Based on analysis of earlier technology migrations in the country, Wireless Intelligence forecasts that it will take around 35 months on average for the three South Korean operators to migrate at least 50 percent of their respective subscribers to LTE. Market-leader SK Telecom and third-placed LG UPlus launched LTE in July 2011, while second-placed KT switched on LTE last week.
All three operators should achieve nationwide LTE coverage by mid-2012 with Voice-over-LTE (VoLTE) expected to be introduced in the second half of the year.
SK hit 500,000 LTE connections just four months after launch, while KT has set an ambitious target of 4 million LTE subscribers by the end of this year. Wireless Intelligence predicts that South Korea will cross the 40 million LTE connections mark by mid-2016.
The pace of LTE migration in South Korea will surpass neighbouring Japan, and could occur twice as fast as in Western Europe, the firm says, following the trends previously seen when operators migrated to 2G and 3G technologies.
According to Wireless Intelligence, it took SK and KT just 18 months to migrate at least 50 percent of their customers to HSPA. It had previously taken the two operators 21 months and 39 months, respectively, to migrate at least half of customers to CDMA2000 1x - which operators are now looking to shut down to free up spectrum for LTE use. In the case of LG UPlus, it took 30 months to migrate half of its IS-95 base to CDMA2000 1x, while next generation EV-DO (Rev. A/B) currently represents about 40 percent of the operator's total connections.
Subscriber migration onto these new network technologies was significantly slower at the Japanese operators. It took Docomo and SoftBank 57 months and 54 months, respectively, to move half of their subscribers onto HSPA, while CDMA-based KDDI took 39 months to migrate half its base to EV-DO.
By contrast to the two highly advanced Asian markets, it has taken Western European operators almost a decade to achieve 50 percent 3G penetration, a milestone not expected to be reached until Q3 this year.
Wireless Intelligence points to a number of factors that has expedited technology migrations in South Korea, including a predominantly contract (rather than prepaid) customer base, high smartphone penetration, fast handset replacement cycles and the widespread adoption of NFC and vertical mobile services such as financial services and health.
Rapidly rising smartphone penetration was a key trend identified in the market in 2011. The KCC, the South Korean regulator, said recently that the country passed 20 million smartphone subscribers in Ocotober 2011. According to Wireless Intelligence, this would give the country a total smartphone penetration rate of close to 40 percent. The KCC also noted last year that Wireless Internet Connections (defined as any cellular device capable of accessing data - not just smartphones) accounted for 92 percent of the country's total connections base in Q2 2011.