SEOUL, March 31 (Korea Bizwire) – The three major telecommunications companies clashing over SK Telecom’s purchase of CJ Hellovision are once again butting heads as they have different interpretations of the Broadcast Market Competition Assessment issued by the Korea Information Society Development Institute (KISDI).
KT and LGU+ were concerned that the influence SK Telecom is casting on the mobile phone industry would spread rapidly to the broadcasting industry once its acquisition of CJ Hellovision is finalized. They claimed that SK Telecom and its affiliates’ share of the telecommunications broadcasting bundle market is 44.8 percent, and they even command more than half (53.9 percent) of the market for consumers with all bundled commodity services.
“SK Telecom ranks first for market share and number of membership customers because it makes use of its human and physical resources in SK Broadband’s consignment sales of broadcasting content,” they elaborated.
KT and LGU+ continued their argument quoting the report. “The report states the possibility that service operators (SO) could have lower competitiveness than IPTV service providers when it comes to selling bundled commodity services.”
“This clearly shows that SK Telecom’s influence in the broadcasting market is the main cause of the lower competitiveness of SOs,” they went on to say.
The two companies state that the government’s efforts to revitalize competition in the paid broadcasting market would go down the drain once SKT acquires CJ Hellovision. “Users will be limited when choosing content, and the bargaining superiority of program providers will be reduced. The merger will only result in negative effects for the industry as well as consumers,” they said.
However, SK Telecom did not accept the argument that it has control over the paid broadcasting market. “Broadcasting services bundled with the telecommunications services of SKT and its affiliates only take up 7.8 percent of the total paid broadcasting market. The numbers are far too humble to discuss market domination.” They added that telecommunications broadcasting bundle services only take up 17.8 percent of the total market.
SKT mentioned that LGU+ is the company that showed the most dramatic growth in the field, mentioning they were the only telecommunications company to see its membership double (104.7 percent increase).
SKT also emphasized that KT still has the most influence in the paid broadcasting market, as 41.8 percent of the net memberships subscribing to paid broadcasting services migrated to KT.
In addition, SKT claimed that the drop in the SO’s market share is mainly caused by the transition from cable TV to IPTV. “It is unreasonable to link the matter to the spread of influence”, they stated.
By Francine Jung (email@example.com)