The Top 3 Pay TV Providers, SK Broadband Merger Corporation Launches Today... What Are the Future Challenges?

[Asia Economy Reporter Seulgina Jo] SK Broadband, the merged entity of SK Broadband and T-Broad, officially launched on the 30th. With this, the domestic paid broadcasting market has been firmly reorganized into a 'Big 3' system affiliated with the three major telecommunications companies. It is expected that future moves will include content competition centered on IPTV, followed by an initial public offering (IPO) and additional mergers and acquisitions (M&A).

The newly launched SK Broadband aims to be a media platform operator based on 8.21 million paid broadcasting subscribers and 6.48 million high-speed internet subscribers, targeting sales of over 4 trillion won this year.

With the launch of the merged entity, the goal is to advance the media platform and expand the business model to enhance service competitiveness for both IPTV and cable TV. To this end, customized services utilizing big data and artificial intelligence (AI) will be provided, and investments in content and regional channels will be expanded. Cooperation within the SK group will also be strengthened by actively utilizing original content from SK Telecom’s over-the-top (OTT) service Wave.

By merging T-Broad, SK Broadband’s market share in paid broadcasting increased to 24.03% (as of the first half of last year). The KT group, including KT Skylife, still holds first place with 31.31%, but it is closely pursuing the second place LG Uplus (including LG HelloVision) group with 24.74%. Notably, as a single company, SK Broadband surpasses KT (21.44%).

SK Broadband’s biggest challenge is the IPO. Originally scheduled for the first half of this year, it has been affected by the COVID-19 pandemic. Earlier, SK Telecom CEO Park Jung-ho mentioned at the March SK Telecom shareholders’ meeting that "it could be postponed by one year" and that "the impact of COVID-19 could cause much more disruption than expected."

There is also the possibility of additional M&A. Acquiring Delive (6.1%) or Hyundai HCN (4.1%), which are on the market, could propel SK Broadband to second place in the paid broadcasting market. However, the increased management uncertainty due to the COVID-19 impact is also considered a variable.

The industry expects that as the paid broadcasting market shifts to an IPTV oligopoly centered on the three major telecommunications companies, qualitative content competition will begin in earnest. It is explained that the focus will inevitably shift from market share competition to qualitative content that customers want.

SK Broadband also plans to take the lead through such content competition in the future. Currently, SK Telecom has decided to double its content investment scale for SK Broadband and others compared to before. Investments will continue, including producing original content through the OTT Wave.

An SK Broadband official said, “As the influence of global players in the ICT industry grows, we pursued the merger to maximize competitiveness by strengthening the fundamental competitiveness of the paid broadcasting platform and expanding cooperation with various media players.” He emphasized, “We will also focus the company’s capabilities on improving the convenience of domestic media service users. We plan to significantly upgrade the quality of cable TV services currently used by existing T-Broad customers.”

This content was produced with the assistance of AI translation services.