The Seoul government’s clearly articulated vision for modernising the country’s infrastructure stands in stark contrast to the regulatory morass that has stunted development in US telecommunications for several decades. South Korea’s policy — the cornerstone of a national technology initiative to help revive a devastated economy — has created true broadband competition, which in turn has helped prices fall and speeds rise.
Although its economy is still struggling, South Korea has made significant progress with many forms of digital technology. Citizens can get “video on demand” online, often even with high-definition video, for less than Americans pay to rent a DVD. Low-income students use high-speed Net connections to take free tutorials for the national aptitude test, an exam that can determine college admissions and future job paths.
Online gaming is a massive cultural phenomenon, with three TV channels dedicated to the subject and good players attaining the fame of American sports stars. In addition, South Koreans spent more than US$1.6 billion shopping online in the first quarter of 2004, or about twice as much per capita as US residents .
“The vision of a broadband society is already here in Korea,” said Eric Kim, executive vice president of global marketing operations at Samsung Electronics. “We are two to three years ahead in wireless broadband, and people are using it, too.”
Cumulative revenue from online content has similarly exploded. Companies that provide online games and services like the Cyworld blogging site have penetrated all segments of society and become a national obsession. Corporate executives chronicle their daily lives through blogs.
“The usage model is critical,” said MC Kim, general manager for Intel Korea. “Online gaming is one of the killer apps.”
In many ways, the most important question answered in the country’s grand broadband experiment has been one of demand. Broadband progress has long been delayed in the United States and other countries as a result of uncertainty about how much interest consumers would have in paying for the expensive infrastructure needed for high-bandwidth services.
As a result, entire industries have been paralysed for years by a classic Catch-22, as content companies and network carriers waited for one another to make the first move before investing in broadband products. Telecommunications start-ups tried to break that stalemate in the 1990s by investing large sums to offer rival high-speed connections to customers, only to be gutted in the dot-com bust.
What South Korea showed is that, if you build it, they will definitely come.
India needs a similarly aggressive approach to broadband.