South Korea - IP Television

Telecom Firms to Spend W1.6 Trillion in IPTV

Korean telecom firms are to invest around 1.57 trillion won ($15.8 billion) on Internet-protocol TV (IPTV) services this year, the Broadcasting and Communications Commission (BCC) reported Friday.

KT, the dominant telephone and broadband Internet service provider, alone plans to spend 1.3 trillion won, and LG Dacom and Hanarotelecom respectively allotted 146.4 billion won and 122.1 billion won for the Internet TV business.

A large part of the money will be used in expanding and improving Internet networks, the report said, since it is difficult to guarantee high quality for real-time TV broadcasting on existing networks. Purchasing TV content is another big expenditure, the report said.

``By enriching the content of its Mega TV service, KT will endeavor to narrow the information gap between rich and poor people,'' a company public relations officer said.

IPTV is a system where content is delivered to TVs by using broadband Internet lines and a set-top box, instead of using traditional TV antennas, cable boxes or satellite dishes. Users can select programs they want to watch and download material via the Internet at any time they want.

The service operators are also to provide real-time broadcasting of popular terrestrial channels by ``streaming'' the programs via the Internet network this year.

Hanaro Telecom has pioneered the field in South Korea since last year. The firm is expecting its IPTV service to make a profit from the first quarter of this year. Latecomers KT and LG Dacom have also been increasing their marketing activities by offering discounts for subscribers to their telephone and Internet services.

According to the report from the commission, the firms have said that they will spend 1.06 trillion won on improving networks, 113.7 billion won on platforms, 223 billion won on set-top boxes and another 180 billion won on purchasing content. The Electronics and Telecommunications Research Institute estimates IPTV will be a 540-billion won market this year, meaning it will take a few years for the firms to start making any profits.

Government agencies expect IPTV subscribers to reach 2 million this year and grow to 3.3 million by 2012. The commission, which was the Ministry of Information and Communications, is to introduce regulations for real-time broadcasting as early as this May. Telecom and TV firms have been engaged in a tug-of-war over the price of IPTV programming.