--The Korean peninsula is located on the far northeast of the Asian Continent, neighboring with China, Russia, and Japan.

--Korea has the total population of 44.8 million.
Economically Active population (EAP) was 21.1 million in 1995, 62.5% of the total population.

--Majority of EAP considered as well-trained labor force as 97.2% of population receives education up to high school.

--98% general population literacy rate in 1998 (under 25% in 1945).

--More than 20,000 students were in the graduate program in the US alone.

--With a highly educated work force, Korea implemented a series of five-year economic development plan (EDP).

II. EDP and Telecom Development

--Since the first five-year economic development plan (EDP) in 1962, over the relevant three decades (from the early 60's to the early 90's).

--Korean gross national product (GNP) has grown from the equivalent of $3.2 billion to $518.2 billion, with per capita GNP soaring from $120 to about $11,664.

--All governmental initiatives have been based on six EDPs.

--Korea's telecommunication development policy should be identified within the continuum of government efforts to achieve Korea's economic and social development dating back to 1962.

--Directed Capitalism (using the government's control over financial sector)

--Controlling Trade (with US mainly)

1. The 1st and 2nd EDPs (1962-66 and 1967-71)

--Building a consumer goods industry for domestic demands and a social infrastructure for the future industrialization.

--Telecommunications infrastructure was one of the lowest priorities for social infrastructure budget.

--While relying on a slow expansion of existing limited telephone line built with a help of US aids, 60.4% of the budget went to paving the roads and building highways.

2. The 3rd and 4th EDPs (1972-76 and 1977-81)

--A steep growth in export with concentration in heavy and chemical industries.

--As the Korean economy moved into a high growth period in 1970s, the unsatisfied demand for telephone began to increase.

--As late as the end of 1979, there were only 240,000 telephones in the country (about 6.3 telephones per 100 people).

--Peak: 619,000 applicant official figure, 1 million (potential) in 1980.

--People commonly waited a year or more for service, and delayed installation became a serious social issue.

--Up until the 1980s, the importance of communications to modern society was not fully appreciated in Korea.

3. The fifth and six EDPs (1982-86 and 1987-1991)

--Korean government made a dramatic shift in its economic policy.

--The economy was under the verge of economic break down mainly due to the failure of the heavy and chemical industries.

--Seeking for a more efficient and less energy-consuming industry, Korean government shifted its industrial policy focus from heavy industry to electronics, with telecommunications as a closely related concern.

--Upgrading Korea's telecommunications infrastructure also became its first priority in the fifth EDP to support the development of the electronics industry as well as to solve the persistent backlog of demand for telephone facilities.

4. Telecommunications Development

--In 1982, the government set up the Korea Telecommunications Authority (KTA) to take over the telecommunications business from the Ministry of Communications (MOC), and restructured telephone services.

--In 1986, telephone service made significant progress in domestic and international calling. The number of telephone lines increased to about 8.8 million in 1986, three times the number of lines in 1980; household penetration went from 68 to 90%.

--By the end of 1994, the number of telephone lines in Korea surpassed 21 million.

--The number of telephones per 100 people had risen to 39.6 and all telephone circuits were connected by automatic switching systems.

--By the year 2001, a total of 28.23 million fixed telephone lines are expected, bringing the telephone supply rate to 51 per 100 persons.

5. Telecommunications market liberalization.

--In the mid-1980s, Korean government faced the need for further changes in its policies.

--Domestically, inefficient government bureaucracy in KTA was under attack by the growing internal demand for better services whereas the advent of the World Trade Organization called for international competition.

--A key issue was whether the KTA should be privatized and deregulated.

--In 1983, the Public Telecommunications Business Act brought about dramatic changes in this regulatory structure by providing a statutory basis for market liberalization.

--It restructured KTA as a public corporation with all the stock owned by the government.

--The Act also authorized the creation of the second telecommunications corporation, the Data Communications Corporation (DACOM), to be responsible for enhanced network services such as electronic mail, information databases, videotext and value added networks (VAN).

--In 1985, the Korea Mobile Telecommunications Corporation (KMTC) was established and began car phone, cellular and paging service.

--The telecommunications laws were revised again in July 1989 to bring competition in VANs by opening up the market to foreign telecom companies.

--On January 1, 1990, KTA was privatized by selling part of the stock to public, and renamed itself as Korea Telecommunications (KT).

--Under this liberalized regime, KT faced DACOM in international calling, and DACOM competed with KT in enhanced service market. In 1990, full competition was introduced in the value-added telecommunications service sector.

--In July 1991, government revised the laws once more by classifying the Korean telecommunications market into three categories: those services subject to full-competition, limited competition and monopoly control.

--While enhanced services market was in full-competition categories, the local telephone service was exclusively provided by KT.

--Due to restructuring, the Korean telecommunications market began to liberalize rapidly.

--The three major elements of the market restructuring master plan was launched.

First, it was determined that market forces would play a greater role in decisions to permit the market entry of service providers.
Second, telecommunications service providers would be permitted to further diversify their commercial activities.
Third, the business operations of service providers would be further deregulated.

--Duopolistic competition took place both in cellular and radio-paging markets that had previously been monopolized by the KMTC.

--In the paging service sector, the government divided Korea into six regions and introduced region-wide duopolistic competition with 12 licensed regional service providers from 1993.

--In radio-paging market, one nation-wide provider and 12 regional service provider exists.

--The second cellular telephone service started in 1994. The license was awarded to the Shinsegi Mobile Communications Co., a consortium of 245 domestic and foreign companies.

--In keeping with the spirit of restructuring, the duopolistic competition is found in all telecommunications markets.

--In the value-added service market, there are already more than 200 value-added service providers currently operating in Korea.
--These entities provide services through leased lines from KT and DACOM. Also, both ISDN service and ADSL service are commercially available by KT and Hanaro Telecom, a private company.

--For Internet service providers (ISP), there are 21 commercial ISPs and 4 non-commercial ISPs in Korea.

--In the international, and long-distance markets, KT, DACOM, and Onse Telecom are competing.

--PCS (personal communications service) is licensed to three domestic telecommunications companies: LG Telecom, KT, and Hansol Telecom.

--Local telephone market, which had been monopolized by KT, has been changed with the introduction of Hanaro Telecom.

--However, as of June 1999, KT still has 99.3% market share and Hanaro has 0.7%.