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After 2 Rounds on Phone and TV, who will be the Winner of Round 3 (Home IoT)?
09/01/2015 | By Yun Sang-ho (crow@ddaily.co.kr)

  • Korean big 3 has just began a race in the IoT market
  • Construction and electronical industries can be a game changer  



Again, 'home' is about to be a game field for another fierce game among the big 3 network operators in Korea. First it was about telephone, then TV, and now it is the Internet of Things (IoT). We do not know who will win yet, but we DO know that this time the winner will probably take it all. The lock-in effect of the IoT is known much stronger and more powerful than any communication services or products that have been available so far. Before the real game, the big 3 have already had skirmishes with one another, competing in the B2C aftermarket.  


The big 3 are launching IoT service competitively, only a couple of months apart. First, SK Telecom launched the service in May, followed by LG U+ which started it in July. Now with KT scheduled to join the race in September, the three companies are all ready for the IoT battle. SK Telecom and LG U+ are focusing on strenthening of the ecosystem to reassure their preoccupancy in the market while KT are working on development of effective marketing strategies to stop the two competitors.


The main idea of all IoT services offered by the big 3 is that they allow users to monitor their homes, and control devices and settings at home by using smartphone apps. What's more interesting is that these services can be used regardless of their network operators. So far, SK Telecom's services have been more of device-centered, like boilers, gaslock system, etc. while LG U+'s have been more of home automation-centered, like window autolock, power control, etc.  


In order to be able to use IoT service, a user must sign up for the service, install the service app, and have a specific device or sensor with built-in communication feature at home. Both SK Telecom and LG U+ are aggressively promoting their services, offering promotional items or pricing. IoT service is expected to make our every day life a lot convenient and easy, for example, by letting us remotely close a window on a rainy day, or remotely turn on the heater or A/C while heading home.


So far, the winner of all games at 'home' has been KT, with the largest market shares in landline, ultra-high speed Internet and Internet TV (IPTV) services. Unfortunately, however, this did not help the company to thrive. The landline industry has already become a fading industry. And also, KT failed to take full advantage of its strength in ultra-high speed Internet and IPTV because of its declining market share in the wireless communication market. The company's outstanding performance at 'home' so far will not do much now.


IoT is a whole new market. All 3 companies are suffering declining profitability. Now, new market means new customers, and more money. What SK Telecom and LG U+ are trying to do now is take the lead in the race at 'home' by offering outperforming IoT services. At the same time, KT and LG U+ expect SK Telecom would become less dominant in the mobile communication market.


What we should note is that, in this race, a game changer is someone from outside the communication industry. Cooperation with the construction and/or electronical industries is the key to victory. In fact, the prototype of the IoT is home network service, which has originally been offered as standard amenities in apartment complexes. So, the IoT is nothing more than home network service combined with communication features.



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