HanaTV turns 1 amid growing subscribership

Pseudo-Internet TV service, hanaTV, celebrated its first anniversary yesterday, and analysts are debating whether its rosy performance will positively affect Hanarotelecom as a whole. The telecom firm’s main shareholders, AIG and Newbridge Capital, are trying to sell it.
The company’s hanaTV is similar to Internet TV in that it enables on-demand video playing, but with slight technical differences. It offers a vast variety of movie, documentary, music and public TV channels.
Currently, hanaTV has 540,000 subscribers, and the company is aiming for a total of 1 million by the end of this year. According to Kim Kyoung-mo, a researcher at Mirae Asset Securities, 1 million subscribers will enable the Hanarotelecom to pass the break-even point; 2 million will allow it to enter the broadcasting advertisement market.
Thanks to hanaTV, Hanarotelecom has a favorable position in offering bundled services. In February, it offered hanaTV and high-speed Internet service at lower rates if subscribers used both.
The telecom firm now maintains a somewhat stable 25-percent share of the broadband market pie, leading to improving performance. Although the fourth quarter last year reported deficits due to investment in hanaTV, the company’s operating profits went into surplus this year. Its credit rating has also gone up. On June 11, rating agencies revised it to A-. For two years since June 2004, the company’s credit rating had been BBB.
Although hanaTV has improved the company in many aspects, buyers are still hesitant. In a recent bid for the company initiated by Goldman Sachs, expected bidders such as the SK and LG groups as well as Singapore Telecom all reportedly did not participate.
KT, the largest fixed-line telecom firm, has launched MegaTV to compete with hanaTV. MegaTV started services this month, and KT plans to increase subscribers to 1.3 million by the end of next year.

By Lee Na-ri JoongAng Ilbo/ Wohn Dong-hee Staff Writer [wohn@joongang.co.kr]