Paid TV deals seen making services more competitive

With merger of SK Broadband and t-broad approved, competition in the paid broadcasting market is set to heat up.

The Ministry of Science and ICT Monday conditionally approved the proposed combination of SK Broadband, SK Telecom’s IPTV operator, and t-broad, Korea’s No. 2 cable TV operator.

The announcement was made two weeks after the ministry conditionally approved the LG U+ merger with CJ Hello.

Under terms set out by the ministry, SK Broadband must expand its high-speed internet coverage and it must continue to offer internet discount promotions to t-broad subscribers.

The discounts must be offered whether the customers continue to utilize the networks from SK Telecom or opt to use the services of its rivals, such as KT and LG U+.

The merger is expected to be complete by April.

Despite the combination, SK Broadband will rank third in the paid content market, after KT and LG U+-CJ Hello.

As of the first half of 2019, KT had 31.4 percent of the paid content market. Once LG U+ completes the merger with CJ Hello, their combined 24.7 percent market share will push them up to second place, while SK Broadband will be in third place with 24 percent in the market with t-broad.

SK Broadband currently has 14.7 percent of the market, and t-broad 9.3 percent.

Industry insiders speculate KT will attempt merging with No. 3 cable TV operator D’Live, which accounts for 6.1 percent in the market. After that transaction, it will have 37.5 percent of the market.

If D’Live also falls into the hands of the IPTV operator, paid content market is likely to be reorganized centering on IPTV.

“With the stagnation of growth in the cable TV market, the competition to produce and supply content in the long term will grow fiercer among the three mobile carriers that operate IPTV services,” said a source from the industry.

Supporting the competitiveness of domestic paid content providers has become important amid the threat from global over-the-top (OTT) service providers like Netflix, according to a political source. Disney and Apple launched their OTT services in November. Exact introduction dates in Korea haven’t been confirmed.

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