Nokia and Sony Ericsson look to Korea

Nokia may be about to make another push into South Korea's mobile phone market, according to local sources.

The world's leading mobile handset maker is poorly represented in the country of 49 million, where mobile phone sales are dominated by local firms. Korea is Asia's third largest mobile phone market behind China and Japan.

Nokia has held discussions in recent months with Korea's two largest mobile phone operators, SK Telecom and KTF, centring on deals to distribute Nokia 3G phones in the county, according to the Korea Times.

Handset support for mobile TV broadcasts and Korea's local mobile internet standards are key to any distribution deal, a KTF representative told Korea IT News.

Local regulations demand that handset vendors support Korea's local mobile internet technology, which has tended to deter foreign manufacturers.

Rival handset vendor Sony Ericsson is also in distribution talks with an unnamed local mobile operator, the newspaper reported last month.

Nokia's previous attempts to break into the market have fizzled out, and the handset giant has been unable to reach even five per cent of local phone sales.

A host of reasons have been cited for the weak performance, including lack of strong local connections, failure to adapt phones for local preferences, incompatibility with local internet standards, and relatively low investment in local after-sales support.

In addition, Korean mobile networks are based on the CDMA2000 and W-CDMA standards, and not the more common GSM system with which Nokia is most familiar.

Nokia does not currently promote its phones in the local market. Although it still maintains a dealer and agent network, it is not easy to find the company's phones on sale in Korea.

Nokia's Korean language website features only three older models launched in 2001, compared to the more than 50 models that it actively markets or supports elsewhere.

Despite establishing a large handset manufacturing facility and an R&D centre in Korea, Nokia's handsets have never sold well in the local market.

The company closed its CDMA research centre in early 2003, but maintains a manufacturing base in the country.

The Korean mobile handset market is dominated by Samsung and LG which have around 45 percent and 25 percent of sales respectively. The two firms have used their strong domestic market as a base from which to challenge Nokia worldwide.