SK Broadband to merge with cable company t-broad

SK Telecom said its subsidiary SK Broadband will merge with the country’s second-largest cable TV operator t-broad on Thursday.

SK Telecom signed a memorandum of understanding with Taekwang Group, the largest stakeholder of t-broad, tentatively agreeing on the merger. The move comes just a week after LG U+ announced it will acquire a controlling stake in CJ Hello, the largest local cable TV company.

“[Through the merger], SK Broadband and t-broad will lead the media market by expanding investment in content in the future and offering an innovative platform,” SK Telecom said in a statement.

SK Telecom will become the largest shareholder in the new entity if the deal goes through.

Through the merger, the total number of combined subscribers will add up to 7.68 million, accounting for 23.8 percent of the paid-TV market. The number of subscribers for t-broad’s cable TV stands at 3.14 million as of June last year, according to statistics provided by Ministry of Science and ICT. The total number of subscribers for SK Broadband’s IPTV television service was 4.54 million as of the same period.

Following the merger, SK Broadband will be in third place in the paid-TV market, after KT with 30.86 percent and LG U+ with 24.43 percent, once its deal with CJ Hello is completed.

“IPTV and cable TV act as the linchpin for leading the local paid-TV market,” said SK Telecom. “We will create a healthy ecosystem for media by beefing up the strengths of IPTV and cable TV while seeking the mutual growth of the two.”

SK Telecom said it will actively attract investment from financial investors both inside and outside the country. The plan is seen by some industry insiders as part of a longer-term plan to merge with other paid-TV operators.

D’Live, Korea’s third-biggest cable company, and CMB, the fourth biggest, could be strong candidates.

D’Live is also being sought by KT, which is reportedly considering acquiring it. But with KT and KT SkyLife’s combined market share already standing at 30.86 percent, the company will only be able to move forward with the acquisition after the National Assembly comes to a decision on paid broadcasting regulations.

The National Assembly’s Science, ICT, Broadcasting and Communications Committee is set to decide next Monday whether to reintroduce a regulation that expired last June that prevents a paid-TV provider from controlling more than 33 percent of the market.

BY JIN MIN-JI [jin.minji@joongang.co.kr]