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Competition in Korean mobile telecommunications market: business strategy and regulatory environment

Author

Listed:
  • Choi, Seon-Kyou
  • Lee, Myeong-Ho
  • Chung, Gyu-Hwa

Abstract

After the launch of PCS in 1997, the Korean mobile telephony market achieved a remarkable subscriber base growth. The market is composed of a differentiation advantage seeker, SK Telecom; a cost advantage seeker, LG Telecom; and three other carriers: Hansol PCS, Korea Telecom Freetel, and Shunsegi Telecom that do not show clear adherence to any type of advantage. Despite large growth in subscribers, price competition has not occurred after the competition except in handset subsidies. New restrictions on handset subsidies, closing the only door for price competition, favored a differentiation seeker at the expense of a cost advantage seeker. The Ministry of Information and Communication's provisional plan for quality evaluation without price deregulation runs the risk of quality over-provision that is sub-optimal, and may further distort the business performance of carriers. Overall complete deregulation is necessary, in order to enhance the competitiveness of the Korean mobile telephony industry and to increase consumer welfare.

Suggested Citation

  • Choi, Seon-Kyou & Lee, Myeong-Ho & Chung, Gyu-Hwa, 2001. "Competition in Korean mobile telecommunications market: business strategy and regulatory environment," Telecommunications Policy, Elsevier, vol. 25(1-2), pages 125-138, February.
    • Handle: RePEc:eee:telpol:v:25:y:2001:i:1-2:p:125-138
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    Citations

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    Cited by:

    1. Tommaso Valletti, 2003. "Is Mobile Telephony a Natural Oligopoly?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 22(1), pages 47-65, February.
    2. Nicolle, Ambre, 2016. "Are consumers myopic? Evidence from handset and mobile services choices," 27th European Regional ITS Conference, Cambridge (UK) 2016 148693, International Telecommunications Society (ITS).
    3. Kim, Hee-Su & Kwon, Namhoon, 2003. "The advantage of network size in acquiring new subscribers: a conditional logit analysis of the Korean mobile telephony market," Information Economics and Policy, Elsevier, vol. 15(1), pages 17-33, March.
    4. Quach, Sara & Thaichon, Park & Hewege, Chandana, 2020. "Triadic relationship between customers, service providers and government in a highly regulated industry," Journal of Retailing and Consumer Services, Elsevier, vol. 55(C).
    5. Roberto Capasso & Maria Clelia Zurlo & Andrew P. Smith, 2018. "Stress in Factory Workers in Italy," Psychology and Developing Societies, , vol. 30(2), pages 199-233, September.
    6. Keesookpun, Chutipong & Mitomo, Hitoshi, 2013. "The determinants of mobile operator switching and policy implications in developing countries: A case study of Thailand," 24th European Regional ITS Conference, Florence 2013 88472, International Telecommunications Society (ITS).
    7. Whang, Yun-kyung & Hobday, Michael, 2011. "Local 'Test Bed' Market Demand in the Transition to Leadership: The Case of the Korean Mobile Handset Industry," World Development, Elsevier, vol. 39(8), pages 1358-1371, August.

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