A man holds an Apple iPhone in this file photo. (Reuters)

South Korea's telecommunications regulator said Wednesday that Apple Inc. can sell its hit iPhone in the country, after the Korea Communications Commission lifted a ban on the popular device which may potentially shake up a cell phone market controlled by domestic manufacturers.

The country of about 48.6 million people, is widely known to use regulatory means to protect its cell phone market. This move is the reason why its homegrown Samsung and LG Electronics have become the second- and third-largest handset makers in the world, respectively.

Last December, the Korean Communications Commission (KCC) dropped a rule that all smartphones on sale in the country had to support a technology called the Wireless Internet Platform for Interoporability, or WIPI.

That ruling paved the way for sales of RIM's BlackBerry, which was available--to corporate customers only--beginning in April. However, the iPhone was still held back, due to a separate rule specifying that domestic technology must be used for location services on phones. All that changed today when the KCC issued a specific exemption for the iPhone.

The development comes a month after Apple cleared the way to enter China's massive cell phone market as well. As part of its deal with wireless carrier China Unicom Ltd., Apple is expected to begin selling the phone in China in the fourth quarter.

Around 93 percent of the population has a mobile phone subscription, and these users are known for their heavy usage of mobile data and applications.

It is not clear when Apple's touch-screen device could go on sale in South Korea or for which provider, but the country's second-largest cellular operator, KT, has already been in negotiations for months regarding the iPhone.

''We will try to release the iPhone as soon as possible,'' Yeom Woo-jong, a spokesman for KT Corp said according to AP.

South Korea's Yonhap news agency, citing KT officials it did not identify, said the company plans to start selling iPhones in South Korea next month.

The South Korean announcement comes about a month after Apple struck a deal to sell the iPhone in China through the carrier China Unicom.

The Chinese market is a large and although China Unicom is not as large as China Mobile, it surpasses the subscribers of AT&T and Verizon Wireless by more than 40 million users.