom’s 54 percent share. KTF plans to mobilize 9.9 million subscribers to secure 36 percent market share. On the contrary, SK has to lower the market share under 50 percent according to the order issued by the Korea Fair Trade Commission. Meanwhile, LG Telecom aims for 20 percent domestic market share until the end of the year. LG also counts on CDMA2000 1X and the cooperation with SK, which mobilizes the subscribers through the commercial agency network.

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