The stakes were huge.

When Chen Tianqiao signed a purchasing agreement with South Korean online game developer Actoz Soft in July, 2001, he knew the U$300,000 he was paying was all he had. Actoz Soft's game, Legend of Mir, was also his only hope.

He succeeded, however, and his company signed on 100,000 players just two months after releasing the game. It eventually made him the third richest man in China in 2003.

Inspired by Chen's success, many chief executive officers (CEOs) at Chinese dotcoms started looking to South Korea after 2002.

Chinese companies made a lot of money running South Korean games, and the huge popularity of broadband Internet raised the profile of South Korea's information technology (IT) industry in China.

The National Internet Development Agency of South Korea (NIDA) says that the country had 31.58 million Internet users by the end of 2004, 70 per cent of South Korea's total population. NIDA's definition of Internet users only includes people above six years old. South Korea has the highest Internet penetration rate in the world.

Its game exports are estimated to triple from US$130 million in 2001 to US$343 million this year.

Yu Sungwan, an official with the South Korean Ministry of Information and Communications (MIC), says that the government aggressively pushed broadband to ensure fast growth.

In 1994 Korean Telecom, a State-owned company and the only fixed line operator, was told by the government to provide broadband Internet services to the public at affordable prices.

The company set prices at about US$30 a month for unlimited usage, and this has remained virtually unchanged over the past decade.

Low prices and an open-minded approach to new technology contributed to the rapid spread of the Internet in South Korea. In 1999, 9.4 million South Koreans used the Internet, compared with 8.9 million in China.

Yoo Hyunoh, CEO of SK Communications, which owns some of the biggest Internet assets in South Korea, adds that dense urban population patterns also facilitated widespread development of the Internet.

The popularity of "PC bang" (Internet cafes) also encourage Internet usage with their low prices and convenient locations. PC bang can be found almost everywhere in cities like Seoul.

Faced with the emergence of new technology and eager to maintain its lead, the country set out its 839 strategy, which stands for eight services based on three infrastructures and nine growth engines for the national economy.

The strategy is expected to play a significant role in boosting the South Korean gross domestic product (GDP) per capita from US$14,000 to US$20,000.

The "three infrastructures" refer to broadband convergence networks (BcN), radio frequency identification/ubiquitous sensor networks (RFID/USN), and Internet protocol version six (IPv6).

The "eight services" include wireless broadband Internet (WiBro), digital multimedia broadcasting (DMB), home network services, in-vehicle multimedia telematics services, RFID applications, third generation mobile communications wideband code division multiple access (WCDMA), terrestrial digital TV broadcasting, and Internet VoIP phones.

The country chose three telecoms operators to offer WiBro services to the public. It also tried to export the technology to other countries such as Mexico during South Korean President Roh Moo-hyun's visit to the Central American country in August.

South Korea also became the first country in the world to launch commercial DMB services, which allow people to watch TV programmes on mobile phones. In May, the Korean Broadcasting System (KBS) and the business news channel MBN began to broadcast programmes to subscribers.

The MIC also selected nine areas as future engines for the South Korean economy, including next-generation mobile communications and computers, embedded software, and intelligent robots.

(China Daily 10/08/2005 page7)