If you are in the US, often the TV ads you most frequently see are those for new cars. Well if you are in Korea, you are almost drowned by the mobile carriers' 3G TV ads. Some are humorous, some dead serious, but all those ads try to send out the single message: Become a member of our 3G service. Like this TV commercial on KTF's 3G service, which is about giving old folks shiny new 3G phones as a gift. (Now they are targeting the old folks? Come on, apparently they are trying to squeeze the last drop out of the market...)
Worse, "marketing budget" for mobile carriers doesn't only mean TV commercial costs. In fact, TV commercials only take up a minor share of their marketing budget. There's subsidies, MNP (mobile number portability) benefits, commissions to be paid out to shops, etc.
As a result, Korean mobile carriers saw profit slide in Q2: SKT spent roughly US$ 880mm in Q2, while KTF spent around US$ 620mm. To put these numbers in perspective, KTF's marketing expenditure was 40% of their whole revenue (not of profit). Both companies saw their stock price go down after the profit announcements.
But as all major carriers spent big money on marketing, the market share among the three carriers turned out to have stayed largely the same. So why bother with marketing? one might ask. Of course if you are from advertising industry, you'd not ask that question, but would hope the carriers will forever stay on their marketing binge.
