Broadband, IPTV put SKB back on track
By Kim Tong-hyung
The past few years have been tough for SK Broadband, formerly Hanaro Telecom, which has struggled to compete with industry giant KT in fixed-line telephony and broadband Internet services in a quickly-saturating domestic market.
However, the company finally appears to be nearing the end of the tunnel, as it has acquired a growing number of customers for new ``convergence'' services like Internet telephony and Internet protocol television (IPTV).
These products are becoming a crucial part of SK Broadband's discount packages that offer fixed-line, wireless, broadband and Web-enabled television under a single bill, allowing them to win over customers in markets where KT reigns.
SK Broadband, the fixed-line unit of mobile telephony king, SK Teleocm, reported a loss of 44.3 billion won (about $39 million) during the first quarter on revenue of 493 billion won, which was a 12.5 percent increase year-on-year. But industry watchers believe the company will likely turn back to black during the second-half of the year.
Such optimism is supported by SK Broadband's continuously expanding customer pool, as the company continues to strengthen its position in its main markets and gain traction for new services. The company is targeting 600 billion won in revenue for 2010, which would represent a 15 percent annual increase.
``Our goal is to deliver valuable services to our customers and build on a foundation for sustainable growth. We will also strengthen our alliance with SK Telecom and achieve enhanced competitiveness both in fixed-line and mobile businesses,'' said Kim Young-chul, SK Broadband's chief financial officer (CFO).
``We believe the company will really be firing on all cylinders next year, when our strengthened customer pool for broadband Internet, IPTV and Internet telephony improves our profit structure.''
SK Broadband is gaining a healthy influx of subscribers for its telephone services, adding more than 292,000 users to its customer pool during the first quarter alone. The company also gained 32,000 customers for its premium broadband services, which provides Internet speeds of 100 megabits per second (Mbps) or faster, during the first three months of the year, pushing up the total number of customers to 3.15 million.
More than 963,000 of SK Broadband users are subscribed to the company's bundled service packages, indicating that the company is establishing an edge in cost competition.
Aside from targeting household customers, SK Broadband is also finding an increasing demand from companies, schools and other organizations for its IPTV-related services and businesses. The company is also developing services that enable customers to view its IPTV content on a variety of devices including computers and data-enabled mobile phones, and will foster a developers' network to improve its wealth in content.
The company launched a new fixed-line brand, ``B,'' last month, and is also collaborating with SK Telecom to push fixed-mobile convergence (FMC) services, which is expected to generate significant demand from business users.
``The growing customer pool and advanced network will provide a foundation for SK Broadband to turn back to black. The growth of its main businesses in telephone and broadband Internet is inspiring,'' said Lee Dong-seob, an analyst from SK Securities.