Broadband TV Stutters Out of Gate
By Kim Tong-hyung
Staff Reporter
Telecommunications companies are touting Internet television as the next revolution in household entertainment. However, their claims are hardly convincing when coverage is mostly limited to Seoul.
Internet protocol television (IPTV), or the delivery of video broadcasts over broadband Internet networks, allows a wealth of interactive services such as video-on-demand, online commerce and data transactions as well as conventional television.
The country's top fixed-line telephony carriers ― KT, SK Broadband and LG Dacom ― are currently gathering subscribers for their IPTV services launched in December and this month.
The companies hope that television could provide a significant revenue source to help compensate for a saturated telephone market. However, their confidence isn't strong enough to have them spend lavishly to upgrade their networks and purchase content to support nationwide coverage.
And although IPTV is sexy as a technology, whether the networks are providing much to see is a completely different matter as operators struggle to secure enough quality contents to compete against other pay-TV formats such as cable and satellite television.
KT, the industry kingpin, is the only one of the three IPTV operators that has the network to provide the television services outside Seoul and the metropolitan area.
Considering the large amount of data and traffic moved, building fiber-to-the-home (FTTH) networks are required to offer IPTV services.
KT, which controls about 90 percent of the country's fixed-line telephony customers and nearly 45 percent of broadband Internet subscribers, said it is capable of providing IPTV to nearly 70 percent of its broadband customers, or about 4.6 million households. The company hopes to replace about 95 percent of its broadband networks by FTTH by the end of the year.
In comparison, SK Broadband and LG Dacom aren't providing a timeline on when their IPTV services will hit nationwide.
LG Dacom is only providing its IPTV services in Seoul and Gyeonggi Province. SK Broadband's television service is limited to Seoul, and that doesn't include Mapo-gu where the company is borrowing the network of a local cable television operator to provide its broadband services.
``Our IPTV coverage can only be based on the spreading of our broadband Internet subscribers, so it's hard to pinpoint when we will be providing IPTV on a nationwide basis,'' said an SK Broadband spokesman.
LG Dacom, on the other hand, has the network to compete with KT for a nationwide television audience, thanks to its 600 billion won investment since 2000 to upgrade its network.
However, securing partnerships with regional channels, which own the retransmission rights for national channels MBC and SBS in their respective areas, have been a problem for the smallest IPTV carrier.
In fact, the securing of content is proving to be a problem for all three IPTV operators.
In granting licenses to the three companies last year, the Korea Communication Commission (KCC), the country's broadcasting and telecommunications regulator, required the companies to provide at least 60 channels on their networks by the end of the first quarter of this year.
However, matching the requirements will be a challenge, as KT is currently providing only 40 channels, while SK Broadband and LG Dacom are providing 23 and 21, respectively.