IPTV Will Bring Sea Change
Three months ago, Lee Ji-eun had to fight off the desire to leave work early to catch must-see soap operas that usually air after nightly news programs. A miss for her meant not just losing the soaps' storylines but also the need to confirm re-run schedules.
Now, the 34-year-old English instructor, who starts work in the late afternoon and leaves just before midnight, doesn't worry anymore thanks to a video-on-demand (VOD) TV service that she subscribed to recently, despite a problem with the pre-version of Internet protocol TV, popularly known as IPTV.
``I started to subscribe to 'Hana TV' of Hanarotelecom Inc. that offers diverse TV programs including dramas, news, movies through high-speed Internet connections for about 10,000 won a month ($11),'' Lee said. ``I don't have to worry about missing a drama since I can watch it and all the others in the current season over the weekend.
``However, one problem is that I have to sign up to cable TV to watch programs and other major channels live since I have to wait at least 24 hours to view contents through Hana TV.''
The hitch with the experimental Internet TV service has been a huge obstacle that blocks more people from joining the new TV-viewing trend. But it will likely be resolved soon as a special committee of the National Assembly approved a bill last week, paving the way for the introduction of nationwide IPTV.
Though the bill failed to receive a final endorsement during a plenary session, which ended Friday, due to some technical issues, it is expected to pass the parliament at an extra session to be held within this year, observers say.
The bill, if finally passed, would allow the establishment of nationwide IPTV service equipped with real-time TV program transmission. It would also enable KT Corp., the nation's largest fixed-line Internet operator, to run its own VOD TV service.
IPTV, which refers to a digital television service delivered by high-speed Internet, has been promoted as a major convergence between broadcasting and communications. Currently available VOD services lack such key IPTV feature as real-time broadcasting.
Broadcasters and cable operators have argued for the past three years that a nationwide IPTV service controlled by communications firms would chip away at their presence in the fixed-line and broadcasting markets of local communities. Communications companies, however, say that it is a new medium and should be controlled by a new legal framework.
``As Hana TV proves the potential of IPTV, the passage of the bill would act as a catalyst to accelerate the development of Internet TV through which viewers can shop, make financial transactions and even watch TV programs live,'' said Jung Seung-gyo, an analyst at Woori Investment & Securities.
``Though it will face opposition from the broadcasting community, it should go ahead, since a further delay would mean South Korea would be left behind in global IPTV competition,'' he added.
KT and Hanarotelecom, two communications giants, are expected to benefit greatly from the bill, analysts said, as the new medium would likely create revenue sources for their businesses, which are facing market saturation in fixed-line telephony and the Internet. The two companies currently run their own VOD-based Internet TV operations, which have about one million subscribers combined.
According to the state-run Electronics and Telecommunications Research Institute, IPTV-related businesses are forecast to generate 12.9 trillion won in production and create 73,000 new jobs by 2012.
``We expect IPTV to bring in additional revenues at a time when the fixed-line communications market nears saturation,'' said Oh Dong-jin, a spokesman for Hanarotelecom. ``The allowance of nationwide IPTV will serve as a boost for Internet TV, which has been providing limited VOD-based contents to customers.''
KT, which has the largest number of Internet customers, has increased its investment for a full swing into IPTV. This year alone, the company assigned 140 billion won to its IPTV business and is bracing for the looming battle in the new industry sector.
``We plan to complete the nationwide coverage of IPTV by the end of next year,'' said Oh Tae-sung, a KT spokesperson. ``Compared with other companies, including cable operators, we are a step ahead with the Internet and other infrastructure."
Amid such bright expectations, KT shares soared to an all-time high of 50,600 won on Friday.
The IPTV bill comes as the local communications industry is experiencing a seismic change after the government began allowing operators to bundle services such as the Internet, telephony and others at a discount.
That move caused a price war, as mobile, Internet and other telecom operators see no boundaries and IPTV will be another service available for bundling, analysts said.
However, cable operators are unhappy and called on lawmakers to revise the bill or enforce a guideline that would guarantee fair competition in the next-generation TV arena.
Currently, cable networks must operate in 77 different service zones across the country. This means that they will not be able to obtain a nationwide business license for digital TV, which many say would provide a similar TV-viewing experience to IPTV.
The bill reflects their concerns, limiting a single telecommunications firm's share to a third of the total number of IT customers of each zone, though cable operators claim that it is still not enough.
They also have expressed concerns that the entry of telecom dinosaur KT into the IPTV sector would have a detrimental impact on the profits of small- and medium-sized cable service providers.
``We feel betrayed that most of the demands that KT has made were reflected in the bill but few of ours are there despite three years of opposition,'' said Kim Min-jeong, a spokesperson for the Korean Cable TV Association.
``We will step up demand for a revision of the bill and ask for eased regulations on cable operators similar to the regulations Internet operators would enjoy under the new bill, she said.
Due to the battle between the communications sector and broadcasting, the introduction of IPTV has been delayed for years even though the infrastructure, including high-speed Internet connections, are available. South Korea is one of the world's most wired countries with 90 percent of households having access to high-speed Internet.
Customers, however, are not interested in who controls and provides the IPTV service. Their main concern is to view TV programs cheaply and conveniently.
``The important thing is how I can view TV programs. Currently I have to pay extra to watch major channels but I'm happy that I be able to reduce spending on TV thanks to the bill, though more time is needed before it goes into effect,'' said Lee, the English instructor. (Yonhap)