SK Telecom will buy cable firm

SK Telecom is jumping into the broadcast market by acquiring the nation’s largest cable television operator, CJ HelloVision, industry sources said Sunday.

It is the first time a Korean telecommunication carrier has acquired a cable TV company.

CJ HelloVision is the nation’s largest cable TV company with nearly 4.15 million subscribers and 2.4 million superfast Internet service subscribers. It is also the industry’s No. 1 mobile virtual network operator (MVNO) of so-called altteul phones, the low-end mobile telecom service that rents out networks from the three large carriers.

The acquisition price is expected to be 1.5 trillion won ($1.31 billion) to 2 trillion won, said local media reports.

SK Telecom will reportedly to complete the mergers by next April and will finalize the plan at its board meeting on Monday. Boards of CJ HelloVision and its largest shareholder, CJ O Shopping, are known to be holding meetings to finalize the sale on the same day.

The acquisition will make SK Broadband the No. 2 paid cable broadcaster, following KT.

SK Broadband will end up with some 7.5 million subscribers in the Internet Protocol Television (IPTV) business, which translates into annual sales of about 4 trillion won. SK currently has 3.25 million subscribers. KT, the industry’s largest player now, has a cumulative 8.5 million subscribers when including customers via its satellite cable broadcaster affiliate Skylife.

Also, the acquisition will help SK Telecom hold larger power in the local altteul phone sector by generating synergy between the largest player, CJ Hello Mobile, and second-largest, SK Telink, another affiliate of SK Telecom.

However, CJ HelloVision’s mobile content streaming service Tving is not part of the purchase, said industry sources. It is likely to be transferred to CJ E&M, one of CJ’s affiliates for entertainment and movie content development.

The acquisition is part of SK Telecom CEO Jang Dong-hyun’s plan announced earlier this year to focus on strengthening businesses involving media, online shopping and Internet of Things (IoT)-enabled network platforms.

SK Telecom chose to acquire CJ HelloVision instead of cable TV operator C&M, which was looking for a new owner.

BY JEON YOUNG-SEON, KIM JI-YOON [kim.jiyoon@joongang.co.kr]