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South Korean Key Regulatory Policy Update

According to Pyramid Research, the IT 389 Strategy enshrines the South Korean government's objective of creating an IT-based society, a plan that includes an outline of technologies to be developed in order to meet the goal.

The country�s telecoms regulator, the Ministry of Information and Communication (MIC), focuses heavily on policies to advance the IT389 strategy. As technologies develop, the regulator has begun to face a conundrum as the media and telecommunications spaces merge: broadcasting regulation is separate from telecommunications regulations and is regulated by the Korean Broadcasting Commission (KBC). However, the regulator has recognized that carriers� BcN is beginning to accelerate the convergence of the traditional telecom network and broadcasting spaces, and in answer to this trend has begun to study reforms to resolve issues that result from this trend.

In March 2006, a year after heavily fining mobile operators for illegal handset subsidies, the regulator has lifted this ban under the strict conditions that it be applied to existing consumers when they upgrade. Subsidies can be in the order of KRW50,000 (US$50) to KRW210,000 (US$210). The most stringent conditions under which both SK Telecom and KTF have interpreted this include allowing handset subsidies for customers that have been with carriers for 7�8 years. The new regulation includes WiBRO-enabled devices but not DMB-enabled handsets. This subsidy will impact the equipment market as it gives incentives to end-users to upgrade their existing devices and indirectly benefits WiBRO handset sales and service adoption. WiBRO is the homegrown mobile WiMAX and, as such, its performance will be scrutinized closely by critics of the technology standard.

The Korean Communications Commission (KCC), the competition watchdog of the telco industry, has declared that it will fine carriers who do not disconnect numbers associated with illegal spam use. This was the regulator�s response to an increasing number of consumer complaints on illegal spamming. Spamming is increasingly gaining importance as part of the regulator�s province to police, especially in countries where there is high adoption of mobile e-mail. In this case, the MIC has passed the burden of responsibility onto the carriers to ensure compliance.

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