Powercomm to enter home broadband market

Powercomm Corp., the high-speed Internet unit of South Korea’s No. 3 industrial group, plans to spend about 500 billion won ($484 million) over five years to provide broadband access to homes. The company, controlled by LG Group’s Dacom Corp., expects to spend 173 billion won this year and 125 billion won next year to expand its retail high-speed Internet services, Seoul-based Powercomm said in a statement. Powercomm, which only had corporate clients, will now compete with KT Corp. and Hanaro Telecom Inc. in a market where three out of four homes have access to broadband. The service, which begins next month, will probably draw about 1.5 million subscribers and break even by next year, Chief Executive Park Jong-eung said Monday at a news conference in Seoul. Powercomm’s expansion into retail services has forced KT and Hanaro to boost promotional expenses to avoid losing customers. Earlier this month, Seongnam-based KT, which services half of the nation’s broadband users, cut its 2005 earnings forecast, while Hanaro unexpectedly posted a loss during the latest quarter and forecast a net loss of as much as 120 billion won for the year.