korea’s initiative for it application and the development of internet march 1998 wan-il choi

KOREA’s Initiative for IT Applicationand

the Development of Internet

March 1998

WAN-IL CHOINational Computerization Agency

Contents

• Current Status of Information Infrastructures

• National IT Initiatives and Policy

• Internet Development and Policy

National Computerization Agency


• IT Production• PC Diffusion• Telecommunications• CATV• Internet• Informatization Index

Current Status of Information Infrastructures


• Computer and PC Production (million Dollors)

※ exchange rate 800 won/US $

• 1997. 10 : Computer : 1,734,817 million won (US $2,168)

PC : 962,362 million won (US $1,203)

Year 1993 1994 1995 1996

Computer 964 1,231 1,725 2,119

PC 929 1,181 1,420 1,835

IT Production


• Number of PCs Sold Domestically(thousands)

•Number of PCs in Use : 7 Million (as of the end of 1997)

•Goal set in NBIS (National Basic Information System)- One PC per household by the Year 2000- 10 mil PC’s diffused to offices and homes

Year 1991 1992 1993 994 1995 1996Computer 614 665 773 1185 1500 1900

PC Diffusion


• Market Structure for Basic Service- KT Monopoly Broken at the Mid, 1991- International Call Carrier : Oligopoly (KT, Dacom, Onse)- Domestic Long Distance : Jan ‘96. Duopoly (KT, Dacom)- Local Calls : Duopoly (KT,Dacom)

• Telephone Lines per 100 population(1996) : 44.4- U.S. : 62.5 (1995)- Japan : 48.8 (1995)- U.K. : 50.5 (1995)

•Subscribers of Mobile Communications (thousands)

Telecommunications

Year 1993 1994 1995 1996 1997.6 1997.11Mobil 472 960 1,641 3,180 4,328 5,558Pager 2,648 6,366 9,658 11,904 13,600 15,105


• New Service : on Mar 1995

• Number of Subscribers- 500,000 (Jan 1996) : 5% of households- 1,700,000 (Mar 1997) : 13.1% of households- 2,002,000 (Jun 1997) : 15.4% of households- 2,452,000 (Feb 1998) : 19% of households- 6,500,000 (by the year 2000, Projection) : 50% of households

• Time for Diffusion of CATV - 10% of households : 8 10 years (Canada, U.S.A.)∼

- 6% of households : 8 years (Japan)

CATV


• Number of Internet Host Computers (thousands, Jan 1997)

※ 131 : Dec ’97

Internet

Korea U.S. Japan Germany U.K. France81 10,110 1,168 994 987 333


Informatization Index(Overall) Korea 1990=100

0

1000

2000

3000

4000

5000

6000

1988 1989 1990 1991 1992 1993 1994 1995

KoreaU.S.A.Ja p a nSi n g a p o r eEurope

KoreaU.S.JapanSingaporeEurope

National IT Initiatives and Policy


• NBIS, NAIS

• Master Plan and Strategy for Information Society

• Korea Information Infrastructure

• Policy Issues

NBIS(National Basic Information System)


• First National Initiative of IT Use and Production– 1st Five-Year Plan (1987 - 1991)– 2nd Five-Year Plan (1992 - 1996)

• Consensus on the Potentials of IT– Industrial Revolution vs. Information Revolution

• Strong Support by Government– Funding Schedule– NCB (National Computerization Board)

• Under the Executive Office of the President• Effective Coordination among Government Agencies• Computerization Promotion Meeting (Presidential)

NBIS(National Basic Information System)


• Objective– Economic Growth in “Information Age”– Use IT to Improve Competitiveness– Take a Position of Developed Nation in 21st Century– Improve Quality of Life– Provide Initial Markets for IT Industries

• Implementation– Administrations– Financial Institutions– Education and Research– National Defense– National Security

NAIS(National Administration Information System)


• Small and Efficient Government– 1st Stage : Developing the Separate Systems– 2nd Stage : Sharing Information among Agencies

• Pre-assigned Fund : US $ 200 million (1987 - 1991)• Six Subsystems

– Resident– Vehicle– Hose and Land– Employment– Customs Clearance– Economic Statistics

Master Plan and Strategy for Information Society

• Legal Ground

– Basic Act on Informatization Promotion(1995)

• Basic guiding principles on building KII and creating information society

• Basic plan for informatization and implementation

• Establishment and operation of Informatization Promotion Committee

• Operation of Informatization Promotion Fund


Master Plan

• 1st phase(1996-2000):

– laying the foundation for building a national

information network

• 2nd phase(2001-2005)

– Spreading the usage of information networks

• 3rd phase(2006-2010)

– Promoting a higher level of information network usage


Major programs

• Promoting projects aimed at accelerated usage of the

information network in the public sector

• Building an information superhighway

• Creating the desirable environment for the information and

communication industry

• Establishing a legal framework

• Ensuring information security and standardization


Korea Information Infrastructure

• Aim: To construct high-speed government and public information networks

– KII-G: needs of public administration, research institutes, and universities

– KII-P : needs of industry and general public

• Construction

– Operator: Korea Telecommunication, Dacom

– Fund : US $ 580 million

– Schedule: completed by 2010


KII and Internet

• KII promotes the usage of Internet services

• Internet becomes the integral part of KII

• Vitalization of Internet as a basis of implementing

Electronic government

• Development of Web based application in the KII


Policy Issues

• Demand-Pull vs. Supply-Push

– KII Plan coordinated by Government : Supply-Push Model

– Experience of Failed System in NBIS due to Insufficient Demand

– Shifts of Interest to Demand Side

– Nature of IT

• Consumer’s potential needs and market demand to be developed

• Unforeseen yet popular services generated by enabling technologies

– Interaction and Synergy Effects of Demand and Supply


Policy Issues

• Roles of Government

– Strong Leadership in Economic Development Plan

– Different Environments in Managing the KII Plan

– Limited Roles of Government

– Bureaucratic Attitudes Are Still Alive

– Mixed Attittudes Held by Private Sectors

• Preferring liberalized business environment

• Seeking for direct government supports


History of Internet use in Korea

o 1982 Installment of SDN(System Development Network) between Seoul National University and Korea Institute of Electronics and Telecommunicationo 1986 Establishment of KRNIC(Korea Network Information Center) at KAISTo 1987 Interoperation of SDN with CSNet (9.6Kbps) extending to Research and Education Networko 1994 Starting ISP Businesses, Providing Internet services to the Publico 1994 KRNIC move to NCA(National Computerization Agency)o 1997 Establishment of Commerce Network in KOREA, stimulating Internet Commerce


Internet Development and Policy

o Status of Internet in Korea

o Internet Usage for Commerce - Market size for ‘96 : 6.3 bil won (US $4.2 mil) - Projection for year 2000 : 61.4 bil won (US $40.9 mil)

1993 1994 1995 1996 1997Hosts(Thousands) 7 13 36 73 131Domains 61 192 579 2,664 8,045Users(Thousands) 138 366 731 2,500


Status of Internet Usage

• Application of Internet Technology to existing Businesses - Banking, Shopping, Distribution, Retailing, etc - Improving Efficiency and Productivity

• Intra-firms• Between firms• Between Producers and consumers

• Generation of New Businesses - Huge Business opportunities provided by Large number of Users connected to the Internet - New production system and distribution channels - Access to cyber market requiring Small Investment


Internet and New Businesses

• Internet Network Service Providers (NSP) : KT, Dacom• Hardware Manufacture• Internet Connection Service Providers (ISP) : 22 (‘98.3)

※ Commercial(‘98. 3) : 18, Non Profit ISP : 4• Web Hosting Service Providers (WSP) : 120 (‘97)• Internet Based S/W Developers• Homepage Building Service• Internet Contents Providers • Internet Telephone and Fax

Year 94 95 96 97 Mar- 98ISP 4 11 16 20 22


List of Internet Businesses

Restructuring of Industrial Organization and Internet Business


• Overrule of Large Businesses and Economic Crisis

• Strategic Shift toward SME’s and Internet Businesses– New Government Strategy in favor of Small Businesses

– Recognition of Internet as a means of Supporting Small Businesses

– Easy Access to World Market with Modest Investment

– Internet Technology enabling New Ideas into Businesses along with Venture Capital

• Improvement of Internet Backbone Network

• Development of Internet Business Services on the CATV Network

• Government Support for Internet Businesses

• Promotion of R&D Investment for Internet Technologies

• Government role in Electronic Commerce

• Reformation of Regulations, Rules for Promotion of Internet Businesses


Strategies for Development of Internet Businesses

• For the Short term : Examine traffic on the existing Internet

backbone to solve bottleneck point.

• For the long term : Use PUBNET and ATM to build Super-

high speed Internet backbone

- build more IX (Internet exchange point)

- 33.6Kbps → 56K bps


Improvement of Internet Backbone network


Development of Internet Business Services on the CATV Network

Current 2002Upstream 0.768 Mbps 10 Mbps

Downstream 10 Mbps 30 Mbps

Fiber OpticCable

CoaxialCable

Total

KT 2,453.4 15,375.1 17,828.5KEPCO 2,078.0 25,534.0 27,612.0

Total 4,531.4 40,909.1 45,440.5

• Merit : Provide Internet Service in low price

• Bandwidth

• Status of HFC network

• Support Model Project of Commercial Activity based on Internet

• Support Next generation Internet Pilot Project

• Support APAN (Asia Pacific Advanced network) Activity


Government Support for Internet Businesses


Promotion of R&D Investment for Internet Technologies

• Direction

- Driving force to develop new technology through Industrial-educational

cooperation

- positive utilization of Forward Delivery Trial Network to verify Internet

technology which will be developed

- Reinforce exchange information between Standardization and R& D

Government Roles in EC

• Constructing technical infrastructure

– EC related technology

– Standards for electronic document

– Physical network infrastructure

• Preparing legal and institutional arrangement

• Constructing the environment for elevating the social acknowledgement on EC

• Establishing the national strategy for issues on global EC and internal cooperation


Government initiatives for EC In Korea

• Government took full initiatives in major areas during the introduction of EDI in Korea

– logistics, customs, taxation, procurement

• Market formation as a investor and a user

• Promulgated independent EDI law for the first time in the world(1992)

• EDI is considered an integral part of the major social overhead capital

• MOTI(Ministry of Trade and Industry) and MIC(Ministry of Information) are major actors in EC policy.


Policy direction in Internet based EC

• Foster market mechanism and private sector initiatives

• More focus on production and logistics than consumption

• Active participation to Int’l cooperation

• Effective division of responsibility among government and private sector


Some Measure for Expansion of EC over the Internet

• Tariffs on Internet transaction– Visible merchandise : tariff as present– Invisible product : tentatively tariff-free

• Regulation on Contents– Development of consumer protect measure– Self regulation against harmful contents

• Preparation of Electronic Fund Transfer Act (during 1998)• Operation of EC supporting Center for SME’s• Launching and supporting EC pilot project in the public & private sector

– Risk taking and awareness elevation


Thank you !


korea’s initiative for it application and the development of internet march 1998 wan-il choi

Documents

information ageuse

households time

pc production

duopoly kt

basic service kt monopoly

naismaster plan

oligopoly kt

number of subscribers