By Cho Jin-seo
Staff Reporter
SK Telecom is considering injecting more money into TU Media, the struggling mobile TV service operator.
SK Telecom said that its executive board will decide on issuing new shares in TU Media at its regular meeting scheduled for Friday.
TU Media has suffered some 270 billion won in losses as it failed to find profit sources with the TV-on-move service. SK Telecom is its largest shareholder, with a 32.7 percent stake. It is the only mobile phone service operator that receives TU Media's programs.
``Capital increase at TU is on the agenda of the board meeting. But we do not know how much it will be, or whether it will be approved or not,'' a public relations official of SK Telecom said. Several news reports speculated that the additional investment will be around 50 billion won ($50 million).
SK Telecom has spent 97 billion won so far. The company's former vice chairman, Cho Jung-nam, who retired on Tuesday, hinted that the company will give it one more chance at the survival of its ailing subsidiary.
``I feel sorry that the TU business is still suffering. But it still has a chance for revival, if it can adopt another business model,'' he said in his retirement speech.
TU Media is the sole operator of the satellite Digital Multimedia Broadcasting (DMB), which uses the satellite network to send TV signals to subscribers' mobile phones. Terrestrial DMB, another type of mobile TV, is also suffering from financial difficulties because of poor ad sales.
With the slogan of ``TV in your palm,'' DMB was lauded by the government and the media as evidence of South Korea's prowess in the telecommunication technology sector. But the DMB businesses, whether satellite or the terrestrial, have never been profitable as the companies failed to garner significant revenue from advertisements.
The accumulated debt at TU Media is believed to have reached 270 billion won at the end of last year, and the number of subscribers stopped growing at around 1.2 million in the summer. If the trend continues, bankruptcy seems inevitable this year, as the accumulated loss is about to devour its capital.
From January to September last year, the firm had 52.5 billion won in net losses. Though the broadcasting industry usually thrives on advertising revenue, TU media sold only 1.5 billion won worth of advertisement, which was virtually nil. About 96 percent of its income, some 86 billion won, came from subscription fees, which range from 6,300 won to 11,000 won per month per user.
indizio@koreatimes.co.kr