South Korea introduces number portability to encourage VoIP

Charice Wang South Korea introduces number portability to encourage VoIP The Korean Communications Commission (KCC) introduced VoIP number portability between PSTN and VoIP service providers at the end of October. It allows fixed line users to switch to VoIP-based packages from alternative operators while retaining their fixed line number. This move will encourage take-up of VoIP in Korea.

Number portability changes the regulatory scene in Korea

Korea is known for its unique regulation of VoIP.
It is the only country so far to impose interconnection price control on facility-based VoIP operators. This is different to most European regulators, who have taken a 'wait-and-see' approach to VoIP interconnection regulation. The VoIP termination rate is W5.5 ($0.004) per minute, and VoIP operators pay W18 ($0.014) per minute for outgoing calls to PSTN.
However, this wholesale tariff regulation has had a limited effect on the development of VoIP. Currently 14 VoIP service providers (nine operators and five value-added service providers) are competing in the market of around 900,000 subscribers. This is relatively limited growth of VoIP in comparison to Japan (15 million as of 2Q07), given the similar situation of advanced broadband infrastructure and penetration.
The incumbent KT has taken a strong defensive stance on VoIP. KT currently dominates more than 90% of the fixed-line market. Hence it set the VoIP-to-fixed and VoIP-to-VoIP call retail tariff at around the same price as KT PSTN local calls. The cheap legacy telephone service prices and absence of number portability meant that VoIP providers have failed to disrupt the fixed market. It is therefore no surprise that the KCC decided to review the VoIP regulatory framework this year and proposed number portability.
Number portability will speed up the growth of VoIP services With the introduction of number portability, VoIP will experience a higher level of uptake and will soon become a mainstream service. The number portability will allow alternative operators to strengthen their competitiveness against incumbent KT by offering cheaper call options. These operators, such as SK Broadband (previously Hanaro Telecom) and LG Dacom, will see number portability as a strong opportunity. For incumbent KT, it is time for it to change its defensive strategies on VoIP; it should try to take the initiative in the VoIP market to protect its broadband subscriber base. Fixed line competition in Korea is set to heat up.