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IPTV on hold in South Korea

Local officials stalling TV tech boom

SEOUL — Competition is growing in South Korea’s Internet protocol TV sector, even though the full rollout of the technology continues to be delayed by local bureaucrats.

Telcos KT and Hanaro Telecom, both IPTV pioneers, have been keen to launch the service for years.

However, a long-gestating spat between the Ministry of Information and Communication and the Korean Broadcasting Commission over who should regulate the technology has delayed the necessary regulations.

Last month, a joint committee made up of members from both sides was dissolved without reaching agreement. Focus has now shifted to the National Assembly, where a group of lawmakers are pushing to introduce a regulatory framework through legislation.

Meanwhile, Hanaro and KT have dipped their toes in the water with “pre-IPTV” services HanaTV and MegaTV. Although neither isallowed to offer real-time broadcasting, the services are quickly attracting a mainstream consumer base.

Launched in July 2006, HanaTV is centered on video-on-demand services and has signed up 540,000 households in its first 12 months. It offers 66,000 programs available for download (older content for free, newer programs for a small fee) for a monthly subscription of $10.65.

The popularity of HanaTV has caused Hanaro’s stock price to soar and also provided an unexpectedly solid source of income for content providers, including the local film industry.

Meanwhile, rumor has it that various multinational corporations have offered up to 10 separate bids to acquire Hanaro. A consortium led by AIG and Newbridge Capital owns a controlling 39% stake in the company.

MegaTV, an upgrade of an older service, was introduced on June 4 and has attracted some 50,000 customers. Priced at $8.60 per month, KT aims to have 300,000 subscribers by the end of the year. Apart from offering films, dramas, animation etc. on VOD, MegaTV also offers interactive services such as banking, stocks, shopping and newspaper viewing. Both HanaTV and MegaTV also offer selected content in high definition.

Meanwhile, LG Telecom is preparing to launch a service in mid-September, also centered on VOD. A fourth conglom, SK Telecom, is studying the market with an eye toward launching a service of its own.

HanaTV and MegaTV have already completed preparations for the full launch of IPTV, in the hopes of a law passing by the end of the year. The future addition of real-time broadcasting is expected to give a major boost to business.

In the case of HanaTV, a simple patch should enable viewers to upgrade to the new service without changing any equipment.

Ironically, South Korea, as a leader in broadband technology, boasts probably the most advanced IPTV infrastructure of any country in the world.

For the moment, however, both customers and the companies who wish to serve them have to settle for only half of a good thing.

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