The Korea Herald


Mobile carriers, Kakao at odds over free mobile telephony service

By Park Hyung-ki

Published : June 5, 2012 - 22:12

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Clear guidelines needed before Kakao’s service launch, say carriers

Tension between Korea’s leading mobile carriers and Kakao Talk, a mobile messenger tech firm, is growing as the latter will introduce a mobile telephone service in the second half of this year.

Kakao Talk has begun offering a test version of its mobile Voice over Internet Protocol, named Voice Talk, to over 4 million worldwide users wishing to try its new service either on their iPhones or Android-based smartphones. Voice Talk will be free of charge just like KakaoTalk messenger.

The venture tech firm said that it is determined to pursue its mVoIP service plan, despite opposition from mobile carriers.

Given that it has already offered its mVoIP overseas including in Japan, it would not make sense if it did not introduce it in Korea, a spokesperson for Kakao said.

People can easily download the mobile telephony application on their smartphones, she said, without disclosing the number of users that accessed Voice Talk since it launched the test-version two days ago.

The company could limit the use of Voice Talk during the test period, and has not yet decided exactly when to officially launch the service this year.

Following Kakao Talk’s announcement, Korean telecommunications giants such as SK Telecom and KT expressed their opposition.

SK Telecom said in a statement that the free mVoIP service will only hinder investment for the further advancement of Korea’s information and communication technology.

The mVoIP, it said, will inevitably lead to poor services for consumers and a sales decrease for telecom companies, which will be forced to raise their standard telephone fees in the long-term.

KT, Korea’s second-biggest mobile carrier, had a similar position to SK Telecom, saying that Kakao Talk “free riding” its networks will hurt the industry in the long run, even though its free mobile telephony service may benefit consumers in the short term, its spokesperson said.

There needs to be a “clear regulatory guideline” by the Korea Communications Commission before the service launch, otherwise Kakao will be considered not only a telecom company but the biggest in Korea. SK Telecom also urged regulators to draw up policies regarding the matter.

The spokesperson, however, said that KT sees the need to find common ground and seek partnerships between mobile carriers and app developers such as Kakao to better provide services to consumers without hurting players in the market.

In major overseas markets, telecom industries either fully restrict the use of mVoIP or partially allow it with standard minimum fees, provided that such a service does not negatively affect the sector, according to SK Telecom.

Kakao Talk and Voice Talk services by Kakao, which does not yet have a “profit model,” could be part of efforts to improve the company’s bottom line by gathering as many users as possible in order to expose to mobile games and advertisements, industry sources said.

In April, Wemade Entertainment, a listed online gamer, invested 20 billion won in Kakao Talk for a partnership in mobile games in which Wemade will develop games to be released via the Kakao platform. 

By Park Hyong-ki and Cho Ji-hyun