Financial Times FT.com

BlackBerry to make belated Korean debut

By Song Jung-a in Seoul

Published: May 13 2008 11:24 | Last updated: May 13 2008 11:24

The BlackBerry is belatedly set to reach South Korea, which has so far kept out the mobile e-mail devices despite Koreans being among the world’s heaviest internet users.

SK Telecom, South Korea’s biggest mobile operator, said on Tuesday it had received government approval to offer BlackBerry services. Research in Motion’s BlackBerry devices have not been on the market here because of a regulation requiring handset applications to be based on wireless internet platform for interoperability (WIPI), a homegrown software platform.

“The government regards the BlackBerry as a device for processing work only, so it has allowed an exception in its WIPI rule,” said Mina Ryu, a spokeswoman for SK Telecom.

SK Telecom aims to start BlackBerry services in August after testing its network services.

Ms Ryu said the exception reflected the new Korean government’s willingness to soften telecom regulations, which could allow foreign handset makers to tap domestic mobile phone users more aggressively.

The WIPI rule has protected domestic handset makers from foreign competition, analysts said, allowing Samsung Electronics and LG Electronics to dominate the local market.

Samsung is the biggest vendor in South Korea, controlling more than half the market. LG has a 25.9 per cent market share. Motorola is a minor competitor with less than 5 per cent. Nokia, the global market leader, does not sell its products in Korea because of the WIPI rule.

“Were it not for the rule, foreign companies could have penetrated the domestic market more actively. It has become a main stumbling block against their entry,” said a telecom analyst at a local brokerage.

Nokia is now in talks with SK Telecom to return to South Korea as the government is expected to ease the WIPI rule further. Nokia first entered the South Korean market in 2001 on an original design manufacturer basis but withdrew in 2003 due to sluggish sales.

Apple’s iPhone has also not been introduced to the Korean market because of the WIPI rule. Analysts say the Korean market is too small for global handset makers to make handsets tailored only for Korean customers.

Analysts said the introduction of BlackBerry services will help SK Telecom attract new customers as they see substantial demand from businessmen for the services. It will also allow foreign visitors to use their own BlackBerry devices here.

Korea has been considered a "telecom island" because foreign travellers cannot use their mobile phones due to network incompatibility. South Korea uses CDMA technology while most other countries use the GSM rival technology.

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