Samsung takes KT row to court

Samsung Electronics filed an injunction with a local court yesterday aimed at halting KT’s move to curtail Internet access on the tech titan’s smart TVs.

The move comes after the nation’s No.1 fixed-line operator imposed the restriction on Samsung’s smart TVs from 9 a.m. yesterday due to fears that its network may become overloaded.

“Samsung and other related businesses have been participating in discussions organized by the Korea Communications Commission to address issues regarding network neutrality since last year, and all parties agreed to hold this year’s first meeting for smart TVs on Feb. 15,” Samsung said in a statement.

“KT’s position was that [Samsung] must pay for smart TVs’ Internet network usage, and our position was that the matter needs to be negotiated after the KCC sets its policies for network neutrality. KT’s abrupt measure hurts customers’ rights to use the network in a nondiscriminatory way,” it added.

KT countered that Samsung’s smart TVs use Internet networks without permission and that such freeloading can slow other users’ access to the Web due to the heavy rate of cyber traffic.

KT and other fixed-line operators have been requesting smart TV producers pay for the right to have the sets use their networks since June.

KT’s restriction only affected Samsung’s smart TVs as the carrier is in talks with LG Electronics over the issue of paying for network usage.

“As Samsung said it will not negotiate, we have decided to restrict access of its smart TV applications to our Internet networks,” KT said in a statement.

KT’s push may hurt efforts by Samsung, the world’s No. 1 TV maker, to increase sales of Internet-enabled TVs in the face of a general global economic slowdown that is denting sales of traditional sets.

Samsung is aiming to sell at least 25 million smart TVs this year. According to market watchers, its domestic sales could reach around 1 million.

Market observers suggested that KT is waging a tug-of-war against the tech giant so as not to lose its dominance in the realm of Internet Protocol TV (IPTV), a claim KT denies.

KT runs its own IPTV called Olleh TV, which delivers TV and movie content in real-time via broadband Internet networks.

“When smart TVs become popular and more customers switch over to them, the number of Olleh TV subscribers will dwindle, because some of the IPTVs’ features, including Internet access and VOD [video on demand], overlap with those offered by smart TVs,” said an analyst at a local securities firm, who asked not to be named. “KT doesn’t want this to happen.”

The analyst said KT and other telecom companies feel frustrated by the low returns they are seeing after investing heavily in expanding their wireless Internet networks to handle burgeoning levels of traffic, which have grown in tandem with the emergence of smartphones. Their sense of injustice was compounded at seeing Apple and Samsung rake in huge profits without investing in the networks.

“However, if companies have to pay for the privilege of having their smart TVs use the networks, KT would not have to fret about the potential drop in Olleh TV subscribers,” the analyst said.

By Kim Mi-ju, Yonhap [mijukim@joongang.co.kr ]