Olympic post­pone­ment takes ma­jor toll on Korean firms

The Korea Times - - FRONT PAGE - By Kim Jae-heun [email protected]­re­atimes.co.kr

The post­pone­ment of the Tokyo 2020 Olympic Games has taken a ma­jor toll on Korean firms hop­ing to ex­pand their cus­tomer base with ag­gres­sive mar­ket­ing dur­ing the sum­mer sports ex­trav­a­ganza.

The In­ter­na­tional Olympic Com­mit­tee an­nounced the de­lay of the Games, which were sched­uled to start in July, to next year, Wed­nes­day, for the first time in the his­tory of the mod­ern Olympics.

The de­ci­sion came amid the world­wide spread of the COVID-19 pan­demic.

Korean firms had high hopes to mar­ket their lat­est prod­ucts dur­ing the Games, which would have been the first held in Asia since the 2008 Beijing Olympics.

Tech gi­ant Sam­sung Elec­tron­ics, also an of­fi­cial spon­sor of the Tokyo 2020 Olympic Games, will likely face a set­back due to the post­pone­ment. The com­pany had been pre­par­ing to show­case lim­ited edi­tions of its lat­est Galaxy S20 and Galaxy Z flip smart­phones, but this has now been scrapped.

“We will have to wait and see if the de­lay, and the can­cel­la­tion of the two Olympic Games lim­ited edi­tions, will im­pact our op­er­a­tions,” a com­pany of­fi­cial said.

The lo­cal home ap­pli­ance sec­tor is also fac­ing a sim­i­lar set­back. Tele­vi­sion makers had hoped to re­bound from losses in­curred from COVID-19 through the Olympics, but must now search for al­ter­na­tives. The com­pa­nies have been suf­fer­ing ma­jor losses as they have had to tem­po­rar­ily close fac­to­ries around the world due to the deadly virus.

Telecom­mu­ni­ca­tions firms were bank­ing on pro­mot­ing their 5G net­works to the world, but the post­pone­ment could cause a lull in demand, which would im­pact the over­all IT in­dus­try. “The demand for 5G will be less­ened and have a neg­a­tive ef­fect on the over­all IT in­dus­try,” an eco­nomic re­searcher said.

“Sam­sung Elec­tron­ics was aim­ing to en­ter the Ja­panese 5G mar­ket through the Tokyo Olympics as the coun­try was ex­pected to seek to com­mer­cial­ize its 5G net­works.”

At the end of last year, Sam­sung was cho­sen as the main 5G sup­plier for KDDI, one of four ma­jor Ja­panese mo­bile car­ri­ers.

Ja­panese tele­com com­pa­nies, in­clud­ing KDDI, which plan to in­vest 17 tril­lion won over the next five years to so­lid­ify their 5G net­works, were Sam­sung’s po­ten­tial cus­tomers.

Ja­pan’s lead­ing tele­com com­pany NTT DOCOMO launched its 5G net­work Wed­nes­day, while the other car­ri­ers are set to fol­low suit.

“Again, post­pone­ment of the Olympic Games does not mean Ja­panese mo­bile car­ri­ers will not adopt 5G. KDDI also launched its 5G net­work Thurs­day. The Olympic Games would have helped 5G to ex­pand faster in Ja­pan,” a Sam­sung Elec­tron­ics of­fi­cial said.

How­ever, the post­pone­ment will in­evitable set back Sam­sung’s ef­forts to oc­cupy over 20 per­cent of the 5G global telecom­mu­ni­ca­tion equip­ment mar­ket by 2025.

Ac­cord­ing to Dai-ichi Life Re­search in­sti­tute, the rip­ple ef­fect from the de­lay will hit the Ja­panese econ­omy hard with es­ti­mated dam­age ex­pected to reach nearly 36 tril­lion won ($29.34 bil­lion).

Ja­pan was ex­pected to bring in ad­di­tional 22 tril­lion won from the fol­low up to the Olympic Games

The Nikkei eco­nomic daily es­ti­mated to­tal losses to be be­tween 6.6 tril­lion won to 7.7 tril­lion won.


A count­down clock for the Tokyo 2020 Olympic Games is seen re­flected in a pud­dle of wa­ter in front of Tokyo Sta­tion, Mon­day.

Newspapers in English

Newspapers from Korea, Republic

© PressReader. All rights reserved.