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In Less Than A Decade, 60 Percent of Korean Homes Get Broadband
September 30, 2002 9:26pm
Sep. 29--SEOUL, South Korea Broadband is in the air here. And in coffee shops, game rooms, homes and shopping malls.
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While debates over the best way to spur high-speed Internet connections to the masses simmer in the United States, more than 60 percent of Korea's 14 million homes already have fat on-ramps to the information superhighway.
And when they leave home, Koreans can walk into more than 20,000 computer game rooms, or PC baangs, that blanket major cities here in 7-Eleven fashion.
"Korea has more hardware solutions than any other country," said Sang-chul Lee, the country's minister of information and communication. "People have three to four different companies to chose from, five to six different technologies to choose from. People get confused, but they don't complain about it."
Experts and industry officials are looking to the Korean broadband experience as a model to learn from. In less than a decade, the country has leapfrogged more advanced countries such as the United States, Japan and Sweden in wiring itself.
Koreans typically can subscribe to digital subscriber line, or DSL, service, cable modem service or fiber optics. They pay between $25 and $30 a month, about half of what Americans do.
But experts warn that unique cultural forces and economic dynamics are at work in Korea.
Technology and fashion fads tend to spread like wildfire in the country, which has a smaller land mass than Louisiana, said Andrew Eungi Kim, an assistant professor of Korean studies at Korea University.
"If one kid has something, other kids feel pressure to follow," Dr. Kim said. "It's more pronounced here because it's a group-oriented society."
Its densely packed cities, where people generally live in high-rise apartment buildings, are also easier to upgrade than sprawling American suburbs. More than 20 percent of the country's population lives in Seoul.
Korea's path toward broadband began in earnest soon after the Asian financial crisis started in Thailand in the summer of 1997.
In search of an economic savior, the country turned toward technology and in particular telecommunications.
The government invested in a nationwide fiber-optic backbone that connected local governments, schools and hospitals, said Mr. Lee, who was formerly president of the dominant telephone company, Korea Telecom.
Rural areas included "We connected 100 percent of our schools, we connected government units in very rural areas," Mr. Lee said.
"Government invested first and created the new market. That was the key to broadband. Then suddenly our [telephone companies] began to provide broadband."
In the meantime, a few entrepreneurs had begun setting up PC rooms in Seoul. Many had recently been laid off from the country's mega-conglomerates with decent severance packages.
They plowed that money into computers, high-speed connections and low-rent rooms tucked away behind restaurants and storefronts, said T.J. Kim, president and chief executive of NCsoft Corp., an online game company.
"Everyone wanted to be on the Internet and every newspaper announced that the Internet would be the future of business," he said.
Mr. Kim's firm owes much to the initial bet made by these entrepreneurs.
Young Koreans who frequented the rooms quickly became hooked to NCsoft's medieval role-playing game Lineage.
Many credit it, and others of its kind, for driving broadband growth. More mainstream services such as e-commerce, e-mail and newsgroups were also key.
Cultural differences But the Korean gaming experience might not be readily transferable to the United States.
Although Americans are die-hard gamers in their own right, they tend to play on consoles such as the Sony PlayStation 2 and Xbox by themselves or with a few friends.
Online PC games have a much smaller following in America.
Experts say newer consoles that can connect to the Internet and more sophisticated PC games will spur online gaming here, but it will take some time.
"Online will continue to become a bigger share of the business, but it's not going to radically change the future," said Joe Erickson, a partner for global games and gaming practice at Accenture.
Others say online games lag in the States because most Americans haven't experienced broadband.
"It's an infrastructure problem right now in the U.S.," said Sara Lee, chief executive of WebZen Corp., a Korean game company.
"You can't play with your friends through broadband, and that's why you want to play by yourself."
American phone and cable companies need to build the infrastructure before they can expect people to jump on the bandwagon, Ms. Lee said.
She also says the current U.S. debate over copyright protection is miscast, because the Internet is more than just a new distribution channel for movies and music.
New, more interesting online services will emerge as broadband becomes more pervasive and affordable.
"First you have to have fiber," Ms. Lee said. "Then you have to think about services."
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