Nashinpyung "SK Broadband, Long-term Credit Rating Upgraded from AA- to AA"

Strengthening Competitiveness in the Pay TV Market through TiBroad Absorption Merger
Positive Factors Include Potential Support from SK Telecom and Strong Financial Structure

[Asia Economy Reporter Minji Lee] NICE Credit Rating announced on the 7th that it has upgraded SK Broadband's long-term credit rating from AA- to AA and assigned a stable outlook. The upgrade factors included the expected enhancement of competitive position and expansion of profit generation scale in the Euro broadcasting market due to the absorption merger with T-Broad, as well as the company's excellent financial structure.

Last month, the competitive landscape in the Euro broadcasting market significantly changed as SK Broadband merged with T-Broad. As of the end of last year, KT secured 10.93 million subscribers, maintaining its market-leading position with a 31.6% market share, while the subscriber bases of the second and third largest companies, including SK Broadband and LG Uplus, expanded, narrowing the market share gap with KT.

As of the end of last year, SK Broadband had 5.19 million IPTV subscribers, and after the merger, the combined entity's subscriber base expanded to 8.21 million.

Choi Jung-gi, Head of Corporate Evaluation Team 1 at the Corporate Evaluation Headquarters, said, “Through securing economies of scale from the expanded subscriber base, the company will be able to strengthen its bargaining power with domestic and international content providers.” He added, “Based on business linkage with the parent company SK Telecom, the company has secured potential customers for bundled sales of mobile communication, internet, and TV services, which is expected to generate mid- to long-term synergy effects.”

The company is expected to see significant improvement in overall financial stability indicators following the absorption merger with T-Broad. As of the end of last year, the combined debt ratio was 120%, and the dependence on borrowings was 38%.

Choi Jung-gi explained, “Although the average annual investment scale of the merged entity is expected to expand to around 859.9 billion KRW due to increased network investments driven by IPTV subscriber and corporate customer growth, considering the improved profit-generating capacity of the merged entity, it should be able to respond stably based on self-generated EBITA.” He added, “The possibility of financial support from SK Telecom is also a positive factor.”

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