Research Notes

WAP has been a huge success in Korea

– in stark contrast to Europe.
What made the difference?
While most European mobile operators preferably don’t even mention the word WAP any more, WAP has grown to be a huge success in Korea – as described in Strand Consults latest report “The Korean Mobile Market, a window to 3G”.

During the past year, mobile Internet revenue in Korea has overtaken overpriced SMS services revenue and is still climbing. However the revenue from overpriced SMS’s is still rising, even though it was overtaken by WAP based mobile services at the end of 2001. In other words, the Koreans have opened up a new market of WAP based mobile services – that they are now earning more on than their original overpriced SMS services – which they still also are making money on!

To understand why the Koreans are currently enjoying some of the best mobile success stories in the world, one has to look at the vastly different strategies that the Korean mobile operators and their European counterparts have implemented.

Lets start with the European mobile operators. There were two main factors that helped WAP become the biggest mobile failure in Europe to date.

The first was the marketing of WAP. The industry was marketing a product that had no mobile services for the users to use and calling it the “Mobile Internet”. That would be roughly the same as marketing a car with the slogan “Go Anywhere” in a country with no roads!

The second factor was the lack of content. The only reason there was no content is that the European mobile operators did not think it necessary to offer content providers and service creators any kind of revenue sharing models at all. There are still no revenue sharing models today for WAP in Europe, so even though the penetration of WAP terminals in Europe is now very high, nobody actually uses WAP because there still is absolutely no content. Whether the above was the actual strategy of the mobile operators – or simply the lack of a strategy – will probably never be disclosed…!

In Korea, the mobile operators have had a completely different approach. Korea is 2 or 3 years ahead of the European mobile market, with over 9 million 2.5G mobile subscribers using high speed (80 Kb), WAP, Java and “MMS” enabled mobile telephones – 5 million of those users also have a colour screen. WAP is an essential part of a 2.5G network – without WAP, most services, asides from SMS, simply will not work.

Having implemented their new 2.5G mobile networks in 1999/2000, the Korean mobile operators needed their mobile subscribers to buy the new 2.5G WAP mobile phones that would start earning revenue on the new networks. Irregardless of the dismal failure of WAP in Europe, the Korean operators strategy was to partner up with media companies, content owners and content creators and create massive amounts of content and services for the new generation of mobile phones – thereby creating a demand not only for the actual 2.5G mobile phones, but also the content available on the new phones.

The results are astounding – and for now – still unknown to many European operators. In just over 1 year the Korean mobile operators have – amongst others – achieved the following results:

-25% of the mobile customers have bought 2.5G mobile phones
-Over 9 million 2.5G users in Korea today – 5 million with colour terminals
-A 2G customer spends 1.9 Euro, a 2.5G customer 4.6 Euro and a 2.5G customer with a colour screen 7.6 Euro on wireless internet pr. month
-MOU (minutes of use) has risen 15%
-The new mobile phones were all sold without any subsidisation

Strand Consults new report “The Korean Mobile Market, a window to 3G” gives a detailed description of what an actual “3G” mobile market looks like – which services are popular, what strategy- business- and revenue models the operators have based their success on and how the content owners, media companies and service creators have faired as they entered the mobile services market of the future.

Strand Consult has spent almost 9 months analysing the worlds most advanced mobile market, met with all the players in the mobile value chain and been honoured to have access to information not previously disclosed. We describe what the future European mobile market could like for real in 2 or 3 years, if the European mobile operators learn from Korea. With key figures and information we give a detailed description of the Korean mobile market with over 30 million mobile customers – of which 9 million are “3G” users.
More information on the report

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