-
All is not lost for the metaverse as South Korea’s biggest service provider undertakes expansion of its metaverse platform
-
Young digital-savvy population coupled with fast 5G deployment have set the foundation for metaverse’s growth in the region
-
Even so, it will be some time before the metaverse ecosystem matures
South Korea’s largest service provider, SK Telecom, continues to back the metaverse despite its limited global uptake.
The service provider was recently in the news for forming partnerships with CelcomDigi, Malaysia’s largest mobile carrier; Agate, an Indonesian game publisher; and Philippine-based Cherry and Cosmic Technologies, to expand the reach of its metaverse platform, ifland.
SK Telecom plans to expand beyond the Asia Pacific region to other global markets, including America. According to the press release, the service provider will soon support different languages, including Malay, Indonesian, Hindi, and Spanish. It already supports German, English, Korean, Chinese and Japanese languages.
“Malaysia and Philippines are important markets for ifland’s global expansion,” said Yang Maeng-seok, head of SK Telecom’s metaverse division.
“Through partnerships, SK Telecom will offer tailored content and marketing services for ifland in the three countries (Malaysia, Indonesia, and the Philippines). In exchange, partners gain access to the metaverse ecosystem without upfront platform development expenses. SK Telecom foresees accelerated global expansion for ifland, with partners adapting content to local cultures and while it leverages their market insights and customer bases,” said Arun Menon, principal analyst, MTN Consulting.
Why is SK Telecom betting on metaverse?
SK Telecom was one of the first service providers globally to launch a metaverse platform, ifland, in 2021. However, by all indications, metaverse has failed to live up to its initial promise.
Even so, the demographics of the Southeast Asia (SEA) region are perfect for metaverse’s growth in the future. A large young and tech-savvy population and growing content consumption in the SEA region make it a lucrative area for SK Telecom.
“SK Telecom is likely to scale in these markets using a tailor-made approach to appeal to consumers by offering differentiated content. These markets hold potential for SK Telecom. As 5G coverage increases in the region, AR/VR use cases will likely facilitate these offerings at an increased rate,” explained Glen Cardoza, senior analyst at Counterpoint Research.
“SK Telecom has built a strong telecom and content base in South Korea, and they have made it evident that they would like to diversify into more promising markets in the SEA region. The growth of Metaverse has been slow in recent years, even for the SEA region. However, the SEA countries have shown potential in an ongoing digital transformation. This is likely to be a big consideration factor for SK Telecom,” Cardoza added.
Another reason behind SK Telecom’s pursuit of metaverse expansion is strong backing of the South Korean government’s backing. “The [South Korean] government has investment plans of more than $200 million to develop the country’s Metaverse ecosystem. The government has also established a Metaverse Fund aimed at propelling economic expansion through strategic investments in metaverse technologies,” Menon said.
Additionally, the region has taken the lead in 5G deployment, which is crucial to the adoption of bandwidth-heavy technologies like metaverse. China and South Korea were among the first countries to launch 5G.
Some would argue that metaverse is not a lost cause in the region. “The potential impact of the metaverse to GDP in Asia is about $0.8T-1.4T per year by 2035, roughly 1.3 – 2.4% of overall GDP,” according to a Deloitte report.
At the same time, metaverse is likely to face several challenges as it expands in the region. “The metaverse is an emerging sector, but its development in the SEA region still lags somewhat. Before that, certain infrastructure elements, such as 5G and content ecosystems, still require some time to develop. We believe that in the short term, the hardware sales or ecosystem of the Metaverse may develop slightly better in countries or regions with relatively higher per capita income,” said Ivan Lam, senior analyst at Counterpoint Research.
“While there's potential for growth given the region's increasing digital connectivity and tech-savvy population, widespread adoption may take time,” Menon concluded.