Joyn Charging Unique To South Korea


South Korea ' s SK Telecom has become the latest mobile operator to launch over-the-top (OTT) voice and SMS over IP service Joyn. However, unlike its Western counterparts, SK Telecom will be charging consumers who sign up for the service from June 2013 onwards. This difference is due to the South Korean regulator ' s decision to allow mobile operators to charge subscribers for OTT services on its network , and we believe that SK Telecom ' s price strategy for Joyn will not be replicated in many other countries given net neutrality laws.

LTE Giving Rise To New Revenue Models
SK Telecom Mobile Subscriber Base By Technology ('000)

Joyn is the consumer-facing brand for the GSM Association (GSMA) ' s Rich Communication Services (RCS). Joyn allows users to transfer files and chat via voice, video and messages. According to the GSMA, RCS aims to introduce interoperability by transitioning voice and messaging capabilities from Circuit Switched technology to an all-IP world. Additionally, RCS and voice over LTE (VoLTE) share the same IP Multimedia Subsystem (IMS) investment and leverage on the same IMS capabilities. VoLTE is expected to feature prominent in the future given that LTE networks are gaining traction globally.

Joyn was launched by European operators such as Telefónica , Deutsche Telekom , Orange and Vodafone in several markets in H212. Joyn services are currently avai lable via an Android app , but support for alternative operating systems such as iOS and Windows Phone is expected. It is clear that European operators are keen for consumers to adopt the platform, as evident from their decision not to charge Joyn services. Additionally, data traffic incurred will not be deducted from subscribers ' allocation. This is necessary given that there is a host of established alternatives such as WhatsApp , Skype and Viber available. Convincing consumers to switch to yet another platform is one of the biggest challenge s , especially if consumers ' friends and family members have already adopt an ecosystem. However, mobile operators are looking to pre-embed Joyn into mobile devices, which could give the service a better chance.

SK Telecom has interestingly decided to charge for Joyn services . According to Total Telecom, five minutes of video sharing could cost either KRW99 (US$0.1) or KRW180 (US$0.17) depending on the subscriber contract. Joyn services will be free to use for new and existing subscribers on flat-rate 3G or LTE contracts who download and use the app before end-May 2013. SK Telecom ' s ability to charge consumers stems from the regulator ' s decision to side with mobile operators with regard to OTT players. In June 2012, the Korea Communications Commission (KCC) gave SK Telecom, KT and LG Uplus permission to charge their subscribers for mobile VoIP services on their networks ( see our online service, June 28 2012, ' Mobile VoIP Suffers Setback ' ) . Protectionism forms the basis for the KCC ' s move , but prolonged favouritism towards mobile operators bodes poorly for consumers and start-up companies. Additionally, Kakao , the company behind KakaoTalk, is home grown, unlike the more powerful international firms that the KCC seeks to protect mobile operators from.

Given the support of the regulator, ch arging for Joyn services makes business sense for SK Telecom. Assuming that SK Telecom pre-embeds Joyn in popular mobile devices , prices Joyn attractively against similar OTT services and provides quality service and innovations, Joyn could eventually take off in South Korea. However, this model is unlikely to be replicated in many countries as net neutrality laws would ensure that free and low-cost alternatives are able to compete freely.

This article is tagged to:
Sector: Telecommunications, Consumer Electronics
Geography: South Korea, South Korea, South Korea, South Korea