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KOREA: Korean Internet population reaches 30 mil.

Korea's Internet population reached the 30-million-mark in the first half, with the penetration rate exceeding 68 percent just 10 years into commercialization

The Korea Herald
Wednesday, August 11, 2004

By Kim Tong-hyung

Korea's Internet population reached the 30-million-mark in the first half, with the penetration rate exceeding 68 percent just 10 years into commercialization, according to government figures released yesterday.

In annual research conducted through June by the Ministry of Information and Communication, 30.06 million people over six years of age accessed the Internet at least once a month. The report was based on a survey of 17,347 people from 7,030 households in 16 cities.

The penetration rate reached 68.2 percent, up 2.7 percent from the end of last year, resulting in an increase of 1.45 million Internet users. However, the growth rate continued to decline at 5 percent, down from 11.2 percent last year and 75.3 percent in 2000, with the market nearing saturation.

"Since the start of commercial services in 1994, the Internet population has been steadily increasing to a point where it is now nearing the penetration rate of mobile phones," said Paek Gi-hoon, director of the ministry's Internet Policy Division.

"Although the penetration rate is still rising, the average Korean spent fewer hours using the Internet compared to last year due to the implementation of the five-day workweek and sluggish economy," he added.

Paek said the ministry is considering increasing the budget to expand Internet use in low-income households.

According to the report, the average Internet user spent 11.5 hours per week in front of the monitor, a slight drop from last year's 12.2 hours. More than 86 percent of the users had an e-mail account and 45.2 percent were registered at online communities run by portal sites.

The penetration rate exceeded 95 percent for people in their teens and 20s, and reached 87 percent for people in their 30s, up 7.9 percent from last year. People in their 40s had a 58.3 percent penetration rate and the figure was 27.6 percent for those older than 50.

Penetration was greatest in the southern port city of Ulsan at 79.1 percent, followed by Gwangju at 76.3 percent and the Gyeonggi Province cities at 73.9 percent. Seoul had a 72.8 percent penetration rate. The midwestern regions of South Chungcheong and South Jeolla put up the lowest penetration rates in the nation at below 55 percent.

More than 73 percent of users picked data searches as their primary online activity, followed by computer games at 54 percent and e-mail access at 33 percent.

About 14 percent of the respondents said they shopped online and 26 percent said they took advantage of online banking.

However, the use of paid services remained relatively low, with only 18.9 percent of users saying they pay for content. More than 65 percent of the respondents said they have a negative view of the expansion of paid services.

More than 84 percent of the surveyed households used digital subscriber lines (xDSL) for Internet access, while 11.6 percent used cable and 2.4 percent used fixed-line modems.

The Communication Ministry announced on Monday that by the end of this month it will grant licenses for trial operations of the broadband convergence network (BcN), designed to provide Internet access at speeds of 50Mbps to 100Mbps with nationwide coverage.

The government hopes to attract 67 trillion won ($58 billion) in investment for BcN, which officials believe will generate 111 trillion won in equipment sales and $50 billion in exports by 2010, while covering more than 20 million domestic households.

Commercial Internet services first started in 1994, with local fixed-line carriers KT Corp. and Dacom Corp. being given licenses. The Internet population reached 10 million in 1999, with newcomer Hanarotelecom Inc. adding to the competition, and exceeded 20 million in 2001.

KT, which controls more than 95 percent of the local fixed-line market and 51 percent of the broadband Internet market, reported 11.6 trillion won in revenue and 830 billion won in net income for 2003. Hanarotelecom is now the No. 2 broadband carrier with a 24 percent market share.

When applying the standards of the International Telecommunication Union, which sets the penetration rate in Internet subscribers per population, Korea's rate is adjusted to 63.3 percent, the third-highest in the world behind Iceland's 67.5 percent and Sweden's 63.8 percent.

Asia Institute