South Korea’s Telecom and Pay-TV Services Set for Robust Growth, Forecasts GlobalData

GlobalData, a data and analytics company, anticipates a substantial upsurge in the revenue of telecom and pay-TV services in South Korea.
Pay-TV business South KoreaThe forecast predicts a CAGR of 10.3 percent between 2023 and 2028 in the revenue of telecom and pay-TV services in South Korea, primarily bolstered by an impressive expansion in the mobile data sector.

The mobile data service revenue in South Korea is slated to surge at an encouraging CAGR of 17.6 percent during the forecasted period. This surge is attributed to the burgeoning data usage and escalating subscriptions to the 5G network, resulting in a higher average revenue per user (ARPU) for mobile data, according to the insights unveiled in GlobalData’s South Korea Telecom Operators Country Intelligence Report.

While 4G services will command the lion’s share of mobile subscriptions at the start of 2023 in South Korea, a significant shift is predicted. The report foresees a stark decline in 4G subscriptions over the forecast period due to a mass migration of users towards the faster and more advanced 5G networks in South Korea.

Remarkably, the 5G network’s dominance is expected to soar, reaching an estimated 78.7 percent share by 2028 in South Korea. This upward trajectory is supported by robust initiatives undertaken by telecommunication companies and local authorities to expand and enhance 5G networks in South Korea. The South Korean government, for instance, aims to ensure nationwide 5G accessibility, even in remote regions, by the close of 2024.

However, in the fixed communication services domain, a different trend emerges. Revenue from voice services is anticipated to dwindle between 2023 and 2028 due to declining ARPU in fixed voice services and attrition in subscriptions for both voice over Internet Protocol (VoIP) and circuit-switched segments in South Korea. On the contrary, fixed broadband service revenue is set to experience marginal growth at a CAGR of 0.4 percent, primarily fueled by the adoption of FTTH/B services.

The growing clamor for high-speed broadband and concerted efforts to expand fiber-optic network infrastructure nationwide will propel the adoption of fiber broadband services in the coming years. The Korean Communications Commission (KCC) has set an ambitious target of achieving 100 percent FTTH (fiber-to-the-home) coverage by 2030, necessitating the expansion of fiber optic infrastructure into presently underserved rural and remote areas in South Korea.

Despite an overall uptick in pay-TV service revenue by a modest 0.6 percent CAGR during 2023-2028, this growth is tempered by a persistent decline in cable TV and DTH subscriptions. Yet, the steady rise in IPTV subscriptions acts as a balancing force, preventing further deterioration in total pay-TV revenue in South Korea.

In terms of market leadership, SK Telecom is poised to dominate the mobile services sector throughout the forecast period. Its strategy of discounted pricing, coupled with unlimited and shareable data plans, secures its prominence. Additionally, a focus on Machine-to-Machine (M2M) and Internet of Things (IoT) services targets enterprise opportunities, reinforcing its stronghold.

Meanwhile, KT is projected to lead the fixed voice, fixed broadband, and pay-TV segments in 2023. Its stronghold in the FTTH segment, paired with promotional fiber broadband plans linked to mobile or pay-TV services, cements its position in the fixed broadband market. Moreover, an emphasis on expanding its content library aims to drive subscription growth in the pay-TV services segment in South Korea.