Skylife Embracing Hyundai HCN... KT Group Emerges as Overwhelming No.1 (Comprehensive)

KT Skylife Selected as Preferred Negotiation Partner
Prime Asset HCN to Join KT Skylife
National Assembly Demands 'Public Interest', Government M&A Approval Remains a Challenge

[Asia Economy Reporter Koo Chae-eun] KT Skylife has emerged as the 'absolute powerhouse' in the paid broadcasting market of the KT Group by acquiring the cable TV company 'prime asset' Hyundai HCN. With Hyundai HCN joining as a new member, KT-affiliated paid broadcasting market share will reach 35.47%. This creates a gap of more than 10 percentage points compared to the second place LG Uplus·HelloVision (24.91%) and third place SK Telecom·T-Broad (24.17%).

'Prime' Cable HCN Joins KT Skylife

On the 27th, Hyundai Department Store Group announced that KT Skylife was selected as the preferred bidder for the sale. KT Skylife, selected as the preferred bidder, will acquire Hyundai HCN’s shares and management rights after due diligence and signing the final contract. The acquisition price is estimated to be between 500 billion and 600 billion KRW. As of last year, Hyundai HCN had 1,328,455 subscribers, and the acquisition price appears to have been determined at around 390,000 to 400,000 KRW per subscriber. The final price will be decided through further negotiations. Typically, once a preferred bidder is selected, exclusive negotiation rights are granted until due diligence and final sale, so barring any major surprises, KT Skylife is expected to be the final acquirer.

KT Skylife plans to use Hyundai HCN as a stepping stone to expand its subscriber base in the paid broadcasting market. Last year, KT Skylife was unable to participate in cable broadcasting acquisition bids due to public interest issues, including combined regulation. However, with this acquisition, it has secured a firm leading position. Particularly significant is the acquisition of Hyundai HCN, the most sought-after asset in the paid broadcasting industry, which holds the 'prime' areas of Seocho and Gangnam. This successful acquisition of a cable company, a long-cherished goal for KT Skylife, is expected to serve as a new breakthrough in the satellite broadcasting market.

National Assembly's 'Public Interest' Demands and Government M&A Approval Remain Obstacles

However, there are still challenges to overcome before becoming the new owner of Hyundai HCN, including government review and the National Assembly’s demands for public interest. Although the government is simplifying the telecommunications and broadcasting M&A process with a principle of swift resolution, the M&A approval process requires extensive stakeholder opinion gathering, and the satellite broadcasting license renewal issue, which ends this year, remains unresolved. The National Assembly is also a hurdle. On the 8th, KT Skylife held a meeting with the Ministry of Science and ICT regarding measures to strengthen public interest, following demands from the National Assembly. The 'strengthening of the public duties of satellites' demanded by the 20th National Assembly may resurface even after the M&A review.

Professor Choi Sung-jin of Seoul National University of Science and Technology stated, "Through this acquisition, competition in the market with nearly equal shares among the three major telecommunications companies could lead to service development competition that benefits consumer welfare." He added, "If there are concerns about KT-affiliated market share concentration in the future, measures such as preventing cable subscribers from switching to wired subscribers over a period of three to five years could be implemented as a regulatory safeguard. The market situation has changed significantly since last year (during the 20th National Assembly)."

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