But the commission is clearly starting to cave to consumer demand. On Wednesday, the commission made an exemption for iPhone even though it has built-in mapping capabilities, which violates a South Korean rule requiring the use of domestic technology for location-based services. That closely follows a similar decision in December, when it allowed the BlackBerry to be used on SK Telekom’s network. However, the provision only allows the devices to be sold to corporate users. It is not offered to consumers through its retail outlets.

It’s unclear how the South Korean carriers and handset makers will react to the new competition. Already, Samsung and LG have been developing iPhone-like devices with touchscreens and easy-to-use widgets. However, the features have been limited because the app stores are controlled by the carrier, and not open to any entrepreneurial developer with an idea. As for the carriers, it’s also a competitive threat to open up their networks to Apple, which doesn’t share revenues from application sales with the carrier. KT Corp., the second-largest carrier, has been talking to Apple for months about selling the phone, and said it would continue those talks with an intent of selling the product as soon as possible.

Meanwhile, SK Telecom (NYSE: SKM), the country’s largest operator, is being more conservative and said it will likely wait and see how other carriers handle the product. Earlier this month, the company opened its own application store online to help boost sales of software for existing cellphones.