IPTV wars and WiBro truce ?

The Korean telecom regulator awarded IPTV licenses to KT (mega TV), Hanarotelecom (HanaTV), and LG Dacom (myLGTV). Trials start next week, and negociations with broadcasters are still raging.

Up to now*, the trio mostly competed on VOD exclusivities (price for myLGTV), but after an intensive summer of lobbying, they expect to propose real-time TV from major broadcasters from October on.

Korean authorities are also considering Voice over WiBro, the very day KT announced a MOU with a Japanese player.

But UQ Communications Inc is not likely to roll out WiBro : it is supposed to launch a WiMAX service next year, and recently inaugurated its first WiMAX trial base station. Besides, Intel owns part of its shares (other investors : KDDI Corporation, Kyocera, East Japan Railways, Mitsubishi UFJ Financial Group, the Bank of Tokyo, and Daiwa Securities Group).

The MOU is about finding roaming solutions at the hardware and middleware level, so that WiBro users (mainly pro users) can somehow use the same device when they travel to Japan.

Korean players making the first move, and the regulator giving a push to the techno... combined the same day, these two pieces of news don't sound that positive for WiBro


* see "IPTV in Korea" (20080508)

SK Telecom's Semestrus Horribilis

The light at the end of the tunnel ?

Starting August 8, Hanarotelecom will offer quad play bundles featuring synergies with its new owner SK Telecom (probably under the SK Broadband brand). Telemarketing operations, suspended following a scandal over personal information leaks, are to resume August 11.

When SKT integrated it last February 22, Hanarotelecom claimed a 24.6% market share for broadband internet subscriptions (3.6M, 1M of which FTTH : 100Mbps optical LAN network coverning over 12M households), and 8.9% for fixed telephony (2M lines).

SKT paid a dear price for this, not to mention a few obligation imposed by the regulator (to open their mobile internet gates beyond Nate, to share access to their 800MHz frequencies, to invest massively in suburban networks...), and legal consequences of the personal information scandal. SKT considers suing former shareholders Newbridge and AIG for not mentioning this practice :
Hanarotelecom has been massively losing customers (even on the booming IPTV market : Hana TV has lost 50,000 customers over H1 2008 while KT's Mega TV gained 220,000 and myLGtv 70,000), thousands are filing for a class action suit, and even more through direct channels.

After a first half of 2008 which saw local rivals KTF and LG Telecom revive, US rival Virgin absorb Helio, and such brands as TU media and T struggle, SK Telecom has an opportunity to redeem itself, provided it delivers the goods and wages the convergence wars as a respectful leader.

A disruptive move would be to boost VoIP on a market that lags behind many others, to the risk of endangering voice revenues even in the mobile business. It's time to leverage on SKT's already multiplatform services and to restore some of the brand's fun factor.

IPTV in Korea

A 100 Mbps connection, a brand new Homevita home networking service including a complimentary Samsung Q1 Ultra (slick, black, DMB enabled, lovely keyboard). And all I can get is VOD channels. The closest thing to live TV I get is through classic web browsing or through CCTV (most exciting Reality TV program : who paid me a visit the last few days ?).

Forget about real time broadcasting : the Ministry of Information and Communication is in favor of it but the Korea Broadcasting Commission lobbied against it. The freshest news, sports or series you can get must be at least 24h old. And provided your IPTV service reached an agreement with the broadcaster, you must pay for them (like KRW 500 apiece - never mind those corny loyalty program points).

24 hour old ! Ancient by the standards of a (supposedly) information / knowledge society where 90% of households are already enjoying pay TV, where internet / mobile banking is commonplace, where interactivity starts when you wake up and stops when you fall asleep.

In spite of this key regulatory hurdle (the only reason why France is still a leader in commercial IPTV), and the competition of so many technos (including DMB*) IPTV is on its way to 3 M subs by EOY 2008.

And Daum still wants to become the 4th player this summer ; a TVNO on its competitors' backs with powerful partners : Microsoft (platform and Xbox 360 access), Celrun (set top boxes), and NHN / Naver (Korea's second portal and already a key VOD and TV aggregator - see Naver VOD or Naver TV news for example)

The competitors ? The usual suspects :
- SK Telecom : the mobile leader is wolfing pionneer and leader Hanaro Telecom down. HanaTV targets 1.8M subs EOY (800k EOQ1 2008) with a break-even point at 2M.
- Korea Telecom (on the way to merging with KTF) : Mega TV has the cutest logo and the best network (optic fiber all the way through its Megapass broadband subsidiary).
- LG Telecom : #3 as always for the TTM as well as the market share. myLGTV has the weakest VOD catalog but that's better than nothing.

These 3 players just reached the 10M 3G subs plateau : 5.28M for KTF (+440K for Show in April), 4.68M for SKT (+470K for T Live) and 190K for LGT's Rev. A service.

* KBS, a top broacaster, is also national and regional T-DMB license holder (with KTF) - about U-KBS (VOD, KBS Star, KBS Heart, KBS Music, KBS Data, KBS-Mozen TPEG telematics... - yet another "Ubiquitus" service), see kbs.co.kr/dmb.