Facing a looming battle with global media behemoth Netflix, mobile carrier SK Telecom said Wednesday it would invest around 5 trillion won ($4.3 billion) in beefing up its media platform business for the next five years.
The investment plan came on the heels of the firm’s announcement of acquiring CJ Hellovision, the nation’s largest cable TV operator and an affiliate of CJ Group.
The Korean mobile carrier unveiled its plan earlier last month to merge its wholly owned Internet TV operator SK Broadband with CJ Hellovision.
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Lee Hyung-hee, president of SKT’s mobile network operations, explaines about the merger plan between SK Broadband and CJ Hellovision in Seoul Wednesday. (SKT) |
“The merger and acquisition will help SKT to have a competitive edge in the global media market with innovative services and technologies, and elevate the competitiveness of the domestic media industry,” said Lee Hyung-hee, president of SKT’s mobile network operations.
With the investment, the mobile carrier will improve its cable network to enable digital and UHD TV services, and support content creators and start-ups, all of which will generate around 50,000 jobs and 7.5-trillion won worth of production inducement, the company said.
In a bid to vitalize the culture and content industries, it seeks to carry various content and services -- including video-on-demand and multi-channel networks -- on the new media platform to be run by the merged firm.
The media platform will also be connected to other smart home devices and services to maximize user experience, according to SKT.
The merger plan, however, has incited an overwhelming backlash from rivals in the cable TV market, including mobile carrier KT which runs cable TV service olleh and satellite TV service Skylife.
KT whose combined number of subscribers for olleh and Skylife stand at 8.4 million berated its rival SKT, which holds around a 50 percent market share, saying the No.1 mobile carrier is “flexing its muscles in the TV media industry.”
Comparing SKT’s merger plan to the merger deal between Comcast and Time Warner Cable, which was blocked by U.S. regulators earlier this year, mobile carrier and Internet TV operator LG Uplus said the planned merger would “put the TV content industry in complete disorder as it would help SKT have monopolistic control in the sector.”
Some market watchers see SKT’s latest move as part of its preparation for competition with global streaming TV service providers, including Netflix.
Netflix, which has 69 million subscribers in more than 60 nations, is planning to launch its operations in Korea next year.
At a press meeting held in October in Seoul, Netflix announced its plan to make its media content available with all digital devices including TVs, PCs, mobile devices and game consoles in Korea.
By Kim Young-won (
wone0102@heraldcorp.com)
