Hanaro Seeks to Be `Convergence Leader
By Cho Jin-seo
Staff Reporter
One of the most upbeat companies in Korea these days is Hanaro Telecom. Celebrating its 10th anniversary this month, the firm is shedding the boring image of No. 2 telephone operator and is reshaping itself as a creative player in the media industry.
Inaugurated on Sept. 23, 1997, Hanaro has survived 10 years through the hurly-burly of the telecommunication industry, which saw many giant firms wither or go bust. Now, it is the hugely successful launching of Hana TV, an Internet Protocol TV service, which has encouraged and empowered the firm to raise its ambitions.
``Hanaro Telecom must develop itself into a multimedia company, based on network technologies and focused on sales and marketing,'' said Park Byung-mu, the chief executive officer, in his new year's speech last year, hinting that the firm would bet on Hana TV and other media services.
At the time, his remark didn't appeal to employees and customers very much, a company official said. Such a lukewarm response was natural because the company had a solid image as a provider of telephone and broadband Internet services and not as a media service company, he said.
It took just a year for the leader's vision to become a reality. Hana TV has drawn more than 500,000 customers over the past 12 months since its launch in the summer of 2006, a feat never accomplished by any other firm in the world. Furthermore it expects the figure to double by early next year.
By utilizing its well-established broadband network that covers more than 80 percent of South Korean households, it could become the world's leading IPTV provider in terms of quality of service and rate of growth. It is expected to become the largest player in the world in subscriber numbers within this year, passing Hong Kong's PCCW which has around 820,000 users.
Hanaro's march is not likely to stop there. For the next step, the firm plans to make inroads into the mobile phone service sector next year when the government opens up the market for new players, according to Mark Pitchford, the chief marketing officer.
Numbers also show the cheerful atmosphere of Hanaro. The firm saw its largest quarterly revenue of 462 billion won in the second quarter of this year with an operating profit of 19.4 billion won. It also posted a net profit of 2.1 billion won, after nine consecutive quarters of net losses.
Such an improvement has made it an attractive M&A target for Korean and foreign firms and investors. It is currently controlled by American Investors Group (AIG) and Goldbridge of the United States. About a dozen firms have expressed interest in making a bidding for the firm, whose sale price has been estimated at more than 1 trillion won.
For the year 2010, Hanaro wants to achieve 2.7 trillion won in sales and 410 billion won in net profit. The success of Hana TV alone won't be enough to attain the goal, Park says.
``We have to keep nurturing innovative and creative ideas inside our organization, as well as seeking new business opportunities outside,'' he said.