AMI-Partners: Small Businesses in South Korea to Invest US$1.6 Billion on Net Solutions This Year; Close to a Third of Korea's Medium Businesses Use Dialup Access; Therefore, an Untapped Market Still Exists in the Broadband Internet Arena.

NEW YORK -- Small and Medium Businesses (SMBs) in South Korea are likely to spend US$1.65 billion on beefing up their Internet infrastructure and solutions this year, accounting for up to 13% of the total IT and telecom spending there. Both the government and private sectors continue to vigorously expand and improve current infrastructure to develop a leading information and knowledge-driven economy.

That comes from a recent study conducted by New York based AMI-Partners. "The deregulation of the telecom sector by the government resulted in the formation of one of the best telecommunication infrastructures in the world," says Avimanyu Datta, Analyst (market sizing) at AMI-Partners. "This has helped fuel the enormous growth of the country's Internet and wireless market."

South Korean companies have not only been forerunners in deploying 3G telecom applications but they are already developing prototypes and core technologies for fourth-generation mobile communications within the next few years. The South Korean economy grew 4.2% in 2005. The country is traditionally strong in all aspects of hardware manufacturing; it has an international electronics manufacturing industry and is also a prime semiconductor manufacturer at a global level. In Addition, South Korea makes leading edge products, including computers, peripherals, PDAs and displays.

"South Korean citizens enjoy relatively cheap telephone and broadband network services, high-speed cable modems, and DSL services," Mr. Datta says. "South Korea is the most prominent emerging superpower in IT spending and particularly in Internet adoption." Almost all medium businesses and 81% of SBs already have access to the Internet. However, close to a third of these MBs use dial-up access and therefore an untapped market still exists in the broadband Internet arena.

Internet forms the most important driver to business Growth among SMBs

"Internet is fast becoming a name synonymous with business growth and opportunities among SMBs in Korea," remarks Avimanyu Datta. He adds, "Korea is the most prominent emerging superpower in IT spending and particularly in Internet adoption. Among SBs of developing nations, 81% is a fairly good penetration." One of the reasons for this high penetration is that "the Korean SMBs could successfully link Internet as a strategic growth driver to enhance their competitive position, rather than just an economical channel for communication," observes Mr. Datta. AMI-partners research has shown that standardizing PCs on the most recent version of operating system, high speed bandwidth, and Internet Security are among top IT focus areas for Korea's SMBs. High speed Internet such as DSL, ISDN, and cable modems are becoming commonplace.

Research has shown that 61% of Korea PC SBs and over three-fourths of Korea PC MBs believe that using the Internet for sales, marketing and customer support activities will help them strengthen their customer relationships. Half of Korea's MBs have indicated their willingness to change their business processes in order to enable efficient deployment of Internet-based applications. "The appreciation of the recursive relation between Internet adoption and business process re-design will positively flatten the learning curve that most firms experience while adopting the Internet for businesses," mentioned Mr. Datta.

About the Study

AMI's 2005-2006 Korea Small Business Market Overview and Comprehensive Market Opportunity Assessment and 2005-2006 Korea Medium Business Market Overview and Comprehensive Market Opportunity Assessment studies highlight these and other major trends in the context of current/planned IT, Internet and communications usage and spending. Products and services covered include established and emerging hardware, software, applications and business process solutions. Based on AMI's annual surveys of SMBs in Korea, the studies track a broad spectrum of issues pertaining to budgets, purchase behaviors, decision influencers, channel preferences, outsourcing, service and support. Also covered are detailed firmographics and critically important technology attitudes and strategic planning priorities. These data point to key opportunities and messaging hot buttons for vendors and service providers seeking to match their offerings to SMB market requirements.

For more information about this study, AMI-Partners, or our global SMB research, please call AMI-Partners at 65-6238-1101, e-mail [e-mail], or visit the AMI Web site at www.ami-partners.com.

About AMI-Partners

AMI-Partners specializes in IT, Internet, telecommunications and business services strategy, venture capital, and actionable market intelligence -- focusing on global small and medium business (SMB) enterprises. The AMI-Partners mission is to empower clients for success with the highest quality data, business planning and "go-to-market" solutions. AMI was founded in 1996 under the name of Access Media International (USA), Inc. by Andy Bose, formerly group vice president at IDC. Since its inception, the firm has built a world-class management team, each with ten to fifteen years' experience in IT, telecom, online communications or multimedia.

AMI-Partners has helped shape the go-to-market SMB strategies of more than 150 leading IT, Internet, telecommunications and business services companies over the last ten years. The firm is well known for its IT and Internet adoption-based segmentation of the SMB markets; its annual retainership services based on global SMB tracking surveys in more than 20 countries; and its proprietary database of SMBs and SMB channel partners in the Americas, Europe and Asia-Pacific. The firm invests significantly in collecting survey-based information from several thousand SMBs annually, and is considered the premier source for global SMB trends and analysis.