The Year 2019 will be a cutthroat yet exciting
year for South Korea’s telecommunications businesses as the introduction of
faster fifth-generation telecom networks in March augurs upheavals in their own
and other industries.
The Korean mobile operators at the forefront of the 5G commercialization are
widely expected to escape their traditional areas of business, mainly centering
on providing high-speed internet and high-quality calls, stretching out to the
media industry by providing new services enabled by the 5G network.
Compared to the current 4G Long Term Evolution mobile network, the 5G network
provides 20 times faster speed for data transmission, allowing users to
download a 2-gigabyte high-definition movie in less than a second.
Because it is crucial for the mobile operators
to provide ideal content for the 5G network infrastructure in order to
preoccupy the new network market with new subscribers, the country’s three
mobile carriers — SK Telecom, KT and LG Uplus in order of sales — are
preparing to acquire or seek partnerships with small and mid-size broadcasters
or media content startups.
No.1 player SKT is forging ties with over-the-top mobile video content provider
Pooq, run by the country’s three terrestrial broadcasters, in order to
strengthen its own platform Oksusu that aims to rival Netflix.
SKT’s bigger plan is to spin off the Oksusu platform as one of four major
subsidiaries along with the mobile network operator, and security and commerce
arms.
This is also part of SKT CEO Park Jung-ho’s plan to establish an intermediary
financial holding company – dubbed “ICT holding company of SK Group — that
take control of the current four business areas of SKT.
KT is closely monitoring archrival SKT’s moves to start the new OTT business in
a bid to lose out in the 5G content market.
KT’s New Media Business Group will be led by Kim Hoon-bae, former CEO of Genie
Music — the mobile carrier’s music streaming platform — this year, which will
focus on developing creative 5G content for its customers.
“KT is making efforts internally to develop content for 5G, for example the
GiGA Live VR service on its IPTV platform,” said a KT official.
The company is also expanding Olleh TV
subscribers’ access to TV content further to their mobile devices by launching
Olleh TV Mobile application.
LG Uplus is gearing up for acquisition of CJ HelloVision, a cable TV channel
provider under CJ Group, in order to enhance its cable TV business.
If LG acquires the CJ channel, it would become the second-largest cable TV
service provider, beating out SKT’s Broadband with a total of 24.43 percent
market share. KT is currently the market leader with a 30.86 percent
share.
Taking a larger share of the pay TV market is becoming more important for the
mobile carriers, because their internet protocol TV service subscribers are key
customers for the home media business that would further develop into the
future content business.
“Securing ideal content for the 5G network is the key to success in the new
network market,” said an LG Uplus official. “We are seeking to enlarge the size
of the home media business by securing more content provided by competitive
third-party content providers with an ultimate goal of offering video content
for 5G mobile customers, because the home media and mobile users prefer
combined service plans.”
In an effort to attract around 300,000 Netflix users in Korea, LG Uplus has
partnered with the US OTT business to offer access to Netflix content via its
IPTV platform.
According to a report by KT Economics and Management Research Institute, the
media industry is predicted to gain 3.6 trillion won in socioeconomic value by
2030 with the commercial use of 5G technology.
The report also mentioned the 5G technology will bring augmented reality and
virtual reality content to end users, creating a new category in the media
market.
