Blog Post

How South Korea got its Broadband Mojo

Every so often a pundit or a journalist rediscovers South Korea and presents it as a broadband nirvana. And it is! Still, not many try and write about how South Korea became center of the broadband world. No mention of South Korean government’s generous subsidies or its not so gentle nudge that forced incumbents out of its slumber. Its a case study on why governments need to get actively involved in the broadband rollout. In comparison we have a murky situation in the US, where incumbents are playing wait and see game. The municipal broadband is still being stopped in its tracks. San Francisco Chronicle goes to Seoul and brings back a very complete picture of how broadband has changed South Korea. The rollout of broadband has made some high-speed services possible and thus has fostered new innovation and new start-ups, especially in online gaming and entertainment space in South Korea.

Even American companies are finding that if they want to innovate, their early market is going to be Korea. Microsoft has done well with its MSN Mobile, and so have others. But this doesn’t mean that Koreans are happy buying other people’s technology. They are now working hard to take control of their broadband destiny. WiBro, the fixed wireless standard is a way to keep out American tech giants, and help grow local technology business. Koreans believe that the next generation WiBro networks – three of them – will help “raise Korean gross domestic product to $20,000 per capita from $12,600 in 2003, the latest available figure. In the United States, GDP per capita was $40,000 in 2004.”

This has long term ramifications for Silicon Valley. For the longest time SV has been home to the latest and greatest technology, mostly because US was a nation that “early adopted” technology. With marginal broadband in US, most innovators still cannot comprehend and start companies based on a near ubiquitous broadband experience. Slowly, it is going to start eroding American competitiveness in one of three industries which are still big export dollar generators. (Fast Food and Hollywood being the other two!) South Koreans want to become players in global markets, and are going to leverage their domestic knowledge worldwide. (Remember we used to do that in US.) Chinese want to do precisely the same. These are new reality of post-broadband world. (As an aside, I must mention that the challenges of wiring up a country the size of US are many.)

7 Responses to “How South Korea got its Broadband Mojo”

  1. laurent i agree with the limitation sof xDSL, but you have to see them in light of the specific geographies. in certain nations which are dense, small and have never copper loops, actually copper – xDSL is a good option for next ten years at the very least. it is a disaster waiting to happen in the older loops and widespread countries like US and China.

  2. Laurent Perche

    Great piece though I tend to believe one key angle is missing here. Yes Korea did build a Broadband Nirvana but its a xDSL Heaven which carries technical limitations. Japan was slower than Korea to adopt xDSL therefore decided to leapfrog and go straight for FTTx which might in a very near future create an interesting situation and move Broadband heaven to Japan leaving Korea struggling with getting Wibro a sound future.

  3. Om:

    Very interesting post and one that hits on some of the social factors as well as the active government role in the success of broadband and mobile technologies in Korea. Having lived there and having worked with the Korean government in the past as well as interacting with the tech industry there, there’s no doubt that Korea wants to be a global player in Broadband, Mobile, and Multimedia. SK’s recent move here (with Earthlink) is a good indication. I think the other factor that will help Korean companies is their relatively strong affinity with Chinese culture, which should give Korean companies a relative edge over Japan, their biggest competitor in the region in addition to the other Western competitors. Should be an interesting decade for Korea to see if they can indeed become global. In addition, there are MANY, MANY innovations in Korea that we could learn from, although, the applicability of those innovations makes sense in the same way here is another story.

  4. The point Mr.Om is that once the governments decide to act in nations interest, a lot can be achieved. The same experiment can be replicated in India if the policy makers decide not to persist with moth eaten ideas.