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Internet in Korea: Current Status and Trend

Internet in Korea: Current Status and Trend. S. H. Kyong Graduate School of Management Korea Advanced Institute of Science and Technology Seoul, Korea. Message. Well-developed Physical Infrastructure Liberal and Competitive Telecommunications Market Informed, Eager and Sophisticated Users

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Internet in Korea: Current Status and Trend

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  1. Internet in Korea:Current Status and Trend S. H. Kyong Graduate School of Management Korea Advanced Institute of Science and Technology Seoul, Korea

  2. Message • Well-developed Physical Infrastructure • Liberal and Competitive Telecommunications Market • Informed, Eager and Sophisticated Users • Conducive Social, Economic and Political Environment Need: for Realization of Full Potential of the Internet. Asian Internet Wave

  3. Contents • Development of Internet Environment • Indicators of Internet Penetration and Usage • Profile of Internet Users • Profile of Internet Usage • Laws, Regulation and Charge System • Impact on the Economy and Industrial Structure • IT and Internet in Education • State of e-Government Asian Internet Wave

  4. Telecommunications Services • Number of Subscribers (Mar., 2001) Fixed Line Services 22,089,532 Wireless Services 27,203,012 Mobile Phones 26,555,393 Radio Paging 444,433 Trunked Radio 129,849 Wireless Data 73,337 Total 49,292,544 Source: Ministry of Information and Communication (MIC) Asian Internet Wave

  5. Facilities-Based Services Providers • Number of Services Providers* (Mar., 2001) Fixed-line - Local 2 Domestic Long Distance 3 International 3 Leased Line - Domestic 10 International 11 Wireless - Cellular Telephony 2 PCS 3 GMPCS 2 Trunked Radio 7 Radio Paging 9 Wireless Data 3 B-WLL 1 *Repeated counting of providers with multiple services. Source: MIC Asian Internet Wave

  6. Information Superhighway (1) • 1st Stage (1995~1997) • Optical Network in 80 Urban Centers • ATM Testbed Exchange Network • 2nd Stage (1998~2000) • Nationwide Service of ATM Network (July, 2000) • Nationwide Optical Network (Dec., 2000; 155 Mbps ~ 5 Gbps) • 3rd Stage (2002~): Plan being finalized <The Status of Infrastructure Implementation> Asian Internet Wave

  7. 철원 속초 화천 양구 양양 연천 인제 포천 파주 춘천 강릉 가평 의정부 고양 홍천 김포 구리 양평 서울 횡성 동해 정선 인천 평창 원주 울릉 광주 삼척 안양 성남 여주 영월 태백 이천 안산 수원 제천 충주 울진 화성 단양 용인 봉화 음성 평택 영주 괴산 안성 진천 당진 천안 아산 예천 안동 서산 영양 문경 청주 예산 연기 보은 홍성 상주 공주 청송 영덕 의성 청양 보령 군위 대전 부여 옥천 영동 서천 논산 구미 왜관 금산 익산 김천 영천 포항 대구 성주 군산 무주 경주 진안 전주 김제 거창 고령 청도 장수 울산 부안 임실 합천 함양 밀양 양산 창녕 정읍 산청 남원 순창 고창 담양 함안 김해 의령 마산 곡성 장성 부산 영광 구례 진주 진해 광주 함평 광양 사천 하동 고성 무안 나주 화순 순천 통영 거제 남해 여수 목포 영암 보성 고흥 장흥 강진 진도 해남 완도 성산 ○ 포 제주 Information Superhighway (2) 범 례 (12) Node 622M - 5Gbps Asian Internet Wave 155M - 622Mbps Access Point(132)

  8. Internet eXchanges (1) • Four Major IXs : KIX, KT-IX, DACOM-IX, KINX < State of Internet eXchanges (Dec., 2000) > Asian Internet Wave

  9. Located at NCA ISPs ISPs Non-Commercial Networks LAN (GBE) KIX KINX 200 Mbps 245 Mbps KT-IX DACOM-IX STM-16*n STM-1*n ISPs Internet eXchanges (2) <Internet eXchange Connectivity> Asian Internet Wave

  10. (Overseas) KT-Sprint DACOM-IX KINX PUBNet-Ⅰ PUBNet-Ⅱ (ATM Network) PUBNet (Educational Inst.) KREN (Research Inst.) HPCNet KT-IX (Network Research) KOREN (Overseas) Dacom (Satellite Overseas) KT-Teleglobe (Government) KOSINet 45M 45M 45M 155M 45M 155M 200M KIX 45M*2 200M 155M 155M 1G 155M 155M*2 155M*3 45M Internet Backbone Network < KIX Network > * PUBNets connect “Public Sector Information Superhighway” Asian Internet Wave

  11. Access Network (1) • Fixed Line Internet Access • Dial-Up and ISDN • Dial-Up (56 Kbps Modem) : Mainly used for PC communication • ISDN (64 Kbps ~ 128 Kbps): Decreasing due to ADSL, Cable Modem < Number of ISDN Subscribers > < Number of PC Communication Subscribers > 2001. 3. 4,166,057 3,684,418 1,867,455 3,775,958 2,259,333 --- 15,753,221 Source : MIC

  12. Access Network (2) • High-Speed Internet Access • Cable Modem: 10 Mbps • ADSL : Downstream (1.5 ~ 8 Mbps); Upstream (16 ~ 640 Kbps) < High-Speed Access Service Subscribers (Mar., 2001) > B-WLL 831 16,564 17,395 Total 2,424,119 1,281,752 900,754 170,919 43,076 112,631 153,458 5,086,709 Source : MIC Asian Internet Wave

  13. WAP/ME ISMS Total 9,922 100% 8,601 100% SK Telecom Shinsegi Tel. KT Freetel KT M.Com LG Telecom 2,866 950 2,816 1,338 1,952 28.8% 9.6% 28.4% 13.5% 19.7% 3,045 --- 2,464 1,565 1,527 35.4% --- 28.6% 18.2% 17.8% Access Network (3) • Wireless Internet Subscribers (Mar., 2001): 18,523,000 (Unit: 1,000 subscribers) Source : MIC Asian Internet Wave

  14. Access Network (4) • Services by Major Mobile Access Providers (Mar., 2001) < WAP/ME Services; Total and Internet Subscribers; Market Shares > Phone.com/Ericsson Source : MIC Asian Internet Wave

  15. Access Network (5) • Status of CDMA2000-1X Service Offerings Service Start Service Area Speed Charge 2001. 4. 23. 6 Large Cities (81 Cities from July) SK Telecom Shinsegi KTF* LG Telecom Text: 6.5 Won Multimedia: 2.5 Won (per 512 byte packet) 2001. 5. 2. Seoul Area 144 Kbps Daejon 2001. 5. 1. 97 Urban Areas * Merger of KT Freetel and KT M.Com Source: Korea Economic Daily (May 2, 2001) Asian Internet Wave

  16. Service Start Speed Path Korea Telecom 1999. 5. 3 Mbps Korea Satellite No. 1 Samsung SDS 1996 400 Kbps Korea Satellite No. 2 GCT Korea 2000. 10. 2 Mbps Korea Satellite No. 3 Future Online 2000. 9. 2 Mbps Korea Satellite No. 3 Access Network (6) • Satellite Internet Access(Oct., 2000) Source : MIC Asian Internet Wave

  17. Access Network (7) <Per Cent Households with Broadband Access* (netvalue.com, April 2, 2001)> Korea U.S. 11.157.3 Hong Kong 8.1 Singapore 7.1 Taiwan 6.2 France 6.0 Denmark 5.8 Germany 5.0 Spain 3.1 U.K. 3.1 China 0.4 0 10 20 30 40 50 60 * (3-Month Averages: Dec/Jan/Feb) Asian Internet Wave

  18. Access Network (8) <Breakdown of Broadband Connections* (netvalue.com, April 2, 2001)> Cable (%) Satellite (%) ADSL (%) T1 (%) Total (%) Korea 18.6 0.1 38.6 0 57.3 U.S. 7.6 0.5 2.8 0.2 11.1 Hong Kong 6.0 0.9 1.2 0 8.1 Singapore 6.6 n/a 0.5 0 7.1 Taiwan 3.5 0.1 2.6 0 6.2 France 4.0 0.3 1.7 0 6.0 Denmark 3.4 0.0 2.4 0 5.8 Germany 2.7 0.1 2.2 0 5.0 Spain 1.8 0.2 1.1 0 3.1 U.K. 2.3 0.3 0.5 0 3.1 China 0.2 n/a 0.2 0 0.4 * (3-Month Average: Dec/Jan/Feb) Asian Internet Wave

  19. Internet Security (1) • Information Security Measures • “Computer Emergency Response Team” established within Korea Information Security Agency (KISA) against hacking and virus attacks (April, 2000) <Reported Cases of Hacking and Virus Attacks> Source: KISA • “Safety and Reliability Standards” established as requirements for Internet Data Center (IDC) operations (June, 2000) Asian Internet Wave

  20. Internet Security (2) • Electronic Signature Authentication • “Electronic Signature Act” promulgated in July, 1999 • Four Authentication Agencies authorized • Personal Information Protection • “Personal Information Protection Guidelines” (June, 2000) • “Cyber Privacy Center”, “Anti-Intrusion Consultation and Assistance Center” Established in KISA (June, 2000) • “Internet Site Safety Mark” (Sept., 2000) Asian Internet Wave

  21. 1998 1999 2000 2001. 3. .kr Domains 26,166 207,023 517,354 489,847 IP Addresses 5,027,840 7,256,064 18,921,984 20,494,848 ISPs 25 54 83 88 Internet Users 3,103,000 10,860,000 19,040,000 20,930,000 Indicators of Internet Penetration and Usage • Key Indicators • ASPs • Continuing Growth with Increasing Trend of Outsourcing: = Market Estimates: 2000 (￦ 58 billion); 2001 (￦ 96 billion) • IDCs (Internet Data Centers): = 1999: 2 Centers; 2000: 20 Centers Source: Korea Network Information Center (KRNIC) Asian Internet Wave

  22. Profile of Internet Users (1) • Number of Internet Users • Users by Type of Access Source : MIC Source : MIC Asian Internet Wave

  23. Profile of Internet Users (2) • Wireless Internet Users by Profession (Dec., 2000) Profession Per Cent Student 24.0 Employed 28.0 Professional 6.5 Self-Employed 8.5 Other 33.0 Source: Korea Information Society Development Institute (KISDI) Asian Internet Wave

  24. Profile of Internet Users (3) • Internet Users out of Total Population by Gender Source : KRNIC • Internet Users out of Total Population by Age Source : KRNIC Asian Internet Wave

  25. Profile of Internet Usage (1) • e-Commerce (Unit : Million Won) * Estimate Source : KISDI Asian Internet Wave

  26. Profile of Internet Usage (2) • Internet Banking (Unit : 1,000 cases; 100 Million Won) 2000. 3.* 2000. 6.* 2000. 9.* 2000.12.* 2001. 3.* Cases Amount Cases Amount Cases Amount Cases Amount Cases Amount Inquiry 3,809 -- 9,937 -- 16,670 -- 31,861 -- 36,668 -- Fund Transfer 1,005 97,674 2,504 182,416 2,700 300,834 4,731 835,105 7,680 788,278 Loan Application 21 1,769 83 7,188 97 9,277 103 9,295 193 15,214 Total 4,835 12,524 19,467 36,695 44,541 * Transaction cases and amount during the month indicated. Source: Bank of Korea Asian Internet Wave

  27. Profile of Internet Usage (3) • Internet Banking (Cont’d) <Growth of Internet Banking Users (Bank of Korea, April 23, 2001)> 2001. 3. 5,290,000 2000.12. 4,090,000 2000.06. 123,000 1999.12. 12,000 Asian Internet Wave

  28. Profile of Internet Usage (4) • Internet Market • Internet Advertising Source : Samsung Economic Research Institute • Internet Game * Estimate Source : Korea Entertainment System Industry Association (Unit : 100 Million Won) (Unit : 100 Million Won) Asian Internet Wave

  29. Profile of Internet Usage (5) • Internet Plazas • Number of Internet Plazas : 15,150 (1999), 19,772 (2000.7.) • Fee: 1,000 won ∼ 2,000 won per Hour • Usage : game (76.4 %), chatting (16.1 %), content retrieval (11.5%),WP (1.8 %), other (1 %) <Internet Plaza Market > (Unit : 100 Million Won) * Estimate Source: KISDI Asian Internet Wave

  30. Profile of Internet Usage (6) • Internet Stock Trading • Rapid Growth of Online Stock Transactions • 94% of Online Transactions by Internet • 1998 (10%); 1999 (24.5%); 2000 (55.7%) • Internet Phone • More than 15 Internet Phone Service Providers • Serome Technology (Dialpad), Thrunet (Thruphone), etc. Asian Internet Wave

  31. Laws and Regulation Related to the Internet (1) • Major Legislations Related to the Internet Asian Internet Wave

  32. Laws and Regulation Related to the Internet (2) • Legislative and Regulatory Agenda for 2001 • e-Government Implementation • Law on establishment of e-government • Regulation on disclosure of electronic information • Internet Business Promotion • Law on use of e-money • Revision of tax laws to promote e-commerce • Human Resources Development • Revision of Industrial Training Promotion Law • IT and Internet education of civil servants • e-Democracy Implementation • Revision of Election Law • Revision of National Assembly Law • Side Effects of Informatization • Law on protection of IT Infrastructure • Law on use of encryption Asian Internet Wave

  33. Charge System (1) • High-Speed Access Service Charges (Unit : Won) Source: MIC Asian Internet Wave

  34. Charge System (2) • PC Communication Charges * ”Internet PC” refers to low-priced PCs available under government promotion program. (Unit: Won) Source: MIC Asian Internet Wave

  35. Impact on the Economy and Industrial Structure (1) • Information-Communication Industry Leads Economic Growth • In 2000: GDP Growth, 9 %; IT Industry Growth, 30 ~ 40 % • Portion of IT Industry in GDP: 7.7 % in 1997; 16.1 % in 2000 • Internet Ventures • Over 10,000 Venture Companies Established between 1998 and 2000 • “Internet Venture Valleys” - Teheran Valley (2,133 Cos.), Kuro Digital Center (144 Cos.), etc. • Growing Foreign Investment in Internet Ventures • 1999.9. (US$146 million), 2000.9. (US$616 million) • M&As in IT Industry • 1999 (65 cases) → 2000 (256 cases) Asian Internet Wave

  36. Impact on the Economy and Industrial Structure (2) • Information Superhighway and High-Speed Internet Access Stimulate Growth of Digital Contents Market - Education, Game, Portal, Internet Broadcasting, etc. • Computerization of Government Purchasing Stimulates Growth of B2B Market • Rapid Growth of Internet Shopping < Growth of Internet Shopping > Source: National Computerization Agency (NCA) Asian Internet Wave

  37. Impact on the Economy and Industrial Structure (3) • Internet Industry • Infrastructure Industry : 31 % Increase 2000 ~ 2001 • Internet Usage Industry : 77 % Increase 2000 ~ 2001 < Internet Industry Market > (Unit: Million Won) Source: KISDI

  38. Impact on the Economy and Industrial Structure (4) • Growing Market Share of Imported Equipment • ADSL 2000 1Q 2001 Samsung Electronics 26% Cisco 18% Samsung Electronics 33% Nortel 32% Lucent 13% % % Alcatel 19% Nortel 12% Hyundai Electronics 23% Cisco 23% Alcatel 1% Source: Korea Economic Daily (April 10, 2001) Asian Internet Wave

  39. Impact on the Economy and Industrial Structure (5) • Growing Market Share of Imported Equipment (Cont’d) • Servers (Jan.~Sept., 2000) • Storage Devices (1999) IBM 29.9% EMC 32% Sun Micro 25.4% IBM 20% HP 16.1% Hitachi 11% Compaq 11.4% Compaq 10% Other 17.2% HP 9% Other 18% Source: Korea Economic Daily (April 10, 2001) Asian Internet Wave

  40. 1995 1996 1997 1998 1999 Total Number of Patent Applications 138,361 159,143 138,545 104,092 111,289 Number of Internet-Related Applications 3,370 (2.4 %) 3,612 (2.2 %) 4,678 (3.73 %) 3,928 (3.77 %) 3,411 (3.07 %) Organization Category Organization R&D ETRI Contents · DB KISTI Application Service NCA Address KRNIC Policy · Strategy KISDI Network KT Information Protection KISA Business Internet Industry Association Impact on the Economy and Industrial Structure (6) • Internet Related Patents Source : Korea Industrial Property Office • Internet R&D • “Next Generation Internet” Joint Project (1999 --) Asian Internet Wave

  41. Technology Area Specific Technologies Network Technology High speed switching and transmission technology High-speed IP switching, next generation router, IPoWDM technology, etc. High performance networking technology Policy-based network resource management, next generation Internet protocol, network management technology, etc. Application and Service Technology Advanced network service technology Directory service, multimedia/multisession, VPN platform technology, etc. Advanced applications technology Virtual reality, multicast, mobile Internet, network security, data integration, next generation service operation technology, etc. Testbed Development and operation of testbeds Impact on the Economy and Industrial Structure (7) • Focus of “Next Generation Internet” R&D • Standardization • “Forum for e-Commerce Standardization” Launched (June, 2000) • - Standardization of e-Commerce, e-Payment, e-Document, e-Catalog, etc. Asian Internet Wave

  42. IT and Internet in Education • IT and Internet Access to All Schools • Internet Access Available at All Elementary and Secondary Schools (Dec., 2000) - 10,482 schools (more than 256 Kbps) - Provided 1 PC for 1 teacher and 1 classroom * Students : 433,500 PCs, Teachers : 236,000 PCs • Curriculum Requiring Minimum of 10% Use of ICT in Each Subject (Jan., 2001) • Information Ability Certification Program (2000) • EduNet Service: Supports ICT-based e-Learning at Elementary and Secondary Schools for Students, Teachers and Parents < Status of EduNet Users (Dec., 2000) > Source: Korea Education and Research Information Service (KERIS) Asian Internet Wave

  43. State of e-Government (1) • 1987~1996: 1st and 2nd NAIS Project • “National Administrative Information System” - Computerization of citizen services such as registry of residency, automobile and land ownership, etc. • 1997~Present: e-Government Implementation • Development of Master Plan for e-Government - “Cyber Korea 21”, “Action Plan for e-Government” • Information Highway Construction and Access Speed-Up • Public Site Homepage, Electronic Approval System • CIO Appointment in Each Government Agency • Computerization of Central and Local Governments’ Core Tasks - Taxation, Government Purchases, One-Stop Citizen Services, etc. • Alighnment of Laws and Regulations for e-Government - Basic Act on Promotion of Informatization, Act on e-Commerce, Act on Digital Signature, etc. Asian Internet Wave

  44. State of e-Government (2) • “e-Government Vision” • Provide Best Citizen Service for People • Provide Most Favorable Business Environment • Maximize Productivity, Transparency, Democracy of Government • Current State of e-Government • Presidential Commission on e-Government (Jan., 2001) • Under purview of the President (members: public officials and private citizens) • Established the principles and directions for e-Government * Complete “Core Tasks” for e-Government by 2002 • Complete Enacting Essential Laws on e-Government (2001) • Core Tasks • e-Administration; e-Commerce; Information Sharing between Central and Local Governments; Education, Health, and Welfare Systems; Placement of Full Infrastructure for Effective e-Government, etc. Asian Internet Wave

  45. Conclusion • Well-developed Physical Infrastructure • Liberal and Competitive Telecommunications Market • Informed, Eager and Sophisticated Users Internet is Superficially Thriving in Korea: But, Need More Conducive Environment to Realize the Full Potential of the Internet for Social, Economic and Political Advancement. Asian Internet Wave

  46. Thank you. Asian Internet Wave

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