WHY YOU SHOULD BUY THE SOUTH KOREA TELECOMS INDUSTRY REPORT:
- Benefit from the latest market opportunities
- Understand the threats to your operations and investments and protect your company against future risks
- Gain insights on emerging trends supporting, enhancing or disrupting your activities in the market
- Get a full view of the competitive landscape to assess your market position.
- Forecasts as a key input for successful budgeting and strategic business planning in the telecoms market
- Target business opportunities and risks in the telecoms sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments
- Assess the activities, strategy and market position of your competitors, partners and clients via our Operators Profiles
The South Korea Telecommunications Industry Report, 2020-2025 includes a comprehensive review of the South Korean market dynamics, market sizing, market forecasts, analysis, insights and key trends.
South Korea Telecoms Industry Report at a Glance
Globally, the telecommunications sector is proving to be a core and essential infrastructure service to national economies, with data infrastructure becoming critical in a connected world and will likely increasingly attract a new class of investors such as large infrastructure funds. Idem Est Research expects the South Korean telecommunications industry to remain steady thanks to the defensiveness nature of the industry, amid the political uncertainties and an uncertain economic outlook due to the COVID-19 pandemic.
The South Korean telecommunications market is the third-largest market in the world by revenue with three large fixed and mobile network operators that invested heavily in towers and fibre infrastructure over the past two decades despite an overall market underpinned by low economic and population growth.
To support the government’s Korean New Deal (K-New Deal) objectives, the three operators agreed to invest a combined US$2.1 billion in the period to 2022, initially rolling out 5G in the capital, Seoul, and six other metropolitan areas, before moving on to extending coverage nationwide.
Growing mobile phone penetration and high fixed broadband take-up among households will fuel future growth over the next five years.
Following the market expansion over the last 5 years, Idem Est Research forecasts subdued revenue growth growing to 2025, with the Covid-19 pandemic, the diminishing impact of declining legacy voice and SMS revenue and low population growth.
Overall revenue share shifted to LG Uplus at the expense of SK Telecom over the 2014-2019 period, while KT remaining stable. Idem Est Research forecasts market growth will pick up in 2021 and start tapering off by the end of our forecast with South Korea’s expected population decline starting to impact our forecast. South Korea exhibits a well-performing, well-funded three-player market with a low level of debts, rational pricing with the quasi status-quo likely to remain no new mobile entrant expected during the 2020-25 forecast period.
The strategic and economic competition between South Korea and China is at the centre of advanced technology competition and the future of global data and communications. For most developed countries in the region, gaining strategic and economic power depends heavily on having technological ascendancy, especially in data and communications.
The Capex from South Korean operators is cyclical with mobile rollout leading to investments in line with the operators’ top-line growth. Capex investments peaked between 2012 and 2014 while all three operators built their respective 4G mobile network. Capex investments increased again in 2019 and will continue through to 2025, as mobile operators invest in 5G. South Korea sees 5G as the backbone of a wide range of technological advances including autonomous vehicles, smart cities and Internet of Things. All three mobile operators launched 5G services in 2019 and as of April 2020, over 10% of mobile users are already using 5G. The Capex to GDP ratio spiked between 2012 and 2014 and started to slide downwards and growing from 2019 onwards.
Idem Est Research projects an increase in Capex spend throughout 2020 alone by installing more 5G base stations across all cities, ramping up South Korea’s 5G rollout nationwide and consolidating its 5G network leadership in terms of subscribers and availability in the country.
The South Korean three-player mobile market is a remarkably stable market, however with mobile revenue pressure, all operators are broadening their range of services from e-commerce (SK Telecom), smart home (LG Uplus) to real estate (KT) and digital payments.
Between 2014 and 2019, both SK Telecom lost revenue and EBITDA share to LG Uplus over the last six years, KT held its revenue share steady but managed to take share from the telecom market EBITDA pool.
Mobile Subscribers and Revenue
Average annual mobile revenue growth was lower (-.04%) than mobile service subscriptions growth (3.9%) during the period 2014-2019, highlighting the structural challenges faced by mobile operators. Declining voice & SMS revenue only partially offset by wireless data monetisation is putting pressure on ARPU, compounded by bundling discounts to stem churn.
IoT connections is a major growth driver for mobile operators, a slowdown in mobile subscriptions growth will put long term pressure, dialling up competition for the three mobile operators fighting for fewer new customers.
According to our benchmark study of mobile data pricing, South Korea had among the biggest cost reduction per GB over the last 3 years, while India has the lowest rate in the world with just a few cents per GB.
The South Korean mobile market rapidly transformed from a voice and SMS to a mobile Internet-dominated market. With a continued drive to convert smartphones users to digital shoppers and therefore increasing mobile operators’ consumers share of wallet. Mobile operators are increasing market segmentation and deliver innovative offerings targeting households with digital services such as music, video streaming, digital payments and bundles of other services such as home automation, IPTV and fixed broadband.
Broadband Subscribers – FTTH Push to Gigabit Speeds
After over 20 years of investments in fibre infrastructure, South Korea boasts one of the highest FTTH penetration in the world as well as one of the most advanced, consumer broadband products offering speeds up to 10Gbps. Most people use above 100Mbps packages which are mostly bundled with mobile services by the three dominant players, KT, SK Telecom and LG Uplus.
Fixed broadband penetration is forecasted to grow modestly as South Korea’s investments in full-fibre networks are now reaching maturity with affordable packages and increased broadband household penetration growing towards saturation.
Thematics – Telecoms Infrastructure / 5G / M&A / Infrastructure
Infrastructure funds, pension funds and government funds are assigning high valuation multiples to telecommunications infrastructure assets such as mobile towers, data centres, submarine cable and fibre infrastructure.
Investment funds are assigning high valuation multiples to telecommunications infrastructure assets such as mobile towers, data centres, submarine cable and fibre infrastructure. This report outlines some real market examples of how investors view and value these investments with real industry examples and EV/EBITDA comparatives and benchmarks.
Our South Korea Telecoms Industry Report transactions database analysis highlights the dearth of inbound (domestic) transactions in the South Korea telecommunications services market, with the largest transactions from SK Telcom and LG Uplus bulking up their fixed broadband and IPTV business units and consolidating their position by acquiring smaller operators. Most other transactions are expected in the data centre, IoT and cloud computing sector with SK Telcom and LG Uplus investing in e-Commerce and enterprise services.
The arrival of 4G moved the Internet off our desktops into our palms and pockets, 5G could transform the network from something we carry around to something taking us around either virtually (augmented reality or virtual reality) or in reality (autonomous vehicles), the 5G outcome and benefits beyond fast connectivity remain largely unknown in terms of business models, investments required and timeline.
KEY COMPANIES MENTIONED IN THIS SOUTH KOREA TELECOMS INDUSTRY REPORT:
CMB, D’Live, Dreamline, Hyundai CNS, KT, LG Uplus, SK Telecom
South Korea Telecoms Industry Report – Table of Contents
1 Key Statistics
1.1 South Korea Population
1.2 South Korea Households
1.3 South Korea’s GDP
2 COVID-19 Impact
3 Overall Telecommunications Market, 2014–2025
3.1 Market Overview
3.2 South Korea’s Race to Lead in 5G and Beyond
3.3 Historical Telecommunications Market Revenue, 2014-2019
3.4 Overall Telecommunications Market Forecast, 2018-2025
3.5 Telecommunications Market Capital Expenditure, 2014-2025
3.5.1 Historical Telecommunications Capex Spend, 2014-2019
3.5.2 Capex to Revenue Country Benchmark
3.5.3 Capex to GDP Benchmark
3.5.4 Telecommunications Capex Spend Forecast, 2019-2025
4 Telecommunications Operators Profile
4.1 SK Telecom Profile
4.1.1 SK Telecom Revenue and EBITDA Mix
4.2 KT Profile
4.2.1 KT Revenue and EBITDA Mix
4.3 LG Uplus Profile
4.3.1 LG Uplus Corporation Revenue and EBITDA Mix
5 Mobile Market
5.1 Mobile Subscribers Historical and Forecast, 2014-2025
5.1.1 Mobile Subscribers Historical, 2014-2019
5.1.2 Mobile Subscribers Market Share, 2014-2019
5.1.3 South Korea Smartphone Share, 2019
5.1.4 South Korea Mobile Subscribers Forecast, 2019-2025
5.2 Mobile Revenue Historical and Forecast, 2014-2025
5.2.1 Historical South Korea Mobile Service Revenue, 2014-2019
5.2.2 Mobile Service Revenue Forecast, 2018–2025
5.2.3 Mobile Subscribers ARPU, 2014-2019
5.3 Spectrum Holdings
5.3.1 Spectrum Pricing and Regulation
5.3.2 5G Development and Launches
5.3.3 Mobile Frequencies Portfolios Analysis
5.3.1 Spectrum Depth Benchmark by Country
5.4 Mobile Download Data and Pricing Trends
5.5 Mobile Speed Tests
5.5.1 Ookla Mobile Speed Tests
5.6 Internet of Things (IoT)
6 Broadband Market
6.1 Fixed Broadband Subscribers Historical, 2014-2019
6.2 Fixed Broadband Subscribers Forecast, 2018-2025
7 Telecommunications Infrastructure Investments
7.1 The Success of Korea ICT Policies
7.1.1 Government ICT Plans
7.1.2 Submarine Cables
7.2 Mobile Tower Infrastructure Landscape
7.2.1 Getting Ready for 5G
7.2.2 Tower Density Benchmark
7.3 Telco Infrastructure Comparative
8 Thematics / Opportunities
8.1 Increasing Scale – Consolidation
8.2 Growing Scope – Cross-Industry
8.2.2 Content and IPTV
8.3 New Telecoms Operating Model
8.3.1 The Attraction of Infrastructure Multiples
8.4 5G Developments
8.4.1 5G Overview
8.4.2 5G – Relative Capex Investments and Frequency Range
8.4.3 5G OpenRAN
8.4.4 Beyond 5G
9 Telco M&A Transaction Database
11 Copyright Notice
South Korea Telecoms Industry Report – List of Figures
Figure 1 – Telco sector revenue as % of GDP in South Korea
Figure 2 –Revenue Profile Historical Mix (KRW bn), 2014 – 2019
Figure 3 – Telecommunications Market Revenue Pool, 2019
Figure 4 – Telecommunications Market EBITDA Pool, 2019
Figure 5 – Telecommunications Revenue & EBITDA Share Estimates, 2019
Figure 6 – Total Telecoms Market Revenue and Growth Rate (KRW bn), 2018-2025
Figure 7 – Capex to Revenue Benchmark, 2014-2019
Figure 8 – Capex to GDP Ratio Benchmark, 2014-2019
Figure 9 – Telecommunications Capital Expenditure Spend, 2000-2025
Figure 10 – SK Telecom Service Revenue Mix, 2014-2019
Figure 11 – SK Telecom Historical Revenue Mix, 2014 – 2019 (KRW bn)
Figure 12 – KT Revenue Mix, 2014-2019
Figure 13 – KT Historical Revenue Mix, 2014 – 2019 (KRW m)
Figure 14 – LG Uplus Service Revenue Mix, 2014-2019
Figure 15 – LG Uplus Historical Revenue Mix, 2014 – 2019 (KRW bn)
Figure 16 – Mobile Subscribers Share Comparison, 2014-2019
Figure 17 – Mobile Subscriber Share Comparison, 2014-2019
Figure 18 – Mobile Net Adds (000’s) Comparison, 2015-2019
Figure 19 – Mobile Subscribers Forecast, 2014-2025
Figure 20 – Mobile Service Revenue Forecast (KRW bn), 2018-2025
Figure 21 – Mobile Subscribers ARPU (KRW), 2014-2025
Figure 22 – Mobile Frequencies by Operators and by Band (MHz)
Figure 23 – Subscriptions per MHz of Spectrum, Select Asia-Pacific Countries, 2019
Figure 24 – Mobile Handsets Monthly Download Data, 2017-2019
Figure 25 – Data Pricing Trends in Asia-Pacific (US$ per GB per month), 2017-2019
Figure 26 – Ookla Mobile Speedtest Speed and Ranking Comparison
Figure 27 – Spectrum available and IoT Landscape in South Korea
Figure 28 – Broadband Subscribers Share Comparison, 2014-2019
Figure 29 – South Korea Net-Adds (000’s) by Operators, 2015-2019
Figure 30 – Broadband Subscribers Forecast, 2018-2025
Figure 31 – Development History of ICT in Korea
Figure 32 – Estimated Tower Market Share, 2019
Figure 33 – Subscribers per Tower, 2019
Figure 34 – Telecoms Providers EV/EBITDA Ranges
Figure 35 – 5G Network Slices Structure
Figure 36 – Effect of Frequency on Range
Figure 37 – 5G Capacity and Coverage Layers
Figure 38 – Relative Capex Required for 5G Network Infrastructure Investment
Figure 39 – Telecom Infra Project – OpenRAN Vision
South Korea Telecoms Industry Report – List of Tables
Table 1 – South Korea – Key Statistics
Table 2 – Telecommunications Market Revenue by Operators, 2014-2019
Table 3 – Total Telecommunications Market Revenue, 2018-2025
Table 4 – Historical Telecommunications Capex Spend, 2014-2019
Table 5 – Total Telecommunications Capex Investments Forecast, 2018-2025
Table 6 – Historical SK Telecom Revenue, EBITDA and Capex, 2014-2019
Table 7 – Historical KT Revenue and EBITDA Mix, 2014-2019
Table 8 – Historical LG Uplus Revenue and EBITDA Mix, 2014-2019
Table 9 – Historical Mobile Subscribers, 2014-2019
Table 10 – South Korea Mobile Subscribers Forecast, 2018-2025
Table 11 – Historical Mobile Service Revenue, 2014-2019
Table 12 – Mobile Service Revenue Forecast, 2018-2025
Table 13 – Historical Mobile Market Blended Mobile ARPU, 2014-2019
Table 14 – Spectrum Holdings by Operators and by Bands (MHz)
Table 15 – Historical Broadband Subscribers by Service Providers and by Technology, 2014-2019
Table 16 – South Broadband Subscribers Forecast, 2018-2025
Table 17 – International Submarine Cable Systems with Landing Stations in South Korea
Table 18 – SK Telecom, KT, LG Uplus Infrastructure Landscape
Table 19 – Technology Specifications (ADSL, FTTN, Fibre, 4G/LTE, 4G/LTE-A and 5G)
Table 20 – Telco Transaction Database, 2008-2020
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