Early this month, SK Planet, owned by the nation’s largest telecom carrier SK Telecom, filed a lawsuit against Loc & All, the operator of navigation app Kimgisa, for using its map information without permission.
SK Planet, which owns Korea’s most used navigation app T-Map, had offered the map information to Loc & All under a contract since 2011. But the company claimed that Kimgisa continued using the information even after the contract expired in June.
“We found hundreds of our watermarks on Kimgisa. It is a clear violation of our copyright,” the company said of its copyright watermarks deliberately misspelling the names of some landmarks.
Park Jong-hwan, CEO of Loc & All, admitted there were some “mistakes” when engineers entered the names but flatly denied any wrongdoing.
“Since the contract expired, we are getting the information from government data. SK Planet is preying on a small venture firm,” he said, hinting at legal actions against any unfair business activities by the market leader company.
A few years ago, this controversy would have seemed like a game between David and Goliath. But now it is SK Planet that feels the sting of enhanced competition.
T-Map, backed by a vast number of SK Telecom loyalists, has enjoyed an unrivaled market share in the soaring navigation app market.
SK Telecom, which dominates more than 50 percent of the market, offers the app for free to its own subscribers, while charging 4,000 won per month to users of other telecom services.
Despite the extra charge, many users prefer the service due to its accurate driving directions and convenient app design.
Kimgisa entered the market in 2011, boasting simplicity with an app that was open to all mobile users. It removed unnecessary functions and ads, and gives the fastest route based on its real-time traffic analysis.
The app gained popularity especially during major family-reunion holidays as many T-Map users turned to Kimgisa as an alternative.
Now registered users of both T-Map and Kimgisa exceed 8 million people each.
In May, Kimgisa gained a further boost as it was acquired by Internet giant Kakao for 62.6 billion won. Kakao, taking advantage of the immensely popular KakaoTalk mobile messenger, is extending its offline-to-online businesses recently.
“SK Planet is already competing with Kakao in diverse areas. It would not lose its leadership in navigation app,” said a telecom company official, declining to be named.
Even though SK Planet outpaces Kakao in terms of sales for now, the company is struggling on next growth engine businesses where it competes directly with Kakao.
In the early days of mobile messaging, local telecom companies, led by SK Telecom, teamed up to have their jointly developed mobile messenger app embedded onto all smartphones here.
But their unified efforts failed to appeal to users who were responding explosively to KakaoTalk, as Kakao moved more quickly to reflect their user demands. Now the mobile app has become a crucial platform for the company’s sprawling businesses.
“In the ever-evolving Internet era, decision making still takes so long for larger companies in Korea. But Kakao is thinking fast and moving faster,” said another source working at a local portal company.
“Kakao is no longer a David fighting against Goliath. It is more like a smaller Goliath now, posing a threat not just to SK Telecom but also to Samsung and LG.”
While the nation’s top telecom companies still fight for their status quo in the saturated domestic market, Kakao is setting its eyes on overseas markets.
Kimgisa entered the Japanese market recently by setting up a joint venture with a local firm. T-Map also tried to do so few years ago but failed as other SK Telecom affiliates joined and complicated the process.
By Lee Ji-yoon (jylee@heraldcorp.com)
