KT-NTT Venture Forum

Announced last May, the first KT-NTT Venture Forum took place yesterday in Palo Alto, CA.

What's in a name ? This is a forum, it features Venture issues, and is led by KT and NTT, the fixed counterparts to KTF and NTT DoCoMo, whose partnership has been already blooming for a while. The brand KT appears first in this new venture, but NTT is a much bigger player.

What's in a location ? Initially planned to host the premiere, Seoul will organize the next round this September. How "neutral" can the Sillicon Valley be ? Both NTT America, Inc. (nttamerica.com) and NTT DoCoMo USA, Inc. (docomo-usa.com) are based in NYC, while KT America's HQ are in L.A. (ktamerica.com). But Palo Alto is home to DoCoMo Communications Laboratories USA, Inc. (docomolabs-usa.com), and NTT serves customers in the US far beyond the national expat community (ie Verio).

What's in a program ? 12 start-ups showed up and off at the Four Seasons Hotel Silicon Valley. 76 avid investors (VCs, Qualcomm, Sony, Samsung, Cisco, Intel & co) attended speeches by CTOs CHOI Doo-wan and Noritaka UJI. Each operator came with staff from 15 BUs. This was obviously meant to go beyond name-card trading and to let the Sillicon Valley take notice : we may not be the new sheriff in town, but we are no small fish either. And we are willing to invest, to make new things happen.

A few days earlier, SK Telecom confirmed the sale of Helio to Virgin*. To go to Hollywood from Palo Alto, you do have to go South...

Both Korean heavyweights are intensifying the competition at home, where KT and KTF will unite and where SKT purchases his way into the home broadband market. The former PTT is becoming more customer oriented and considering bundles (broadband at home with Megapass, IPTV with MegaTV, VoIP with KT, broadband on the go with KT Wibro...).

On the mobile turf, there seems to be a cultural shift these days :

- KTF found its mojo and developped a taste for marketing entertainment**.
- SKT keeps the overall lead (50%+ market share), but seems to be losing some of its cool factor. It is lagging behind his rival in the WCDMA frenzy : 27.4% of the market have been converted at the end of June 2008 and despite a better month by SKT, KTF holds 51.1% of these 12.3M subs.

SHOW succeeded the old SKT way : massive advertising, devoted shops, an aura of fun and buzz. "T" did enjoy the same treatment but with a rather "Deutsche Telecom" flavor : somehow less fun and less buzz. Actually, this zero-affect-non-brand sounds too techno-oriented and not very sexy, while the Show brand is clearly a hit : just compare "show-time" with "T-time" and it jumps at your face.

The leader is putting all its weight on the new USIM-based solutions (that's "T" and "USIM", not a new brand) including contactless payments. The loyalty strategy lies at the core of mobility, in a tiny little fortress of technology, at the very moment the competitor is embracing a more pervasive kind of ambition.


* see "Helio lands on Virgin island" (20080509)
** ditto Voda : Vodafone Music Reporter is to rock and roll with MySpace

IPTV in Korea

A 100 Mbps connection, a brand new Homevita home networking service including a complimentary Samsung Q1 Ultra (slick, black, DMB enabled, lovely keyboard). And all I can get is VOD channels. The closest thing to live TV I get is through classic web browsing or through CCTV (most exciting Reality TV program : who paid me a visit the last few days ?).

Forget about real time broadcasting : the Ministry of Information and Communication is in favor of it but the Korea Broadcasting Commission lobbied against it. The freshest news, sports or series you can get must be at least 24h old. And provided your IPTV service reached an agreement with the broadcaster, you must pay for them (like KRW 500 apiece - never mind those corny loyalty program points).

24 hour old ! Ancient by the standards of a (supposedly) information / knowledge society where 90% of households are already enjoying pay TV, where internet / mobile banking is commonplace, where interactivity starts when you wake up and stops when you fall asleep.

In spite of this key regulatory hurdle (the only reason why France is still a leader in commercial IPTV), and the competition of so many technos (including DMB*) IPTV is on its way to 3 M subs by EOY 2008.

And Daum still wants to become the 4th player this summer ; a TVNO on its competitors' backs with powerful partners : Microsoft (platform and Xbox 360 access), Celrun (set top boxes), and NHN / Naver (Korea's second portal and already a key VOD and TV aggregator - see Naver VOD or Naver TV news for example)

The competitors ? The usual suspects :
- SK Telecom : the mobile leader is wolfing pionneer and leader Hanaro Telecom down. HanaTV targets 1.8M subs EOY (800k EOQ1 2008) with a break-even point at 2M.
- Korea Telecom (on the way to merging with KTF) : Mega TV has the cutest logo and the best network (optic fiber all the way through its Megapass broadband subsidiary).
- LG Telecom : #3 as always for the TTM as well as the market share. myLGTV has the weakest VOD catalog but that's better than nothing.

These 3 players just reached the 10M 3G subs plateau : 5.28M for KTF (+440K for Show in April), 4.68M for SKT (+470K for T Live) and 190K for LGT's Rev. A service.

* KBS, a top broacaster, is also national and regional T-DMB license holder (with KTF) - about U-KBS (VOD, KBS Star, KBS Heart, KBS Music, KBS Data, KBS-Mozen TPEG telematics... - yet another "Ubiquitus" service), see kbs.co.kr/dmb.

SHOW time for KTF

KTF launched SHOW, its WCDMA service, last March 1st. The 1st Million mark was passed on July the 6th and 10,000 newcomers are joining every day (1,277,000 end of July 2007). "WCDMA" is now a cooler label than EV-DO in Korea. And it shows in KTF's end of July figures : during the last 3 month, its market share remained stable despite a 245k subs growth, but EV-DO subs were down (-45k). The 2-3G migration goes on (3G representing 52.8% of total, up from 47.4%) but furthermore, this confirms the CDMA migration has started, even at the 3G level (EV-DO down to 43.2% from 44.3%, WCDMA up from 3.0% to 9.6%).

Enough with boring figures. From a marketing point of view, you just need to know SHOW is the first real answer to June, SK Telecom's cool brand launched with EV-DO ages ago*.

As the name tells us, SHOW targets entertainment lovers in their 20s rather than business segments. And there is that "play" feature in the "O" of the logo. One third of subs use video telephony, especially couples. So KTF decided to launch, after the success of Movie Tariff Plan (1 free movie ticket per month included), a Movie Tariff Plans for Couples. And while they were at it another one for SMS addicts.

International Roaming (traditionaly restricted to the 2-3G CDMA world before) was another major sales pitch, and KTF announces more developments with partners DoCoMo / Conexus Mobile Alliance and Microsoft. Non-handset devices with USB connectivity are mentioned.

I guess it's time for KTF to propose something more relevant for business targets.

http://www.show.co.kr/ / http://www.conexusmobile.com/

* note that, unlike KTF, SKT declares no specific plan for migration to WCDMA. But the mobile leader is obviously and at last preparing triple play solutions with cablecos and fixed broadband players. As usual with a content flavor ("cable TV programs" are mentioned).