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Internet Protocol Television will be available from October, and fixed-line telecom providers KT, Hanaro Telecom and LG Dacom are already in fierce competition to win crucial business rights. IPTV offer television broadcasts via Internet networks. KT and Hanaro Telecom, which provide high-speed Internet connection services, have so far only offered video on demand services but are getting ready to offer real-time IPTV broadcasts of KBS, YTN and other terrestrial and cable broadcasters.
A significant number of people who have been watching TV on cable are expected to switch to IPTV. As of August this year, 1.6 million households had signed up for VOD IPTV services.
¡ß Major investments
KT formed a committee on Monday headed by its president Nam Joong-soo to oversee the business project. It is rare for the CEO of a company personally to lead an individual business project committee, which at KT was usually led by the executive in charge of different operations, including major bids such as PCS mobile communications services. Nam said IPTV was a ¡°core¡± business project for KT. The situation is the same at Hanaro Telecom, which formed an IPTV promotion committee at the beginning of the year.
The companies invest hundreds of billions of won each year in new business projects. KT will invest W710 billion (US$1=W1,032) to expand the network capacity to offer IPTV services. It will also invest around W110 billion this year to enhance IPTV software and install more servers. And the firm is busy developing educational and community content. A prime example is the CUG (closed user group) service, referring to a select number of channels that only members can tune into.
In the case of KT¡¯s Mega TV, a Christian broadcast menu has been created allowing viewers to watch sermons from individual churches, as well as information on the latest events in the religious community. Similar services are being offered in Internet information involving beauty treatments and lectures by Seoul Digital University. Companies can also offer in-house broadcast services using CUG. Hana TV, by Hanaro Telecom, offers in-house broadcast services for the 3,000 nationwide branches of the Korea Federation of Community Credit Cooperatives.
¡ß Lucrative future?
How many viewers are expected to tune into IPTV? If all goes as planned, the Electronics and Telecommunications Research Institute forecasts 2.2 million households will switch this year, rising to 4.95 million in 2012. That translates into W1.28 trillion in sales in 2012. Another reason experts are predicting an increase in viewers is that KT and other fixed-line service providers plan to offer products that fuse IPTV services with their own products in the areas of mobile communications and high-speed Internet access.
But others warn that IPTV may not be all it is trumped up to be. If IPTV broadcasts are nurtured to boost the growth of fixed-line telecom providers, critics say it would be difficult to change existing viewing patterns inculcated by cable and terrestrial TV broadcasts. KT and Hanaro Telecom are in talks with broadcasters to offer programs, but huge differences apparently remain. In the worst-case scenario, only partial broadcasts may become possible through IPTV.
Kwon Ki-duck, a researcher at Samsung Economic Research Institute, warns the success or failure of IPTV service providers will depend on the quality of content they will be able to secure.
(englishnews@chosun.com )
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