SK Telecom may acquire Hyundai HCN
SK Telecom CEO Park Jung-ho speaks during the company's general meeting of stockholders at its headquarter in Seoul, March 26. / Courtesy of SK Telecom
By Kim Jae-heun, Baek Byung-yeul
The country's largest wireless carrier SK Telecom may acquire cable TV operator Hyundai HCN, industry sources said, Tuesday. Hyundai HCN is now up for sale after its mother company decided to unload it.
All three of the country's mobile carriers ― KT, LG Uplus and SK Telecom ― are tapped as “potential buyers” of the pay-per-view TV operator but SK Telecom is the strongest candidate, they said.
SK Telecom has lost its No. 2 position in the pay broadcasting market to LG Uplus after the latter acquired cable TV operator CJ Hello. SK Telecom also bought the country's No. 2 cable TV operator t-broad in the same year, but still lost its position to LG Uplus.
An industry analyst said the country's top mobile carrier will continue pursuing an additional merger as this is the simplest way to reclaim the No. 2 pay TV player position and further seek the No. 1 rank.
“If SK Broadband merges with Hyundai HCN, the combined entity will be able to secure 27.5 percent of market share with 9.53 million subscribers,” Choi Nam-kon, an analyst at Yuanta Securities Korea, said. SK Broadband is owned by SK Telecom.
Hyundai HCN has less subscribers compared to its chief rival D'Live, No. 4 player in the pay TV market, but the company was looking quite stable in terms of total debt amount as most of its subscribers are concentrated in the upmarket Gangnam and Seocho areas of Seoul.
Hyundai HCN had a total of 1.34 million subscribers as of the first half of 2019 making it the No. 6 player in the market at that time. Regarding a potential merger of Hyundai HCN, SK Telecom said it is not considering a takeover of the cable TV operator.
“There has been investment reports from analysts that SK Telecom would acquire Hyundai HCN, but we don't have any plan to do so,” an SK Telecom official said. “Currently we are concentrating on finalizing an acquisition deal of t-broad and are not considering an additional merger and acquisition deal,” the official added.
In 2019, SK Telecom's fixed broadband subsidiary SK Broadband received the government's approval to merge with t-broad, the country's No. 2 cable TV operator, in a bid to expand into the media business. After merger completion, SK Telecom was able to its internet protocol TV (IPTV) business, operated by SK Broadband and t-broad's cable TV business, helping it to increase the number of subscribers to 8.2 million in the country's pay TV market.
Hyundai HCN was also said to have approached KT; however, it's unlikely that KT will initiate its plan to acquire HCN as its new CEO Koo Hyun-mo was hoping to focus on ensuring the company's internal stability first.
LG Uplus can also join the bid for the M&A of Hyundai cable TV operator to throw its chaser SK Telecom off the scent, which is only 0.69 percent behind in terms of market share. It sold off its payment gateway business last November so it has money to acquire Hyundai HCN.