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Telecommunications In Korea Essay, Research Paper


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Telecommunications is a tool supplying information services to both private and public sectors. It is extremely involved in society and helps a society grow and flourish. It affects the ideals and tendencies of a society and, therefore, is a really of import factor in a turning state. With an country of 99,019 square kilometres, and a current population of 44.6 million people, the Republic of Korea is a great challenge to link through telecommunication tools and undertakings.

Even with such a great sweep of land and peoples, Korea has succeeded in going the 8th most advanced state in telecommunications. There are 337 telephones per 1000 people with an one-year growing rate of 15.6 % for residential endorsers, 10.1 % for commercial endorsers and 245 for leased line informations services. Therefore, the inquiry of how Korea accomplished this in merely a small over a decennary comes to mind.

In this paper, I will give an overview of the developments of the Korean telecommunications industry. Then through other literary beginnings along with the telecommunications background information, I will demo how the Korean Government & # 8217 ; s pattern of deregulating and liberalisation has spurred on competition and, henceforth, advancement in the Korean telecommunications industry.

Chapter 1:

History of Telecommunications

The first signifier of telecommunications in Korea began in 1885 with the first telegraph which linked Seoul and Inchon which were located 35 km apart. The periods of telecommunication development can be divided into three phases. In the first phase, 1885 to 1961, there was limited telegraph and telephone service available. They were chiefly for official concern service. The Nipponese business from 1910 to 1945 and the Korean War from 1950 to 1953 stagnated telecommunication advancement ( Lee 1 ) . Merely 120,000 telephone lines were installed in this period, providing a minimum fraction of 0.4 phones per 100 individuals.

In the 2nd phase, 1962 to 1981, important advancement in telecommunications occurred. The authorities improved basic communications installations by linking rural countries by phone and by making preparation centres for telecommunication employees to maintain the phone lines running swimmingly. Telephone subscriber lines increased to 4.1 million lines offering 8.4 phones per 100 people. More significantly, long-distance telephone naming circuits were boosted from 1,177 to 88,571 circuits, while international naming circuits were increased from 12 to 274 ( Lee, et. al 2 ) . During this period, the authorities installed the micro-wave web in 1967 and the spread transmittal web between Japan and Korea in 1968. The first two satellite Earth Stationss were built during this period. In add-on, a coaxal overseas telegram was installed to convey an automatic telephone call service between major metropoliss. In 1979, the electronic shift system ( ESS ) was introduced to help with the increasing figure of phone subscriptions.

The 3rd phase, happening from 1982 to the present, illustrates a immense and dynamic alteration in the telecommunications industry. First, in 1982 to 1986 an add-on of 6.2 telephone lines were installed. Within this period, the engagement of Korea in the Asiatic Games and the 1988 Olympics placed telecommunications at a high demand. With the tenth Asiatic Games in 1986, an integrated automatic shift system was introduced. The capableness to put in telephones instantly upon petition became available. The 1988 Olympics brought the thought of establishing Korea & # 8217 ; s ain orbiter in head. Although a orbiter was non launched during this period, it made the thought more of a hereafter program.

Government Policies and Telecommunication Companies

The development of Korea & # 8217 ; s information society can non be separated from the development of the Korean authorities policies. This is because all telecommunication beginnings were one time controlled by the Korean authorities. Then as old ages went on, the authorities loosened its reigns for other private and publically owned companies to develop telecommunication merchandises which they could themselves market. This lessening in authorities control resulted to a more competitory environment where advancement prospered.

In the early 1980 & # 8217 ; s, the Korean authorities Ministry of Communications ( MOC ) restructured the public telecommunications sector which led to the transportation of authorities operated telecommunications to a public corporation, Korea Telecommunication Authority ( KTA ) ( Seo 154 ) . Subsequently in 1982, telecommunication powers were besides given to a private company entitled the Data Communications Corporation of Korea ( DACOM ) . This was a turning point for the telecommunications industry. Now the authorities did non hold entire control over the industry.

More significantly, subsequently in its being, KTA gave fiscal support to other telecommunications industries to make the necessary equipment for telecommunications such as coin telephone sets, a digital shift system, and fiber optical transmittal system, etc. ( Seo 154 ) . KTA besides aided in the development of the Electronicss and Telecommunications Research Institute ( ETRI ) , the first measure for Korea towards an autochthonal and autonomous technological society ( Seo 156 ) . Korea was to get down its ain research and development of telecommunication tools alternatively of trusting on other states & # 8217 ; imports.

In 1984, KTA Research Center ( KTARC ) was created to construct a engineering base and to absorb and accommodate foreign engineering harmonizing to the state & # 8217 ; s demands. KTARC provided counsel and proficient support to web runing group and industry based on the policy set by KTA. Thus, research for telecommunications were now being conducted by the state & # 8217 ; s universities, by EERIE, by KTARC, and by other in private owned companies. As the capableness of industry grows more and more complex, much of the work performed by EERIE will be taken over by industry, go forthing EERIE to travel into high hazard research and development and advanced technological support. In 1987, the entire research and development investing by KTA is about 70 million US dollars. Therefore, much has gone to research and development, the base for telecommunications advancement and engineering.

Besides KTA and DACCA, two more telecommunication bearers were founded in the 1980 & # 8217 ; s. Korea Mobile Telecom ( KMT ) , was established in 1984 to supply cellular and paging services. The handiness of nomadic phones in 1993 screens 107 towns and metropoliss, making over 80 per centum of Korea & # 8217 ; s population. Korea Port Telephone Corporation was established in 1985 to supply communications services in the port countries. Furthermore, in 1991, the concern relationship between KTA and DACCA was changed so that KTA could supply informations communications services and DACCA international telephone services.

Consequences of Telecommunications Research and Development

Research and development performed by Korea would be lead to come on. First, it would increase the technological capableness in a cardinal sector of the economic system by supplying the necessary substructure for the debut of advanced telecommunications services. Second, technological dependance on foreign beginnings, and import of engineering would decrease. Third, the cost of geting engineering particularly in footings of foreign exchange would decrease at least in the long tally, by the permutation of import for local production and by export net incomes. Furthermore, & # 8220 ; enhanced autochthonal technological capableness provides Korea with a stronger dickering power in negociating with the foreign providers, which will finally be reflected in better status of engineering transportation and lower cost system acquisition & # 8221 ; ( Seo 153 ) . Therefore, Korea would profit greatly by executing its ain research and developing its ain merchandises alternatively of trusting on other states for its telecommunication tools.

Development of Different Systems to Widen Calling Lines

The first coevals of Electronic Switching System ( IS ) appeared in the early 1960 & # 8217 ; s. But within a few old ages these were superseded by the system which reflected new constructs based on the combination of communications and computing machines. Over the same period, digital transmittal techniques have besides been greatly improved.

Computer control of exchanges, clip divisions exchanging and the transmittal of information in digital signifier are the footing for the successful big graduated table telecommunications connexions throughout Korea.

The recent development of microelectronics, infinite and optical fibre engineerings made it possible to distribute new telecommunications services around the universe. Besides voice and text, immense measures of ocular information are being transmitted. Videotex systems connect endorsers to informations Bankss and expose economic, fiscal and scientific information as text or artworks on a telecasting screen. In add-on, services such as video-conferencing, teletex and electronic mail are widespread.

All of these services could be integrated into a individual planetary web called Integrated Services Digital Network ( ISDN ) . An ISDEN comprises digital shift, computing machine control and optical fibre digital transmittal.

Telecommunications web consist of endorser terminuss, endorser lines, local exchanges, toll exchanges and interexchange circuits.

Subscriber terminuss have evolved from the simple telephone set designed to supply basic voice telephone. The current tendency is toward increasing intelligence in the terminus, enabling endorsers to execute a scope of maps which enhance the telephone public-service corporation. The terminuss associated with other services such as autotype and informations have besides become more various and sophisticated. Already the construct is emerging of a multipurpose terminus for text, informations and other non telephone services every bit good as being used as a telephone. An ordinary telephone line will be able to transport many of these services and devices of this sort and would do it easier and cheaper to supply non telephone services to rural and distant countries.

Subscriber terminuss are usually connected to local exchanges by a physical brace of music directors. The physical music directors are expensive, stand foring about 30 % of the entire capital cost of works in urban countries. However, in extremely populated countries, a suited local web distribution system can be planned and installed that can be expanded economically. Local webs use overhead or inhumed overseas telegrams in assorted size and flexibleness points, leting sufficient capacity to suit new endorser. Assorted agencies of concentrating traffic are available so that more than one endorser may portion each physical brace of music directors.

However, local distribution represents the major job of supplying telephone service in rural and distant countries. In rural countries, endorsers may be at a distance over 30 to 50 kilometres from the exchange and the terrain and environment communicating reassign even more hard. Local web cost may stand for every bit much as 70 to 80 % of capital works cost which are themselves usually 4 to 5 times of urban cost.

An alternate to physical music directors, particularly in rural countries, is radio telephone. Ultra High Frequency and Super High Frequency systems have direct line of sight waies between sender and receiving system at a distance of 50 to 70 kilometres. In pattern the environment and terrain cut down this distance, Bettering the use of frequence spectrum is possible by utilizing the cellular wireless construct and other methods of dynamic frequence assignment.

Manual systems with operators puting up connexions utilizing cardinal stoppers and knuckleboness are still used in developing states. If attended for 24 hours a twenty-four hours, these provide sensible service with low investing, low ingestion of power and simple care.

In automatic parallel systems, address is converted into a electrical signal with variable frequence and amplitude and calls are connected through separate switches in the system. The oldest automatic shift system is the bit-by-bit system with

electromechanical switches. Although extensively used, it becomes disused.

Cross saloon systems operate at higher velocities, are less dearly-won to keep, and give endorsers greater capablenesss. But this system besides will be disused and it is expected to stay in a limited life-time merely to supply for the enlargement of bing systems.

The most recent coevals of parallel ESS have Stored Program Control ( SPC ) . In SPC systems the control maps are performed by a computing machine, and the exchanging matrix can utilize solid province electronic crosspoints. Advantages include extended distant operation and care installations, constitutional trial and signaling units and practically no unfastened contacts, which make them less sensitive to dust and humidness. Normally SPC exchanges are built in compact signifier and so necessitate air conditioning, particularly in hot and humid climes. These systems are non yet disused, but most makers are exchanging their merchandise line to digital ESS.

Digitalization of Telecommunications

It is the digitalisation of telecommunications that has accomplished much of its telephone connexions. The TDX is a digital system. In digital ESS, voice or signal is converted from the parallel signal to a codification signifier consisting of high velocity on/off pulsations. Pulsations of different conversations are separated from each other by distinct clip intervals and switched in bend by the clip division exchanging system so that many calls are multiplexed by the same switch. Digital exchanges are cheaper to put in and keep than linear exchanges peculiarly in the larger sizes. Among the advantages of digital shift are its compatibility with computing machines and possible cost and infinite nest eggs when operated in concurrence with digital transmittal systems ( Lee 27 ) .

The links transporting calls between exchanges may be symmetrical brace overseas telegram, quad overseas telegram, coaxal overseas telegram, optical fibre cabled. The pick of medium depends upon bandwidth or traffic volumes to be carried, the distance and terrain to be covered, the public presentation required, the distribution of the traffic and the cost. Interexchange transmittal system in the yesteryear were parallel but are now being superseded by digital systems.

Technological developments are cut downing cost and bettering the quality of service. Optical fibre overseas telegram is peculiarly suited for high capacity paths, go forthing longer distances between repeaters, farther cut downing cost and increasing dependability. Optical fibre overseas telegram will be replacing coaxal and quad overseas telegram systems as the preferable medium. Microwave systems are peculiarly suited for medium and high capacity paths in inhospitable terrain. Coaxial or optical fibre pigboat overseas telegram is besides an economic pick in legion instances for long distance or international transmittal.

There are many advantages of digital shift and transmittal. Such a web carries information traffic as easy as voice traffic and therefore is used by many types of service. The consequence is economic systems of graduated table and resiliency when traffic on peculiar services extremums. The computing machines within exchanges monitor and control the behaviour of the web as a whole system and open up new capablenesss and techniques of operation. The flexibleness of digital systems besides simplifies the physical design of webs so that the restrictions on functioning big countries from a individual exchange are reduced. KTA hopes to digitize all phone lines by the twelvemonth 2005.

Chapter 2:


One specific industry that was straight in the reigns of the Korean authorities was the media. The communications media in South Korea was under the dictatorial governmental imperativeness control. This changed in 1987. A major historical Declaration released the media from this tight clasp. Future Korean President, Roh Tae Woo, would do the 29 June Declaration explicitly naming for & # 8220 ; freedom of the imperativeness & # 8221 ; ( Won 215 ) . With the abolishment of ordinances that antecedently limited the figure of regional newspapers to one to a state, a big figure of newspapers were reopened or freshly founded. Religious organic structures and other corporations began airing on new wireless channels. Now people could show their sentiments and publicise subjects which were one time prohibited by the authorities. There was besides a dramatic addition in the figure of periodicals on the market. In add-on, with the lifting of the de facto prohibition against the constitution of new newspaper, three general-interest day-to-day newspapers, Hankyoreh Shinmun, Segue Ilbo, and Kookmin Ilbo, began publication in Seoul with countrywide distribution. The consequence of the June 29, 1987 Declaration can be seen by the skyrocketing of media beginnings. Whereas Korea had merely 30 national and regional newspapers being published at the clip Roe Tae Woo made his celebrated 1987 liberalisation declaration, by the terminal of 1989, this figure had more than doubled to 68. The figure of periodicals published daily, hebdomadal, monthly, semimonthly or quarterly increased from 2,241 anterior liberalisation to 3,441 in December 1988. Another 109 periodicals were registered with the authorities in January 1989 ( Won 217 ) . Furthermore, information Ministry figures for December 1989 show that Korea had 4,400 periodicals, including 68 dailies, two intelligence services and 819 weeklies ( Won 217 ) .

Another of import consequence of this 1987 Declaration was its abrogation of the Basic Press Law, the authorities policy which created hierarchy and multiple ordinances for the imperativeness. The Basic Press Law, effectual in January 1981, contained a figure of steps that facilitated the authorities & # 8217 ; s control of media. This jurisprudence contained a figure of harmful commissariats leting the authorities to impound media material, such as newspapers and magazines, and which purely defined the duty of the media. In add-on, it enabled the authorities to shut a publication in cases where a publication engaged in activity that went against its declared intent of publication or upset the public order by motivating force or other agencies ( Won 218 ) . Publications could besides be closed down if they were found publications were found helping and abetting or praising North Korea. Thus, the abrogation of the Basic Press Law led to a more unfastened media. Journalists now had a broader field to work with and were able to freely inform their audience of public concerns.

On November 10, 1987, at the same clip that the authorities repealed the Basic Press Law, the National Assembly enacted new statute law for the broadcast media and amended the Korea Broadcasting System Law. This statute law established a broadcast commission that would guarantee that wireless and telecasting Stationss were managed in the public involvement. This commission began runing on August 3, 1988. The commission founded the Seoul Broadcasting System as a in private owned broadcast corporation, conveying Korea & # 8217 ; s air industry into a period of double construction of private and public ownership ( Won 219 ) . Legislation besides worked further to maintain airing monopoly from happening through the Broadcast Culture Promotion Association which made the environment better for other companies to open up. Therefore, authorities has created a more unfastened environment for other media companies to get down concern.

Effectss of & # 8220 ; Freedom of the Press & # 8221 ;

With the alteration in media consumers, from the elite to the general populace, and from the general population to the specializers, there has been a tendency toward specialisation. The tendency leads to a specialisation harmonizing to political orientation, political acquisition, specific consumer province, or mentality on the intelligence. This environment for a & # 8220 ; free-press & # 8221 ; leads to a wider assortment of intelligence, opening up new avenues to show more sentiments and more point of views in a wider range. This broadens audience cognition.

Chapter 3:

Present State of Telecommunications in Korea

At present, Korea has 20 million lines with 17 million endorsers which adds up to 42.6 lines per 100 people. The figure of cellular nomadic phone endorsers sums to 785,000 lines and paging service Numberss reach about 5.5 million ( Apt 338 ) . There are some 285,000 public payphones in the state and coin operated units are being replaced with cardphones.

As a consequence, Korea now has one of the largest telecommunications webs in Asia and is the universe & # 8217 ; s eight ranking state in footings of the figure of telephones installed.

In 1984, Korea successfully developed the TDX-AA, a domestically developed digital electronic shift system, going the tenth state to develop native shift system. Enhanced systems like the TDX-1B and TDX-10 followed shortly after. In peculiar, the TDX-10 system which has a capacity of 100,000 circuits and high interoperability, enabled the installing of a big measure of telecommunication lines.

Presently, Korea deploys about seven million lines with this TDX system, and exports this system to assorted states. Now Direct Distance Dialing ( DDD ) , long-distance service and international telephone services are available anyplace in the state, including rural and distant country.

Other services presently available to Korea are E-mail, voice mail, electronic informations interchange, online informations retrieval and database processing, codification and protocol alteration, and enhanced facsimile services.

Soon, KTA is developing the HiTEL informations communications retrieval service leting information to be retrieved by personal computing machine or HiTEL terminus and facsimile machine for artworks, from assorted databases covering many topics. Some 35,000 users are presently linked to this system. In 1993, KTA & # 8217 ; s HiNET-P service was expanded to go a national package exchanging service offering a Korean interface. A package leased line service is available plus dial-up database entree. A HiNET-C service has besides been expanded to go a national service. Value-added services presently offered by KTA include voice information, voice mail, E-mail, Hi-FAX autotype and HiVICON domestic conferencing, launched in 1993. KTA is besides involved in the R-J-K pigboat overseas telegram undertaking associating Korea, Japan, and Russia, that was due for completion in 1995. KTA is besides a portion of the Asia-Pacific Cable Network ( APCN ) undertaking to link 10 Asiatic states.


Korea has now been puting in satellite communications. Satellites provide clear and direct connexions whether it be for telephones or wireless and telecasting broadcast medium. Therefore, the orbiter would be a major forward move into the hereafter for telecommunications. Specifically satellite can be used for long-distance telephone calls, for directing telecasting signals to remote countries in the state, for facsimile transmittal of paperss that become progressively of import as Korea & # 8217 ; s concern community continues to spread out, for picture conferencing, for electronic banking, for electronic schoolroom direction, and for directing FM wireless plans all over Korea ( Lee, 1 ) . These semisynthetic orbiters can besides be used by the armed forces for defence intents. Furthermore, a communicating orbiter will enable Korea to derive instant entree to information from other states, therefore contracting the information spread bing between it and more extremely developed states ( Lee 1 ) . Therefore, the orbiter would really maintain Korea up-to-date on engineering and assistance Korea in maintaining a competitory border in telecommunications every bit good as in other societal and economical countries. Hence, with the many utilizations of the orbiter, Korea has began its investing for the hereafter.

Korea already receives international maritime orbiter communications services among navigation vass or vessel-to-land communications through the INMARSAT-F3 orbiter through its Earth station which was completed in December 1990. Since 1989 MOC has considered establishing geostationary orbiters. In 1992, KTA signed a orbiter purchase contract with GE which would be assigned to Martin Marietta, and a launching service contract with McDonnell Douglas for establishing two & # 8220 ; MUGUNGWHA & # 8221 ; satellites with the capableness of 3,900 communications circuits, 3 picture channels, and 3 broadcast medium channels in April and October 1995. As a preliminary measure to geting satellite operating techniques and making demands for orbiter communications services before the operation of the orbiters, KTA leased one set of 72 MHz-level Ku-Band transponders form INTELSAT for five old ages that began in April 1992. Since September 1992, KTA has been supplying VSAT services through the INTELSAT orbiters. Furthermore, in August 1992, the Korea Advanced Institute of Science and Technology successfully launched a 50Kg-level scientific experiment orbiter, named KITSAT, through Arianespace. Planned orbiter services include trunk relay for public telephone, high velocity informations, VSAT, DAMA/SCPC rural public voice/data, and direct Television broadcast medium ( Chung 66 ) .

Chapter 4:

Government Policies

The Telecommunications Basic Law and Public Telecommunication Business Law was amended and the Korea Communication Commission was established to procure just competition, protect subscriber rights and make up one’s mind on of import telecommunications policies. Korea & # 8217 ; s closed market system has been altering to a more unfastened market system. The Korean authorities has liberalized its ordinances on foreign investing and authorities procurance. The regulative model for telecommunications service suppliers are governed by the Basic Telecommunications Law and the Public Telecommunications Business Law. Under these two Torahs, the Korean telecommunications service suppliers are divided into two chief classs: web service suppliers and value added service suppliers. Network Service Providers are telecommunications service suppliers who construct or own their ain circuits and transmittal installations and must stay by common-carrier duties, such as cosmopolitan service. Value Added Service Providers are telecommunication service suppliers who lease telecommunications circuits from web service suppliers and utilize them to supply their services.

Network Service Providers are divided into two classs: General Service Providers, which own nation-wide telecommunications installations, and specific service suppliers, whose service proviso is limited to the geographically or technically limited sectors, such as nomadic telecommunications services.

General Service Providers can supply any or all of the undermentioned services upon appellation of the MOC: voice telecommunications, teletypewriter, rental circuits, rental equipment, wire, informations communications, autotype, and other assorted services. Specific Service Providers can supply any or all of the undermentioned services upon licence from the MOC: nomadic voice telecommunications, paging, port telecommunications, airdrome telecommunications, bole wireless communications, radio informations communications, and other assorted services.

On the other manus, Value Added Service Providers can supply the undermentioned services upon enrollment with the MOC: online database and remote computer science services, computing machine communications services, informations transmittal services except voice telephone, teletypewriter and facsimile services. Merely domestic online database and remote computer science services do non necessitate enrollment with the MOC. Harmonizing to the & # 8220 ; Understanding & # 8221 ; , policies which were signed by the Korean authorities, the value added services are defined as & # 8220 ; any serviced offered over the telecommunications transmittal installations of General Service Providers which employ such computing machine processing applications as: transition of content, codification, protocol or similar facets of a subscriber & # 8217 ; s transmitted information, proviso of extra, different or restructured information, and computing machine processing affecting a endorser & # 8217 ; s interaction with stored information & # 8221 ; ( Jeong 4 ) . The Understanding besides illustrates the illustrations of value added services as follows: codification or format transition, protocol transitions, shop and frontward, facsimile communications which involve shop and forward or one of the maps listed above, database, remote computing machine service, electronic mail, electronic informations interchange, message handling service, value-added facsimile service and voice mail.

Business Sectors Open to Foreign Investment

With the passage of the Basic Telecommunications Law and the Public Telecommunications Basic Law, KTA and DACCA has provided merely data communications, rental circuit, and international voice telecommunications services. For any extra ser

frailties, MOC blessing is required. General Service Providers are closed to foreign investing. In add-on, no one stockholder may keep more than 10 percent equity involvement in General Service Provider companies. Equipment makers are non allowed to have more than a 3 per centum equity involvement in General Service Provider companies.

Besides under the Basic Telecommunications Law and the Public Telecommunications Basic Law, three Korean telecommunications companies, KMTC, KPTC, and KOTIS were licensed as Particular Service Providers. Special Service Suppliers are unfastened to one-third foreign investing. In add-on no 1 stockholder, domestic or foreign, may keep more than a one-third equity involvement in any Particular Service Provider company. No one equipment maker or government-invested endeavor may keep more than 10 percent equity involvement in Special Service Provider company.

In August 1992, the MOC ab initio issued a preliminary licence for nomadic telephone services as a rival of the Special Service company, KMTC. For the licence, six pool associated with 11 foreign concerns such as GTE, Hutchison, Bodafone, Bell Atlantic, U.S. West, Southwestern Bell, Swedish Telecom, Qualcom, Pactel, Mannesmann, Nynex and BT. Since the selected pool returned the licence to the MOC because of political convulsion affecting the selected licensee, the MOC will publish another petition for proposal within this twelvemonth. At the same clip as the choice of the licensee for Mobile telephone services, nine preliminary licences for regional paging services were issued to nine pool out of forty-one. Although foreign investing is allowed, no important foreign service concerns were involved with the 41 pool except Millicom.

As of February 1992, there exists 30 value added suppliers, 13 of which are joint venture companies. AT & A ; T, IBM, EDS, and AMCOR from the United States maintain a minority involvement in their joint ventures with Korean spouses. Out of 30, merely 4 Value Added Service Providers are registered to supply international value and services. These companies are Asiana Air, STM ( joint venture between Goldstar and EDS ) , SDS ( joint venture between Samsung and IBM ) , and Trans World Net ( Joint venture with Global Communications ) .

In contrast to the telecommunications services, foreign investing in fabricating telecommunications equipment may be freely made without any limitations on foreign equity ratio, etc. For illustration, Motorola has maintained a wholly-owned subordinate for fabricating equipment in Korea. Such investing, nevertheless, must go through through the Ministry of Finance ( MOF ) blessing procedure under the Foreign Capital Inducement Law ( FCIL ) that is by and large applicable.

One issue related to the value added services is shared usage of leased circuits. Presently, while the shared usage of Network Service Providers & # 8217 ; domestic leased circuits for informations communications is permitted without any limitation on the relationship among the users, the shared usage of Value Added Service Providers & # 8217 ; domestic leased circuits for voice communications, international leased circuits for voice communications, and international leased circuits for informations communications is permitted merely within the group of entities which maintains a close concern relationship. The range of close concern relationship includes affiliates with 30 per centum equity involvement and concern spouses which account for 20 per centum of the entire value of minutess. Users of Network Service Providers & # 8217 ; services within the same close concern relationship are free to attach exchange equipment. Presently merely one terminal of a domestic leased circuit for informations communications is presently allowed to be connected with the public Network Service Provider web.

Requirements for Joint Venture

Like any foreign investing in Korea, a foreign investor must obtain blessing from or register a presentment with the Ministry of Finance and the Foreign Capital Inducement Law. More specifically, foreign investing for those industrial sectors on the negative list or which are capable to local equity engagement demands need blessing from the Ministry of Finance. For such blessing, a foreign investor must subject a elaborate concern program and a joint venture understanding. The concern program must province the selling program, the fiscal program and other prescribed points. The joint venture understanding should supply the rights and duties of each party to the joint venture.

If the sum of investing is three million U.S. dollars or more, the joint venture understanding will be reviewed by the Korean Fair Trade Commission to find whether it contains any unjust commissariats harmonizing to the Anti-monopoly and Fair Trade Law. The undermentioned footings will be regarded as unjust trade patterns: & # 8220 ; the joint venture company is unreasonably required to buy natural stuffs, parts, equipment, related goods, etc. , from the foreign investor or its designee ; the joint venture company is prohibited from, or is required to obtain anterior blessing for exporting any merchandise it manufactures to countries other than those were the foreign investor is engaged in ordinary gross revenues activities or those where the foreign investor has granted sole gross revenues rights to a 3rd party ; the joint venture company is required to export any merchandise it manufactures merely through the foreign investor or its designee, except where the foreign investor or its designee assumes an duty to accept such merchandise at internationally sensible monetary values and conditions at the appropriate clip ; and in visible radiation of the by and large recognized patterns in international understandings of this nature, the contractual conditions are unreasonably disadvantageous to the domestic investor ( Jeong 6 ) . The Korean Fair Trade Commission might see as unjust such commissariats where a foreign investor elects managers in surplus of the equity ratio or a foreign investor has the tie-breaking ballot in a 50/50 joint venture. The minimal sum of foreign investing is 50 million Korean won ( about U.S. $ 60,000 ) . With Ministry of Finance blessing, a foreign investor can integrate a joint venture company in conformity with the Korean Commercial Code.

A joint venture company set uping itself as a value added service supplier must register with the Value Added Service Providers by fulfilling several demands under the Telecommunications Business Law. These demands are as follows: & # 8220 ; the fiscal demand & # 8211 ; the minimal capital is 50 million won ; telecommunications installations requirement & # 8211 ; care of certain major telecommunications installations and satisfaction of the safety and dependability criterions ; and proficient capableness demand & # 8211 ; keeping of a lower limit of two technicians ( Jeong 6 ) . Along with an application signifier, the certification for enrollment is limited to those to corroborate the above. A registered Value Added Service Provider must advise the MOC of standardised contracts with the clients. An interconnectedness with webs of Value Added Services & # 8217 ; required a presentment to the MOC. Interconnection between a Value Added Service Provider & # 8217 ; s web and a Network Service Provider & # 8217 ; s web would be governed by a standardised contract of the Network Service Provider. Where no standardised contract of an Network Service Provider is available for the type of interconnectedness requested by a Value Service Provider, a particular interconnectedness understanding may be made capable to the blessing of the MOC. Furthermore, runing understandings between a registered Value Added Service Program in Korea and service suppliers in a foreign state are capable to MOC blessing.

Protection of Technology

Korea has a full scope of rational belongings rights: patent, trade secrets, public-service corporation theoretical account, design, hallmark, right of first publication on literary plants and computing machine package and sui generis right to layout designs. Korea is besides comparatively effectual in implementing and protecting those rights in the unfortunate event that such rights are infringed in Korea. An innovation that meets the industrial pertinence, freshness, and the non-obviousness demands can obtain a patent right for 15 old ages after the day of the month of enrollment. Sing certain medical specialties and agricultural and proficient stuffs, the Korea Industrial Property Office ( QUIP ) may widen the term of the patent right for up to 20 old ages. A device that can non run into the high degree of creativity needed for an innovation is protected under the Utility Model Law for 10 old ages after the day of the month of enrollment. A design of form, form, or colour, or any combination of these in an article which produces an aesthetic feeling on the sense of sight is protected for 8 old ages after enrollment.

Sing the protection of trade secrets, the Korean authorities promulgated the revised Unfair Competition Prevention Law in December 1991. The Presidential Decree finalized the effectual day of the month of the revised Unfair Competition Prevention Law as December 15,1992. Thus any embezzlement of trade secrets can be prevented by an injunctive order. Monetary harm claims can besides be filed against the infringer.

A hallmark is besides protected for 10 old ages upon enrollment and such enrollment is renewable every bit long as the hallmark is used in Korea.

The Copyright Law protects writers & # 8217 ; moral rights during their life and economic rights for their life plus 50 old ages. Computer plans are besides protected by the Copyright Law and the Computer Program Protection Law for a term of 50 old ages after the creative activity of the plan concerned. Registration or publication is non necessary for the right of first publication protection of writers & # 8217 ; work and computing machine plans.

Internationally, after Korea acceded to the World Intellectual Property Organization on March 1, 1979, and the Paris Convention for the Protection of Industrial Property on May 4, 1980, it joined assorted international pacts: the Patent Cooperation Treaty on August 10, 1984, the Universal Copyright Convention and the Geneva Monogram Convention on October 1, 1987 and the Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purpose of Patent Procedure on December 24, 1987.

Regulation of Public Service Providers

Under the Anti-monopoly and Fair Trade Law, market dominant endeavors can non exert their market power abusively by, for illustration, unreasonably finding the market monetary value of their goods or services. Furthermore, this jurisprudence besides regulates unjust conjunct activities, and other unjust trade patterns in general. However, every bit long as any endeavor is regulated by other Torahs, it is exempted from the Anti-monopoly and Fair Trade Law. Since the Basic Telecommunications Law and the Telecommunications Business Law purely regulate public telecommunications service concerns, the Anti-monopoly and Fair Trade Law would non be applicable to such extent.

Under the Basic Telecommunications Law and the Telecommunications Business Law, in instances where a Network Service Provider competes with a Value Added Service Provider in the proviso of value added services, the Network Service Provider is prohibited from prosecuting in any anti-competitive behavior such as cross-subsidization, predatory pricing, unauthorised revelation of customer-proprietary web information without the client & # 8217 ; s mandate, undue hold in denoting proficient alterations to its web or web interface, or prejudiced entree to web services of maps. Therefore, the MOC is in the procedure of developing a policy on competition precautions, including the unfastened web service proviso and cost-subsidization.

Under the Basic Telecommunications Law and the Telecommunications Business Law, KTA and DACCA, the two general service suppliers, are besides purely regulated as common bearers. They must describe service rates and standard footings and conditions of their service contracts to the MOC. Although the Law Concerning Standard Footings and Conditions is by and large applicable to standardised contracts, it is irrelevant to the extent that such contracts are approved by the MOC. They besides can non decline to supply their services without justifiable evidences under the Telecommunications Business Law.

Chapter 5:

Literature Review

Eun-Ju Kim provinces that & # 8220 ; policy determines a state & # 8217 ; s telecommuncations competency & # 8221 ; ( Kim 118 ) . She states that policy in the field of telecommunications has changed from ordinance to liberalisation. Government produced policy alteration & # 8220 ; aimed at promoting managerial efficiency in state-owned industries through cut downing authorities intercession & # 8221 ; ( Kim 120 ) She farther provinces that the primary policy in the 1980 & # 8217 ; s can be summed up as the debut of liberalisation or decentalisation through dividing the maps of policy devising and operating installations and services in the field of telecommunciations under political economic transmutation. These different entities created by the authorities in bend contributed to the development of basic telecommuncation installations by doing steady investings. Kim refers to the separation of telecommunications duties from direct authorities supervising to other entities such as KTA, DACOM, and ETRI. Through these entities, research and development was made possible.

To present advancement and heighten the telecommunication substructure, the Korean authorities encouraged competition. In this respect, the MOC intended to present just competitory policy at assorted degrees from the early 1990s except for local voice services which will still be monopolized by KT. As a first measure, KT for the first clip began to vie with DACOM to supply international telephone services from December 1991. The MOC is be aftering to licence other domestic and foreign companies to come in the telecommunication competition.

On the footing of the new competition policy, a assortment to low-priced services are expected to be developed and provided ; little and moderate-sized companies will be promoted ; and assorted companies including the authorities will take part in regional and international organisations through which they can widen cooperation among members. Competition will add to lower-cost and higher quality telecommunications merchandises and services.

The authorities besides restructured its Ministry of Communication ( MOC ) to chiefly supervise and steer the assorted telecommunications histrions every bit good as puting an overseeing telecommunications policies. Its duties of runing daily telecommunications concern was delegated to divide entities. ETRI has gone in front with globalisation of research and development. It has expanded and amalgamate technological concerted dealingss with both developed and developing states and established international joint research plans.

Liberalization has enabled KT to advance the domestic telecommunications industry by doing maximal usage of its procurement power. For illustration, KT has been put ining installations at the rate of 1 million telephone lines yearly since 1980, bring forthing a current sum of about 17 million lines. This investing has enabled KT to supply a stable market for local industries, and to assist them upgrade their merchandise quality by implementing such steps as demand prediction system and quality confidence system. All in all, the execution of its industrial policy reflects Korea & # 8217 ; s finding to accomplish a suited mix of high-quality labour-intensive traditional industries and skills-intensive heavy and chemical industries. Such a mix is regarded as leting Korea to thrive in the 1990 & # 8217 ; s among the developed or industrialised states that are traveling into hi-tech industry and information-intensive activities.

The Telephone Bond Law was enacted in December 1961 in order to raise the capital required for spread outing and bettering telecommunications installations ( MOC 143 ) . This jurisprudence was replaced by the Provisional Law for Developing Public Telecommunications Facilities in December 1979, which in bend was repealed in January 1988 when the demand for basic telecommunications installations was deemed satisfies.

Changing policies and substructures go manus in manus with a set of regulative reforms in the field of telecommunications. The construct of deregulating or liberalisation is based on the position that, in a free market, exchange between persons will take to an efficient or optimum allotment of resources.

E. Arnold and K. Guy province & # 8220 ; authorities intercession & # 8211 ; whether through ordinances, policies or R & A ; D ( research and development ) investings & # 8211 ; seems to be a regulation instead than the exclusion in the procedures of liberalisation, denationalizations and deregulation. & # 8221 ; Thus, they province that the engagement of the authorities is necessary to liberalise the telecommunication industry.

J. Browett agrees with Arnold and Guy saying that alterations in telecommunications in Korea can be said to hold been initiated and implemented by the authorities. An illustration given was that a policy was adopted by the authorities to upgrade the precedence of investing in telecommunications during the 5th Five-Year Economic Development Plan in 1982 to 1986. As a consequence, telecommunciations investing was increased from 3 % of entire national fixed assets in the 1970s to 7 % in the 1980s.

The Telecommunications Basic Law was mostly revised to promote all parties concerned to put in research and development into more sophisticated engineerings and more relevant socioeconomic policies in the extremely competitory telecommunications environment. KT has reinvested more than 50 % of its entire net incomes in the development of telecommunications installations. After being privatized, common bearers and operators in several states have tended to increase instead than diminish their duties to supply high-quality services, which require funding of hi-tech installations. However, it is besides deserving observing that Korea lowered its telephone revenue enhancement from 15 % to 10 % in conformity with the revised Telephone Tax Law in January 1988. The current duties for a local call have been fixed at 30 won ( about US $ 0.37 ) for both a subscriber & # 8217 ; s telephone and a public payphone per three proceedingss & # 8211 ; comparatively cheaper than the rates predominating in developed states. Owing to the debut of competition in international calls between KT and DACOM, moreover, the duty for international calls was reduced up to 3 % by DACOM and 7 % by KT. This information shows that denationalization can be the reply to effectual and low-cost telecommunication services.

He farther goes on to province that economic factors, which are intertwined with authorities policy, have besides influenced the debut of a decentralized or liberalized industry in Korea. The authorities is cognizant that growing can be achieved merely if Korea remains extremely competitory exporter and makes significant advancement in technological development. He believes that & # 8220 ; decentralized determination devising may go the most effectual agencies of accomplishing the efficient allotment of resources particularly in a quickly altering and extremely competitory telecommunications environment & # 8221 ; ( 800 ) . Competition between companies creates a concern environment of & # 8220 ; efficient resource direction and better entree to capital for investing so that the sector assumes its rightful cardinal function in the socio-economic developments to states ( 198 ) . & # 8221 ; Furthermore, fight can non be maximized under bureaucratic intercession. Therefore, liberalisation is an of import ingredient to come on in the telecommunications industry.

Harmonizing to R.M. Martin, & # 8220 ; liberalisation has made the defining of policy more pluralist, increased the range for lobbying by distributional alliances, and given direction inducements to germinate their ain schemes for acquisition of larger market portions & # 8221 ; ( 88 ) . Because companies are more free to work away from authorities ordinances, they are able to develop a more effectual telecommunication market. Liberalization or lessening in authorities control allows companies to freely research and develop their ain telecommunication merchandises. Through their acquisition of net incomes off from authorities control, companies have the inducement to bring forth better quality, lower cost merchandises and services.

Myung-Jung Kim besides supports liberalisation and denationalization of the telecommunications industry as in the broadcast medium industry. She advocates the private system saying that the new media industry is so huge in range that province or public organisation entirely is more than a lucifer for its investing demand. A private system should be adopted to bring on private capital and verve. From a corporation & # 8217 ; s standpoint it is a aureate chance for industries such as overseas telegram, orbiter, and production and distribution of plans. She goes farther to province that deregulating of plan content will be positively adopted to fulfill plan demand caused by the debut of multi-media and multi-channels.

Hyeon-Dew Kang states that authorities demands to cut down ordinances to pull investors in the broadcast medium industry. Besides public investing will do it possible to inflow tremendous capital, aid supplying sufficient plans, and supply direction accomplishments for runing broadcast medium system.

He farther states that it is & # 8220 ; necessary to guarantee diverse types of ownership under a flexible construction where it can unite one broadcast Stationss and others, broadcasters and telecommunicators, and newspapers and airing so as to run into the current tendency of globalising the broadcast medium industry & # 8221 ; ( 241 ) . In peculiar, it can assist get by with the gap tendencies of airing market by beef uping domestic corporates & # 8217 ; ruling places.

Friedland and Westlake besides advocate deregulating as the agencies to technological advancement in telecommunications. They province that & # 8220 ; deregulating & # 8211 ; a tendency that began in the mid-1980s & # 8211 ; could be critical to the success of national economic sciences & # 8230 ; Deregulation was supposed to present goods by furthering efficiency through competition & # 8221 ; ( 66 ) . They farther go on to state that liberalisation has taken root in South Korea and some local houses are already first participants. For authoritiess and the commercial operators, the basic issue is how to accomplish the most effectual signifier of competition. To this consequence, they quote a Washington based denationalization adviser, & # 8220 ; The general way is that you separate the regulative setup from the operation of the telephone system. Following, you corporatise the telephone system operator. The following measure is denationalization and the development of a net income outlook at the old operator. Finally, you license private common bearers or niche participants & # 8221 ; ( 67 ) . Therefore, the expert advocates that denationalization is the manner to healthy competition which leads to come on. In their publication, Friedland and Westlake illustrate states that have licensed 2nd bearers that have seen great betterment in service. Japan was an illustration of this success. Japan, the first Asiatic state to open its domestic long-distance market to competition, captured 22 % of the market from the established collectivist supplier to three private bearers. Because of this transportation to private bearers, rates on long distance calls have been cut five times since 1988, and are now around 60 % cheaper than when liberalisation began. They go on to province that the & # 8220 ; benefits of liberalisation, nevertheless, are non simply confined to the industry itself & # 8230 ; Better communications spur greater economic activity overall, which in bend produces farther growing in telecommunications & # 8221 ; ( 67 ) .


In the decennary after the development of the telegraph, the first telecommunication tool, Korea has quickly developed its telecommunications industry to go a serious rival to more developed states. The make up one’s minding factor to this decision, is the authorities policies which changed from an autocratic accountant to a more liberalized superintendent. Government policies became less regulative.

The turning point from a tight authorities control to a more liberalized industry began with the deputation of powers to the Korean Telecommunications Authority. This detached powers from one entity to two. Then the Korean Telecommunications Authority delegated powers to other companies as ETRI and other research and development companies. Then as clip went on, the authorities allowed private companies to fall in in the telecommunications industry. This liberalising action and deregulating led to the competition necessary for advancement.

Competition is the factor which invigorates engineering. It gives companies the ground to develop quality equipment and service at more low-cost monetary values to the populace in order to vie with other companies. Besides private companies are able to apportion their ain resources, alleviating the great load on the authorities. Liberalization and deregulating is the procedure which Korea & # 8217 ; s telecommunications industry underwent. I believe it is the factor which has brought Korea & # 8217 ; s telecommunications industry where it is today. Liberalization and deregulating agencies that the authorities had reduced its ordinances on telecommunications companies so that the industry looks attractive to perspective companies. It gives private companies an inducement to get down telecommunications concern to Korea. Therefore, these companies answer Korea & # 8217 ; s telecommunications jobs.

Korea is serves as an illustration of a state which underwent many alterations in telecommunications authorities policies. The relaxation of authorities reigns can be seen in the media sector. The great addition in newspapers and periodicals after June 29 1987 Declaration of & # 8220 ; freedom of the imperativeness & # 8221 ; serves to demo how deregulating can take to increase in production.

Korea still has a long manner to travel. Its sight on orbiters as an reply to telecommunications is still probationary. Although it has non yet caught up with the more developed states, it is filled with the telecommunication tools as beepers, cellular phones, and other value added services. Korea is dining on the telecommunications superhighway.

Arnold, E. & A ; K. Guy, Parallel Convergence: National Strategies in Information Technology. London, 1986.

Browett, J. & # 8220 ; The freshly industrializing states and extremist theories of development. & # 8221 ; World Development, V 13, P. 789 & # 8211 ; 803.

Chung, Son Jon. & # 8220 ; KoreaSat & # 8221 ; . Via Satellite. January 1994. P 66-67.

Friedlang, Jonathan & A ; Michael Westlake. & # 8220 ; Get the better ofing Barriers to Growth. & # 8221 ; Far Eastern Economic Review. July 1, 1993. P. 66-67.

Jeong, Young-Cheol An Introduction to Pacific Hemisphere Telecommunications. January 21, 1993. P.1-12.

Kang, Hyeon-Dew. Changing International Order in North-East Asia and Communications Policies. 1992.

Kim, Eun-Jung. Telecommunications development in the Republic of Korea. 1989.

Lee, Sang-Chul et. Al. Satellite, Television and Images in Korea. January 1988.

Martin, R.M. & # 8220 ; Pluralism and the new corporatism. & # 8221 ; Political Studies V XXXIL, 1983 P. 86 -102.

MOC, Annual Report. Seoul, 1991, P. 143 & # 8211 ; 144.

Morgan, Walter. & # 8220 ; What is the Asia Market? & # 8221 ; Satellite Communications. July 1995. P. 21

Seo, Jung Uck. Korean Strategies for a Digital World. P.26-42.

Seo, Jung Uck. Technological Autonomy in Korea Telecommunications. 1987. P153-56.

The Apt Yearbook. & # 8220 ; KoreaSat & # 8221 ; . P. 223-224.

The Apt Yearbook. & # 8220 ; Satellite Services & # 8221 ; . P. 337-340.

Won, Woo-Hyun. & # 8220 ; Communication Scene of Republic of Korea. & # 8221 ; Asia Communication Handbook. P. 215- 221.

Table of Contentss

Introduction 1

Chapter 1: History of Telecommunications 2

– Government Policies and Telecommunications Companies 3

– Consequences of Telecommunication & # 8217 ; s Research and Development 5

– Development of Different Systems to Widen Calling Lines 6

– Digitalization of Telecommunications 9

Chapter 2: Media 12

– Effectss of & # 8220 ; Freedom of Press & # 8221 ; 14

Chapter 3: Present State of Telecommunications in Korea 15

– Satellites 16

Chapter 4: Government Policies 19

– Business Sectors Open to Foreign Investment 21

– Requirements for Joint Ventures 24

– Protection of Technology 26

– Regulation of Public Service Providers 28

Chapter 5: Literature Review 30

Decision 37

An Overview of the Korean Telecommunications Industry

and its Liberization