WIPI in Korea or non-tariff barriers to mobile competition

Last year I wrote about the de-facto monopoly of Microsoft Internet Explorer in South Korea (Slashdot, Digg, etc.) Everyone I tell this story to in the Internet industry, who is not South Korean, is amazed and surprised by such a reality.

Now I hear that the South Korean government’s Mobile Platform Special Subcommittee of the Korea Wireless Internet Standardization Forum (KWISF), in an attempt to create competition (or some say block foreign competition) in the mobile application space, required a Korean-developed middleware standard on all Korean mobile phones, WIPI or (Wireless Internet Platform for Interoperability), which effectively closed the Korean market to international competition.

I first heard about WIPI only a few days ago, on Channy Yun’s Korea Crunch weblog. Then Changwon Kim blogged about the negative impact of WIPI in Korea at Web 2.0 Asia: Korean government mulling over scraping WIPI altogether.

Here are some other recent choice quotes about the impact of WIPI in South Korea:

The Korea Times: Wireless Operators in Talks With Nokia, Apple Over Phones

“The one remaining trade barrier for foreign handset makers is “WIPI,” or “Wireless Internet Platform for Interoperability,” a software standard that the government mandated in 2005 for all mobile-phone makers planning to deliver Internet access on handsets.

With Korea accounting for just 2 percent of the world’s mobile-phone market, it was hard to convince the foreign handset makers to produce WIPI-enabled phones not usable elsewhere.

However, the KCC, the country’s telecommunications regulator, is now considering scrapping the WIPI requirements, amid criticism that maintaining a fixed software standard would mean little when the global industry trend leans toward the adoption of open-source operating systems for wireless platforms.

FT.com: Korea signals lifting of handset barrier

But faced with criticism that the regulation restricts Korean consumers’ choices, President Lee Myung-bak’s newly elected government has expressed a willingness to soften the WIPI rule, potentially allowing foreign handset makers a way into the Korean market.

The WIPI rule, designed to protect local companies, has been the biggest entry barrier against foreign handset makers,” says Stan Jung, analyst at Woori Investment & Securities. “Once the rule is spiked, global companies will actively seek to enter the market. Then, Samsung and LG will find it hard to maintain their dominance.

The Korea Times: IT Regulation Prevents Korean Access to iPhone

The presence of two of the world’s largest mobile phone makers ― Samsung and LG ― has encouraged the [Korean] government to shut its door to foreign-made mobile phones by using non-tariff barriers. Along with iPhone, the Nokia, Blackberry and Sony-Ericsson phones are virtually not allowed to be sold here.

Korea is not ready,” said a manager of Apple Korea Tuesday. “We have no comment on iPhone matter in Korea, also, there is no plan to release any further information about launching of iPhone in Korea”

In 2003, the government imposed a unique software platform called WIPI on mobile phones on sale, hoping that this industrial standard can save firms from unnecessary competition and overlapping investment. But as phone technologies advance, this regulation has become a stiff trade barrier for foreign makers who think it is not cost-efficient to redesign their products only for the South Korean market.

Digital Daily by John Paczkowski: South Korea: No iPhone for YOU!

“And for Apple (AAPL), as well as other handset manufacturers like Nokia (NOK) and Sony Ericsson (ERIC), redesigning their devices to do so is a costly proposition. So costly, in fact, that they’d rather not bother.

ZDNet Korea: Seems like WIPI is out. Can Korea become a global financial hub without it?

According to Hong [a Korean mobile software developer], Korean handset makers obviously do not want to abolish WIPI, in their fear of shrinking market share. Fortunately for them, the effort for the restoration of WIPI is still ongoing. As Hong said, developing WIPI into an open-source style is considered, if it helps the country’s IT industry.

The problem with thinking that open-sourcing WIPI will help is that the license for the WIPI software is not the core problem. None of the non-Korean mobile handset manufacturers want to deal with WIPI, whether it is open source or not, because the costs for developing and maintaining a fork for just one nation is not worth the effort (unless you’re Qualcomm it seems.)

This is now the second time that I have learned that Korea has developed a standard, unique to Korea, which has effectively closed the market to competition (the first being the pc desktop web browser market, of which there is no Korean-domestic browser, so they make do with Internet Explorer.)

As Ian Fleming said in Goldfinger, “Once is happenstance. Twice is coincidence. The third time is enemy action.” (Note, my point here is to say that the S. Korean government seems to make active decisions to limit competition in Korea, which in turn benefits the domestic businesses who are closest to the market.)

I’ll close with Dame Shirley Bassey, because she should always be given the last word.

2 Responses to WIPI in Korea or non-tariff barriers to mobile competition

  1. WIPI used to be a useful mobile platform, but it should not have been only way of running mobile software. Monopoly is always harmful to all, even for WIPI itself.

    WIPI is always slow to embrace new technologies and trends such as Web2.0, LBS, and 3D. Because WIPI has not been updated since 2004. As a result, there is no businees regarding mobile web 2.0 in Korea. Most of Korean only use WIPI platform for runnng simple games.

  2. Pingback: Mozilla in Asia » Blog Archive » the Security of Internet Banking in South Korea in 2010