By Cho Jin-seo
Staff Reporter
The broadcasting and communication market is going through a rough and tumble period as the borders between mobile phone, Internet and TV industries become blurred.
The Korean Cable TV Association said yesterday that its members will make inroads into the mobile phone service market this year, by reselling handsets and services of existing telecom companies SK Telecom, KTF and LG Telecom.
It is a bold counterattack from the usually passive cable TV firms. So far, the cable firms have only been demonstrating, and lobbying the government to block the entry of telecom firms, especially SK Telecom, onto their turf. The mixing of TV and phone companies is expected to spark a price war, which will eventually benefit the consumers.
``We will advance to the mobile communications market by leasing the network of telecom firms,'' said Yoo Se-jun, the association's new chairman. The former vice minister of the Bureau of Public Information was elected to the post last week. ``We will introduce `quad play' products that combine broadcasting, high-speed Internet, Internet phones and mobile phones. The communication service prices will go down as the competition between broadcasting and the telecommunications industry heats up,'' he said.
The convergence of telecom and broadcasting has been a major issue in the industry and in the government since last year. The two sectors have been protected from each other, with the former being supervised by the Ministry of Information and Communication, and the latter by the Korean Broadcasting Commission, a presidential agency. But the government has been trying to merge the two sectors in order to encourage market competition.
SK Telecom was one of the most aggressive players in this trend. The No. 1 telecom service operator made a contract to purchase Hanarotelecom, the second largest Internet service company that also has some 1 million subscribers of Internet-Protocol TV. It is waiting for the government's approval on the purchase.
The incoming Lee Myung-bak government has also said that it will allow firms to sell triple- or quad-play products, so consumers can be offered discounts by firms.
Allowing the reselling of mobile services has been another option in the government's plan. Such a business is called Mobile Virtual Network Operator (MVNO) in the industry. It refers to selling of mobile phones by companies that do not have its own frequency allocation and network infrastructure. Usually firms with large retail networks, such as banks, discount stores and the post service, are considered to be ideal for the MVNO business. The government has been considering forcing SK Telecom to open its network to MVNOs, hoping this will encourage the firms to lower their telecom charges.
indizio@koreatimes.co.kr