Telecommunications and Informatization in South Korea

Networks and Communication Studies NETCOM, vol. 16, n 1-2, 2002 p. 29-42 Telecommunications and Informatization in South Korea Sung-Hye Cho 1 Abstract. This article provides a better understanding of Korean telecommunications and informatization 2 progress. For that purpose, it focuses on accounting for the development of telecommunications and the level of informatization in Korea. Firstly, it describes the historical development for 115 years after the introduction of modern electrical telecommunication. Secondly, it presents the data for telephones, PCs and high-speed communication networks in order to show the situation of infrastructure for information and telecommunications. Thirdly, it shows the use and characteristics of the telecommunications infrastructure, coving major topics like PC online, Internet, e- business transactions. Finally, for the information technology employment and the level of informatization, this study presents the employment in information and telecommunication companies, characteristics of users of information and telecommunications, and other information indices. Keywords. Korea, Telecommunications, Telephone, Computers, Internet, Electronic commerce, Informatization Résumé. Cet article propose une meilleure compréhension des télécommunications coréennes (Corée du Sud) et des progrès de l informatisation. Mots clés. Corée, Télécommunications, Téléphone, Ordinateurs, Internet, Commerce électronique, Informatisation 1. Lecturer, Department of Geography, College of Social Sciences, Seoul National University. Address: # 207-501 Mokdong Shinsigaji Apt., Mok 6-dong, Yangchon-gu, Seoul, Korea. E-Mail: pupamin@chollian.net. In the light of summarizing the IGU Commission on Communication Networks and Telecommunication Annual Conference held in Kwangju, Korea in 2000, Henry Bakis, chairman of the Commission, who believed that it was necessary to introduce the telecommunication environment of Korea, requested Professor Woo-kung Huh, a Korean local organizer, to submit A Synthesis Paper on Telecommunication, ITC in Korea. As one of the Korean Members, I present this article and hope to help the Commission members to understand information and telecommunications development in Korea. 2. Informatization is defined as the social and economic environment in which information becomes a core resource to be processed and manipulated, so that it helps the society and economy develop. In order to compare the national informatized level with those of other countries, Korea has used several figures: PC provision for computer, numbers of telephone lines and users of mobile phones for communication, numbers of registered TVs and CATV subscribers for broadcasting, and numbers of internet hosts and internet users for internet.

30 NETCOM, vol. 16, n 1-2, 2002 1. INTRODUCTION Koreans have realized that strengthening the nation s competitiveness through the achievement of a knowledge-based economy is the most urgent issue in order to overcome the recent economic crisis and to make another economic leap forward. As a result, the government has tried to establish the critical foundation of a knowledge-based economy. The government has also prepared a blueprint of an information society so that the government, businesses and individuals can use better information networks and technology so that the productivity and transparency of the system can be promoted. In the 1990s, the government considered the information industry as a national strategic one and, through various policies, it tried to expand the demand base and supply capacity of the industry in both domestic and international markets. By these efforts for informatization at the national level, it also aims to reach the level of the developed countries in the 21 st century. This paper aims to gain a better understanding of the development of the telecommunications and informatization level in Korea and is organized as follows : Firstly, it describes the historical development of Korean telecommunications. Secondly, it investigates the building process of information and telecommunication infrastructure. Thirdly, it explains characteristics of the infrastructure and how it is used. Finally, it discusses about information technology users and overall informatization level in Korea. 2. HISTORY OF KOREAN TELECOMMUNICATIONS In 1442 the beacon fire system was established to send messages in Chosun Dynasty (torchlight system). The torchlight system during this era differentiated the state of affairs into 5 levels. The relay points, torchlight line facilities, and all related laws during the period became the basis for all torchlight systems that followed. Recognized as the roots of modern communications, the torchlight system s pulses conversion methods and networks are similar to today s system, especially the locations of the torchlights are concurrent with the locations of today s microwave transmission points. Modern telecommunications in Korea began with the opening of telegraph service between Seoul and Inchon on October 28 th, 1885. It was based on Chinese characters and did not handle Hangul (genuine Korean characters) telegraphs, since the line was primarily for Chinese Qing Dynasty s use. Therefore, the actual usage was pretty minimal. At this time, Korea, however, faced a new turning point in its development with the establishment of telegraph lines between Seoul and Uiju (West Line), Seoul and Pusan (South Line) and Seoul and Wonsan (North Line). In 1886, the first telephone was installed in the royal palace and used on a trial basis. In 1896, a magnetic telephone exchange was installed in the palace, making telephone service available to more people. In 1900, a department was

TELECOMMUNICATIONS AND INFORMATIZATION IN SOUTH KOREA 31 established within the Ministry of Communications to manage telegraph operations and postal service more systematically. Since then, the telegraph industry grew leaps and bounds, and the income from the business grew above expectations. In 1902, telephone service for public use was initiated between Seoul and Inchon. When Korea became a protectorate of Japan in 1905, Japan set up various communication facilities in Korea including a common-battery switchboard in 1908, a wireless telegraph between Kwanjeho and Wolmido in Inchon in 1910, and an automatic switchboard in 1935. Wolmido s wireless telegraph office acted as the relay point for ships in the Yellow Sea and also performed special tasks such as weather forecasting, coastal defense, and coastal rescue operations With Japan s defeat in World War II, Korea was liberated from Japanese colonial rule. The Korean government endeavored to get communications back to normal. However, Korea s communications facilities suffered much destruction during the Korean War (1950-1953). With the help of many foreign countries, the government finally rebuilt the nation s communications infrastructure. In the 1960s, the Korean government incorporated the development of the telecommunication industry in its national economic development plan. Korea also opened a new era of satellite communications by setting up two ground stations for satellite communications. Furthermore, with the establishment of the microwave backbone network and the coaxial carrier transmission facility between Seoul and Pusan installed in 1975, Korea secured dual domestic long-distance communications networks. Korea s rapid economic development led to the rapid increase in telephone demand. This required the expansion of facilities as well as the efficient management for telecommunications. To cope with the situation, Korea Telecom was established in 1981. Within five years after its establishment, Korea Telecom completed a long-distance digital switching network and the automation of all telephone lines. Korea Telecom also developed a large capacity electromagnetic switching system called TDX-10. Telecommunication services in Korea by then were monopolized by the Korean government. In the beginning of 1980, however, Korea Telecom was separated from the Ministry of Information and Communication and became in charge of telephone services exclusively. In 1982 private-led Korea Data Telecom was founded and it started to provide a service of value-added network (VAN) to support and develop the information industry. Korea Mobile Telecommunication Co. (now SK Telecom) then became independent in 1984. In addition, DACOM and Korea Telecom Powertel (Korea Trunked Radio System, Korea TRS) were founded for other services. In order to promote research and technological development in telecommunication during this period, Electronics and Telecommunications Research Institute (http://www.etri.re.kr), Korea Information Society Development Institute (http://www.kisdi.re.kr), National Computerization Agency (http://www.nca.or.kr), and Information Culture Center of Korea

32 NETCOM, vol. 16, n 1-2, 2002 (http://www.icc.or.kr) were established. These recent rapid advances in information technologies have brought fundamental changes to the monopolized electric telecommunication business. By meeting the demand for telephone services and achieving its automation, Korean telecommunication services achieved a smooth transition from a quantity, growth-oriented management system to a quality-oriented competition system. Since 1990 the government made efforts to foster the environment that facilitates fair competition in information services in order to strengthen Korea s competitiveness and improve its service level to those of developed countries. It was believed that this could be achieved by the improvement of high-quality telecommunication services as well as price reduction. There were several factors which made the rapid growth of information and telecommunication industry in 1990s possible. Firstly, the Korean government relaxed the regulations governing the telephone industry and improved the telephone systems, which stimulate the competitive environment for telecommunication providers. Secondly, related to the first factor above, the demand for information and telecommunication expanded dramatically in the 1990s; and this has led to the provision of cheaper and better telecommunication equipment. Finally, the government issued various guidelines for the IT industry on strategic purpose, which encouraged the growth of demand and the expansion of supply capacity, including connections with new foreign markets. In the meantime, Korea opened its own satellite communication and broadcasting era with the launching of the Koreasat Moogoonghwa I and Moogoonghwa II in 1996, and Moogoonghwa III in 1999. As a result, Korea Telecom was also able to provide Internet services for the first time via its own satellites. 3. INFORMATION AND TELECOMMUNICATION INFRASTRUCTURE 1) Telephones The Korean government considered telephone facility as the core to provide various additional telecommunication services as well as to meet basic communication demand for the general public. Since the 1980s, the government has attempted to enhance advanced telecommunication services and to improve electric communication facilities to lay the foundation of an information society. The government has installed more than a million lines every year since 1982. With the number of telephone lines exceeding 10 millions in 1987, Korea opened the era of one telephone per one household. As nationwide automatic telephone switching networks were completed and other facilities have been developed continuously, Korea achieved two telephones per one household in 1998 and became one of the top ten countries in retaining advanced telephone facilities in the world (Table 1).

TELECOMMUNICATIONS AND INFORMATIZATION IN SOUTH KOREA 33 Classification 1983 1985 1988 1990 1993 1995 1998 Facilities (thousand lines) 5,337 7,538 11,239 15,293 20,141 21,684 24,488 Subscribers (thousand) 4,810 6,517 10,306 13,276 16,633 18,600 20,114 Per 100 Inhabitants 12.0 15.8 24.6 31.0 37.8 41.5 43.7 Leased Line Subscribers 382,859 511,520 595,134 Table 1. Telephones (Source: 1988, Telecommunication of Korea, Ministry of Communication. 1993, Telecommunication statistics, Korea Information Society Development Institute. 1998, 1999, White Paper, Ministry of Information and Communication). Leased line service commenced with voice services in 1962 and expanded its service to the data transmission in 1977. As data service demand increased, its market began to be served by both Korea Telecom and DACOM. Since then, the rapid shift from wired and voice services to wireless and data services as well as large demand for high-speed leased line services changed the overall utilization patterns of leased line services. New service providers finally promoted the establishment of a competitive market structure among the telecommunication business in 1998. New services of both paging and car-phone were introduced in 1982 and 1984, respectively. Table 2 shows the rapid growth in mobile phone business. Especially, since satellite multimedia service was initiated with the land/satellite network, the network improved the speed of conventional Internet services and provided simultaneous transmission of the data. Nowadays various mobile communication services are provided such as Personal Communications Services (PCS), wireless data transfer services, calling-only mobile telephone service, trunked radio system (TRS) service, satellite mobile communication services as well as conventional cellular services and wireless pager. Mobile phone services are provided by two companies SK Telecom and Shinsegi Communication Inc. and PCS services (introduced in 1997) are provided by three providers including LG Telecom, Korea Telecom Freetel, and Hansol PCS. These markets are considered very competitive. Mobile communication users increased to about 14 million including cellular service and PCS subscribers. Whereas the growth of PCS is expected to continue for a while, wireless paging and call-only mobile phone service are now decreasing. Classification 1987 1990 1993 1995 1998 Facilities (thousand) 10 135 785 2,150 17,615 Subscribers (thousand) 10 80 472 1,641 14,070 Per 100 Inhabitants 0.02 0.19 1.1 3.7 30.1 Table 2. Mobile Phones (Cellular and PCS) (Source: 1993, Telecommunication statistics, Korea Information Society Development Institute. 1998, 1999, White Paper, Ministry of Information and Communication).

34 NETCOM, vol. 16, n 1-2, 2002 Classification Household Business Public Total Total 12,239,169 284,414 883 486 below 1,621,391 897,626 109,827 2,628,844 Pentium 2,178,828 1,673,647 439,060 4,291,535 Pentium II & over 302,857 232,637 61,029 596,523 Notebook Computer 291,098 294,518 15,785 601,402 Others 87,766 52,997 10,404 151,167 Total 4,481,940 3,151,425 636,106 8,269,471 Table 3. Provision of Personal Computers (Source: http://stat.nca.or.kr/ Dec. 1998) 2) Personal Computer (PC) Computers as the core element of an information society are continuously spreading in the government, businesses and households sectors. According to the data from the Korea Information Culture Center, household possession of PC was only 11 percent in 1990, but it has increased to 20.7 percent in 1994 and 44.5 percent in 1998. In other words, about half of the households in Korea own PCs. For the type of PCs owned by the households, the largest number of the households own pentium-class PCs, showing the general provision of high-level computers (Table 3). In terms of network connectivity, in the meantime, modem connection turned out to be the largest in both the household and business sectors. Business sector also has relatively large share of LAN connection. In the public sector, LAN connection is dominant and modem use turned out to be minimal (Table 4). 3) High-speed communication networks As informatization becomes an essential element for the nation s competitiveness, the Korean government planned to establish the high-speed communication network as a basic infrastructure for an advanced information society in 1994 and also announced the Korea Information Infrastructure (KII) Project in 1995. The first stage of this project was completed in 1995-1997 and the Classification Household Business Public Total Total 4,385,500 284,414 883 4,670,797 Provision of PC with Dialup Connection 2,712,912 203,820 532 2,917,264 Total # of PC with Dialup Connection 2,780,658 1,166,732 23,210 3,970,601 Provision of PC with LAN Connection - 128,587 856 129,443 Total # of PC with LAN Connection - 2,997,841 561,279 3,559,120 Table 4. Provision of Personal Computers with Network Connection (Source: http://stat.nca.or.kr/ Dec. 1998)

TELECOMMUNICATIONS AND INFORMATIZATION IN SOUTH KOREA 35 Classification Government Education Research Medical Other Total % # of Institutions 13,280 2,916 153 565 1,750 18,664 100.0 Leased lines 19,496 1,599 220 564 1,363 23,242 73.7 Packet 4,235 28 9 5 223 4,500 14.2 Frame relay 486 46 2-473 1,007 3.2 Internet 244 2,370 60 23 105 2,802 8.9 Total 24,461 4,043 291 592 2,164 31,551 100.0 Table 5. High-speed National Backbone Network Service (Source: 1999, White Paper, National Computerization Agency) government planned to complete the second stage by 2002. It aims to complete the entire project by 2010. Korea Information Infrastructure (KII) Project is focused on constructing three different networks: fiber optic backbone network, high-speed public network, and test-bed network. Fiber optic backbone network refers to the high capacity optic cables connecting major cities and middle- to small-sized cities in order to create an environment where governments, research institutes and schools can access to various information and multimedia services at a low cost. Highspeed public network is funded and planned by the private sector to promote the use of high-speed telecommunication services. The test-bed network is funded and led by the government to rapidly establish a high-speed information network and to ease the burden of high cost for the private sector. Now 80 major cities are connected to the fiber optic backbone network and various information and multimedia services are provided to central and local governments, research institutes and education centers through this network at low costs. The number of institutes using high-speed information network reached 18,664 including national organizations, local governments, schools and research institutes by March of 1999 (Table 5). 4. THE USE OF INFORMATION AND COMMUNICATIONS 1) PC Online PC online (consumer online service) is an exchange of the information by more than two computers through phone lines or communication networks. PC online, a term originated in Korea, was first called videotex whose main purpose was to search necessary information. In the early 1990s, it is finally called PC online, which provides various services including useful both general and specialty information, e-mail, online conference, chatting, bulletin board, hobby group and public debates leading to the information exchanges between subscribers and the building of public opinions. Korean companies that provide PC online services include Chollian of DACOM, Hitel of Hankuk PC Telecommunication, Nownuri of

36 NETCOM, vol. 16, n 1-2, 2002 Classification 1993 1994 1995 1996 1997 1998 Subscribers 216,192 427,622 718,188 1,711,103 3,117,553 4,779,681 Providers 4 4 32 190 257 768 Table 6. PC Online Services (Source: 1999, White Paper, Ministry of Information and Communication) Nowcom, Unitel of Samsung Data System. The competition between them is believed to be very high. The number of subscribers was once 200,000 in 1993 and rapidly increased to 1.7 million in 1996 and 4.8 million in 1998 (Table 6). 2) Internet Internet use has grown in a dramatic way and resulted in the expansion in terms of the share and scope of Internet-related businesses for the whole economy. The reasons behind the growth of Internet use are considered to be the increase of both data communication and e-commerce. Internet providers were only six in 1994 and 11 in 1995 and the number has increased and reached 16 and 22 in 1996 and 1998 respectively. In addition, the numbers of domains and hosts have also rapidly increased. Especially the domains have increased incredibly since 1993, showing a record of more than 300 percent growth every year. Internet users in Korea also grew rapidly from 138,000 in 1994 to 1.6 million and 3.1 million in 1997 and 1998 respectively (Table 7). Tele-banking via phone, PC online and the business-to-customers Internet services were first introduced for the business in 1987. Moreover, the customeroriented home-banking finally began to be provided during the mid-1990s. Through tele-banking, people can receive financial services such as balance inquiry, money transfer, deposit and withdrawal, accident report, exchange rate information, and transaction statement report. 3) Electronic commerce E-commerce is a new type of marketing of services and products that utilizes the Internet based on the web and its browser that was developed in the early Classification 1993 1994 1995 1996 1997 1998 Internet Users (thousand) - 138 366 731 1,634 3,103 Internet Hosts 7,650 14,681 38,644 73,194 131,005 192,402 Internet Domains 47 192 563 2,664 8,045 32,218 Internet Service Providers 3 6 11 16 21 26 Table 7. Internet Hosts, Domains, Service Providers and Users (Source: 1999, White Paper, Ministry of Information and Communication)

TELECOMMUNICATIONS AND INFORMATIZATION IN SOUTH KOREA 37 1990s. Through the Internet and PC, consumers are able to participate in electronic commerce. As a result, e-commerce between business and customers through the Internet has attracted world-wide attention. Since the Internet becomes a new innovative mode of economic activities in Korea, traditional business turns to the Internet and thereby a new mode of business began to emerge. But this electronic market based on the Internet is still in an early stage of development and the future of e-commerce is still in flux. Commercial use of open global network through the Internet and information technology can reduce transactions costs such as search and mediation costs. As a result, new forms of mediation between producers and consumers come into being in the electronic market, whereas traditional ones begin to disappear. In general, electronic transactions of Korea can be divided into two types : business-to-consumer transactions and business-to-business (government-business transactions included). (1) Business-to-consumer e-transaction Through the development of Internet-based business, business-to-consumer transaction activities are now rapidly on the rise. Before the Internet is used as a mode of commercial transactions, PC Online s such as Chollian and Hitel based on proprietary network provided online shopping services. But the Internet-based commercial transaction created various shopping services. Towards the end of 1996, Interpark of DACOM and Lotte Department Store started services of cybershopping mall, which amounted to 17 in 1997. These cyber-shopping malls have developed into diversified forms of e-transaction for customers and they prove to be commercially feasible. Consumer-oriented e-transaction market began to take off through active entry and exit and the number of the active businesses are estimated as 357 in 1998 and 226 in 1999. E-commerce market is now expected to grow through various efforts such as growing consumer recognition, spreading technological base and institution buildings in additions to the businesses. (2) Business-to-business (B-to-B) electronic transactions B-to-B transaction in Korea was first introduced by Pohang Steel Company in 1987 when they used an Electronic Data Interchange (EDI) in their business transactions. Later EDI began to be widely used in international trade, transport, medical services and procurement system and up to now became a major form of B-to-B transaction. But the newly expanded Internet use gave a birth to a new form of B-to-B transactions. B-to-B transactions have increasingly used the Internet and now have various forms of export and import brokerage and electronic supply system. This can be seen as an open electronic market in which any business can participate. In the meantime, more closed market transactions between specific businesses like supply network management and just-in-time (JIT) production have increasingly adopted to the Internet-based forms rather than EDI. Many, especially larger companies, attempt to

38 NETCOM, vol. 16, n 1-2, 2002 consolidate the internal information system by using the Internet. They then extend this intranet to their partners to form an extranet and use it as a solution to integrate value chains between businesses. While traditional EDI was mainly restricted to larger companies due to high costs and technical difficulty, the use of the web can makes it possible for medium- and small-sized businesses to adopt EDI at lower costs. Export and import brokerage is a type of e-commerce providing an electronic market between multi-business and multi-consumers. Its sites began to increase since 1998 and now they are divided to two types: brokerage by the third party of the transaction and by trading companies. E-supply system is a globalized purchasing model that is usually suitable to governments and large companies with a huge purchasing capacity. It also ensures higher cost savings. In Korea, under the supervision of the Public Procurement Services, e-transactions to governmental purchasing was initiated in 1997 and are expected to operate in a full scale in 2001. In the private sector, Samsung Electronics, Inc. and Hyundai MOBIS, and other large companies announced their plans to introduce the Internet-based purchasing system in 1999. Their purchasing systems are based on the Internet, whereas governmental system mentioned above is based upon the EDI. 5. HUMAN RESOURCES IN INFORMATION AND COMMUNICATIONS 1) Employment of Information and communications Companies In 1990s the government carried out various policies and gave full support to develop the information communication industry as the nation s strategic industry. The government made efforts to enlarge the demand base and supply capacity of the industry and to create and activate the domestic and global market. As result of this, the gross production of the information and communication industry increased by 4.9 times during the 1991-1998 period and its share of gross domestic product in Korea also grew from 7.2 percent in 1991 to 19.6 percent in 1998. Total employment in the industry expanded from 317,797 in 1994 to 548,490 in 1997. In other words, 230,000 new jobs were created. Recently, however, the industry suffered financial crisis and its total employment accordingly declined to 506,568 (Table 8). Classification 1994 1995 1996 1997 1998 Service Provider 98,547 107,804 122,980 133,323 120,335 Manufacturer 197,180 256,109 354,582 373,735 347,736 S/W & Computer-related Service 22,070 31,574 38,338 41,432 38,497 Total 317,797 395,487 515,900 548,490 506,568 Table 8. Employment of Information and Communications Companies (Source: 1999, White Paper, Ministry of Information and Communication)

TELECOMMUNICATIONS AND INFORMATIZATION IN SOUTH KOREA 39 Household Business Public Classification Users Per 100 persons Total surveyed 31,826,392 6,865,172 534,786 PC users 12,100,114 26.06 4,773,853 PC frequent users 8,825,272 19.01 3,764,899 514,719 Internet users 5,712,095 12.3 2,486,675 502,631 PC & internet users 4,716,360 10.16 2,023,649 487,956 Email users 1,782,689 3.84 1,274,861 410,041 Advanced information users 602,730 1.3 478,644 119,480 Table 9. Information Users (Source: http://stat.nca.or.kr/ Dec. 1998) 2) User of Information and Communications Table 9 presents the characteristics of the information users in Korea. PC users are the people who have experiences in using the PCs by the time of July 1997. It turned out to be 26.06 per 100 people. Frequent PC users are those who used PCs for more than an hour a day. The number was 19.01 per 100 people in 1997. Lastly, PC and internet users refer to frequent PC users who used the internet for more than an hour a day. The number was 4,716, 360 or 10 per 100 people. In the meantime, frequent e-mail users that are PC and Internet users who send or receive an e-mail more than once a day. The number was 4 per 100 people. Finally high-end information users refer to frequent e-mail users who have created and maintained their Internet homepages. The number was 602,730 or only one per 100 people. Both the business sector and public sector perform better than the household sector in terms of information use. 6. LEVEL OF INFORMATIZATION IN KOREA Table 10 presents the degree of informatization in Korea during the 1990-1997 period. The informatization index is a term designed to measure the degree of informatization and takes into account several significant items and activities related to informatization and its progress including information facilities, information usage and information population. Table 10 shows the change of the informatization indices for different modes of telecommunication by using 1995 as the base year, that is, the indices for 1995 are 100. For the changes of index for each item, the index for the Internet shows the highest growth rate for Korea as well as all other countries (Table 11). The index for computer has in general increased constantly, but PC provision in 1997 was 15.7 per 100 persons in Korea. This was lower than the average of 27.11 for all countries. The index for

40 NETCOM, vol. 16, n 1-2, 2002 Classification 1990 1991 1992 1993 1994 1995 1996 1997 Growth Growth rate 1 (%) rate 2 (%) PC provision 34.55 42.04 52.73 63.49 80.22 100.00 122.26 139.91 22 16 Telephone 75.07 81.33 85.89 90.69 95.39 100.00 104.34 107.64 5 3 Cellular & PCS 5.13 10.51 16.97 29.06 58.83 100.00 191.92 412.80 87 43 CATV - - - 67.40 77.45 100.00 90.07 100.46 10 7 Internet hosts - 5.34 12.38 30.99 61.93 100.00 223.89 407.92 106 81 Internet users - - - - 62.06 100.00 230.54 536.18 105 79 Overall 29.11 38.94 54.07 76.58 100.00 141.06 204.46 38 28 Table 10. Informatization Index (Source: 1999, National Informatization White Paper, National Computerization Agency. 1. calculated as an annual average growth rate between 1990 and 1997. 2. calculated as average growth rate for the countries compared) telecommunication in Korea, in the meantime, turned out to grow more rapidly than other countries. It was mainly due to the better provision of personal mobile telephone services, especially after 1996. CATV, indicating the informatization for broadcasting services, is a new type of service and has become more widespread in Korea. But the data also indicate that its provision is at the early stage. According to the Internet index based on the number of hosts, Korea grew more than twice every year during the 1990-1997 period at the average of 106 percent. However, the number of hosts per 1,000 persons in 1997 was only 2.65 compared to the average of 31.39 for all countries. Internet user began to increase after 1994 and its average growth rate was as high as 105 percent, a rate similar to that of Japan, Singapore and Taiwan that joined the Internet world rather late. Table 11 shows a comprehensive picture of information use for both advanced countries and countries of similar economic development levels as Korea. For the sake of comparison, Korea s use of information was set as 100 and all countries included in this table include several advanced countries such as US, Canada, Australia, Japan, Britain, France, Germany, Finland and Norway and also the Asian newly developing countries such as Taiwan and Singapore. The growth rate in Korea for information use is 38 percent in the 1990-1997 period. This is far higher than the average of 28 percent for total countries. In 1991, the average index of information use for all countries was 102.61, whereas the value of Korea was only 29.11 or 28 percent of the average. In 1997, the overall average for all countries was 451.59 but the index of Korea has increased rapidly and reached 204.46 or 45 percent of overall average in information use. This reflects that there have been more investment in informatization and its related activities in Korea.

TELECOMMUNICATIONS AND INFORMATIZATION IN SOUTH KOREA 41 Country 1990 1991 1992 1993 1994 1995 1996 1997 Growth rate (90-97, %) Australia - 145.95 188.66 223.51 286.72 399.13 435.87 519.70 24 Canada - 130.42 161.81 193.91 248.50 318.34 384.63 460.39 23 Finland 103.19 147.12 175.64 216.23 279.55 437.85 538.86 664.93 30 France 42.35 57.16 71.88 92.48 110.45 133.40 164.83 211.83 26 Germany 48.83 69.87 89.87 114.55 143.13 198.23 246.53 308.87 30 G. Britain 33.42 65.13 95.50 127.48 176.72 237.62 289.45 350.13 40 Japan - 46.26 61.32 75.35 102.27 163.88 279.80 373.65 42 Korea - 29.11 38.94 54.07 76.58 100.00 141.06 204.46 38 Norway - 148.41 185.54 227.79 299.03 397.48 504.20 647.14 28 Singapore - 71.39 102.71 133.55 172.74 240.29 305.89 456.02 36 Taiwan - 36.74 57.76 71.43 90.05 115.64 137.58 214.76 34 USA - 181.46 222.54 267.63 347.59 441.84 540.24 675.70 24 Average - 102.61 128.78 158.44 205.22 282.15 353.69 451.59 28 6. CONCLUSION Table 11. Informatization Index by Country (Source: 1999, National Informatization White Paper, National Computerization Agency) Korean telecommunication began with the introduction of telegraph service in 1885 and it has a history of about 115 years since then. Under Japanese occupation, its development fell behind. However, its development has accelerated after the Emancipation in 1945 and the Reconstruction period after the Korean War (1950-1953). By virtue of the proper government policies and their consistent implementation, and the large inflows of investment resources in R&D from the business sector, academia and research institutes after the 1980s, remarkable progress has been achieved. Recently, the Koreans have begun to realize that in order to overcome economic crisis and secure the foundation of another economic take-off, it is essential to sustain national strength through developing a knowledge-based economy. Telecommunications and informatization have become an important strategy for securing survival and a better life. The government, business sector and the intellectuals in the Korean society have focused on the development of the information industries and the informatization of the society as a whole in order to strengthen national competitiveness and to prepare for the newly emerging information world at the global scale. But in the meantime, there has also been an increasing concern about the digital divide brought about by informatization. Information inequality based on gender, social status, educational level and urban-rural divide is one of the major social problems in Korea and, accordingly, it needs to be properly addressed in the near future.

42 NETCOM, vol. 16, n 1-2, 2002 REFERENCE JEONG Bu-Yeon (2000). Business-to-business electronic transactions: overview and changing trends. Information and Communication Policy, 12 (7), p. 19-38. MINISTRY OF COMMUNICATION (1988). Telecommunication of Korea. Seoul, Korea. KOREA INFORMATION CULTURE CENTER (1997). Special issue on national informatization policy. Ways to Informatization, n 1. MINISTRY OF INFORMATION AND TELECOMMUNICATION (1999). Annual Report on Information and Telecommunication. Seoul, Korea. MINISTRY OF INFORMATION AND TELECOMMUNICATION (1999). Contents and Softwares. Trends of Information and Telecommunication Series 99-2. Seoul, Korea. MINISTRY OF INFORMATION AND TELECOMMUNICATION (1999). Information and Telecommunication Equipments. Trends of Information and Telecommunication Series 99-1, Seoul, Korea. MINISTRY OF INFORMATION AND TELECOMMUNICATION (1999). Information and Telecommunication Services. Trends of Information and Telecommunication Series 99-3. Seoul, Korea. MINISTRY OF INFORMATION AND TELECOMMUNICATION (1999). Information and Telecommunication White Paper. Seoul, Korea. NATIONAL COMPUTERIZATION AGENCY (1999). National Informatization White Paper. Seoul, Korea. http://www.kt.co.kr/history/eng/highlights/ http://stat.nca.or.kr/