Recent Ruling on Mobile VoIP Major Stroke in South Korean Net Neutrality

The issues surrounding the larger issue of net neutrality have been in motion for some time now, but a ruling handed down recently from the Korean Communications Commission is going to be one of the key strokes for the issue of net neutrality throughout South Korea.

Mobile VoIP has left major telecom operators like SK Telecom and Korea Telecom frustrated, and with a service that uses mobile data to power a service that formerly would have been the province of the telecoms. This undermines a substantial profit driver for the mobiles, and provides a major opportunity for the newcomers. A major opportunity indeed, considering that mobile VoIP providers like Kakao Talk are carrying a user base last measured around 37 million users, just for their mobile messenger service.

Thus, the jilted telecoms took their case to the Korean Communications Commission, seeking permission to charge subscribers for the ability to access services like Kakao Talk. They got permission in a ruling issued June 26 following extended discussions within the KCC, and that in turn kicked off a firestorm of response from outraged subscribers and net neutrality buffs alike.

 Companies are outraged and focused on the fact that the KCC was, essentially, allows mobile providers an easy way to defend the status quo instead of offering more, or better, services at lower, or better, prices to make people want to choose the mobile providers' offerings. The protesting also suggested that the mobile providers take other, less popular, methods to shore up their bottom line, like ending unlimited calling plans or otherwise increasing prices rather than doing what amounts to eliminating customers' access to competitors.

The mobile providers responded as mobile providers generally do, saying that they built the networks in question, at great expense to themselves, and as such needed to protect and recoup their investment. It didn't matter, according to the mobile providers, whether it was a comparative newcomer like Kakao Talk or whether it was a major player like offerings from Apple, Google, and even Skype.

Though the mobile provider indignation isn't extended to all South Korean mobile providers; third-place operator LGU+ is actually putting a spotlight on Kakao Talk as part of its own offerings in a bid to make its offerings distinct of those of SK Telecom and Korea Telecom. This is actually somewhat similar to Sprint's offerings of unlimited data access in a bid to distinguish themselves from their competition, and makes plenty of sense. LGU+ may be the smallest provider in the market, but they were also the first to launch LTE services in South Korea, making SK Telecom and Korea Telecom's protests ring just a bit hollow.

But LGU+, some analysts believe, may be opening itself up to a potentially larger problem later. Most of the mobile providers generate the bulk of their revenue from voice services. While LGU+ may gain some ground with customers eager for a bargain, they may well lose in the long run with the loss of their voice business.

Indeed, the implications of mobile VoIP services represent both potential for gain and disaster alike across the entire mobile industry. The genie of mobile VoIP cannot be forced back into its bottle, and one way or another; companies will likely need to come to grips with its existence. But whether companies can find a way to profit from the existence of mobile VoIP or not, will drive the ultimate future of both its own industry and the entire mobile industry itself.

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