Intense Second M&A Battle and Strategic Moves... Inside the Minds of the Three Telecom Giants

Paid Broadcasting M&A Second Round Opens
HCN, D'Live, CMB Sales Underway
Subscriber Rankings Shake Up Again
All Three Telecom Giants Strongly Motivated for Additional Deals
Telecom + Media Restructuring Accelerates

[Asia Economy Reporter Koo Chae-eun] As three major cable companies (D'Live, CMB, HCN) come onto the M&A market, the calculations of leading acquisition candidates SK Telecom, KT, and LG Uplus are becoming increasingly complex. With paid broadcasting market shares being close, acquiring even one of these three companies could significantly alter the rankings. Especially since all three telecom companies are seeking footholds outside traditional telecommunications through media content businesses, fierce strategic battles are expected in the 'Big Deal Round 2.'

Competitive Bidding to Curb Rivals... 'Battle for No.1' Intensifies

According to industry sources on the 10th, the current market shares of the three major cable companies up for sale are D'Live (5.98%), CMB (4.58%), and Hyundai HCN (3.9%), respectively. The telecom companies' market shares stand at KT affiliates 31.52%, LG Uplus 24.91%, and SK Telecom affiliates 24.17%, hovering around 25-30%, creating strong incentives for additional M&A.

In particular, this 'M&A Round 2' is expected to involve fierce 'bleeding competition,' including participating in preliminary bids as a strategy to curb rivals. Without competition, a rival could win the bid at a low price and maximize profits. A senior telecom industry official said, "Cable companies are opting for acquisition one after another to survive, but the eyeing game among buyers is intense and could lead to overheating," adding, "At this point, it will be difficult for the market to favor buyers."

All Three Telecoms Strongly Motivated for Additional Deals

Among the three telecom companies, SK Telecom, currently ranked third in the paid broadcasting market, is known to have a strong willingness to acquire more to climb the rankings. Although the gap with second-place LG Uplus is narrow at about 0.7%, SK Telecom, the wireless market leader, is highly motivated to escape the 'third place' position. It is likely to narrow the market share gap with LG Uplus affiliates and compete head-to-head with KT for the top spot in the media market through additional M&A. Especially, acquiring Hyundai HCN, considered a prime asset, would narrow the gap with the current market leader KT affiliates to 3%. The No.1 position would then be within reach.

KT, currently holding the No.1 market position, is also in a pressing situation. Last year, it was blocked from participating in cable broadcasting acquisitions due to combined regulation issues, significantly narrowing the gap with latecomers. In particular, KT would secure a solid lead in the paid broadcasting market by acquiring just one of the HCN, D'Live, or CMB assets. Although KT CEO Koo Hyun-mo has shown a conservative stance on paid broadcasting M&A, he is likely to enter the M&A battle to defend the No.1 position during his term.

LG Uplus Also Determined to Defend No.2... All Big 5 Cable Companies Opt for Sale

LG Uplus, which acquired the No.1 cable company HelloVision in last year's M&A market, is also keeping the door open for additional deals. If SK Telecom acquires Hyundai HCN, LG Uplus would fall back to 'third place' in the market. Although subscriber numbers have changed, considering the image associated with being third in the market, it is expected to pursue further acquisitions.

Meanwhile, according to the Ministry of Science and ICT, as of the second half of last year, the combined IPTV (Internet TV) paid broadcasting subscriber market share of the three telecom companies reached 50.1%, surpassing half the market for the first time. This year’s M&A, following last year's T-broad and LG Hello acquisitions, includes HCN, D'Live, and CMB being acquired by telecom capital, meaning all the cable TV 'Big 5' have chosen to be sold to IPTV platforms.

An industry insider said, "Due to subscriber saturation and lack of growth strategies among cable companies, the hegemony of paid broadcasting is completely shifting from cable to IPTV," adding, "To prevent redundant investments, the absorption of cable subscribers into IPTV is accelerating, and after this second round of M&A, the lifespan of cable TV as a platform will rapidly shorten."

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