HCN Embracing 'Satellite': KT Skylife's Winning Move

Selected as Preferred Bidder for Sale of Hyundai HCN
First M&A in 18 Years
Preparing New Converged Products Combining Wired and Wireless Networks
Market Share Reaches 35.47% Including KT IPTV Subscribers

[Asia Economy Reporter Koo Chae-eun] KT Skylife has embarked on its first merger and acquisition (M&A) in 18 years since its launch in 2002. The company aims to transform into a comprehensive paid broadcasting platform operator encompassing both satellite and paid broadcasting by acquiring Hyundai HCN. This M&A is immediately expected to enable various innovations by combining satellite and cable TV, based on the market-leading position resulting from the merger of Skylife (3.21 million subscribers) and Hyundai HCN (1.32 million subscribers). KT Skylife stated, "As the only satellite broadcaster in Korea, we bear a heavy responsibility in terms of broadcasting and M&A," adding, "We will work closely with the government and prepare thoroughly with our best efforts."

Declaration of Challenge with First M&A in 18 Years

According to industry sources on the 28th, KT Skylife, selected as the preferred bidder for the sale of Hyundai HCN, is expected to focus on creating converged services. Based on absorbing Hyundai HCN subscribers, the company plans to launch new bundled products that cross platforms between satellite and cable TV. Kim Cheol-soo, CEO of KT Skylife, said, "We aim to maximize synergy through the convergence of wired and wireless networks by launching new broadcasting products to expand consumer choices." Specifically, customized new products are expected, such as providing satellite broadcasting to subscribers in mountainous and remote areas, and cable TV to users seeking low-cost options. Synergy creation is also anticipated through KT’s 5G and its leading wired high-speed internet products. KT Skylife, with experience operating channels like SkyTV, is expected to share production know-how with HCN and expand sales of practical mid-to-low priced products.

Notably, Hyundai HCN holds business rights (SO, 8 locations) centered in major cities such as Gangnam and Seocho districts, where subscriber average revenue per user (ARPU) is high, as well as in Busan and Daegu. Absorbing these valuable businesses and launching bundled products could greatly enhance Skylife’s service value. Professor Choi Sung-jin of Seoul National University of Science and Technology said, "Since it is difficult for Skylife to expand subscribers due to the nature of its service, M&A was necessary for survival," adding, "This M&A will enable development services linked with wired networks."

According to the Ministry of Science and ICT, as of the second half of last year, KT Skylife had 3.21 million subscribers, accounting for 9.56% of the total paid broadcasting market share. Hyundai HCN had 1.32 million subscribers, representing a 3.95% market share. Combined, the two companies would have 4.53 million subscribers and a 13.51% market share. Adding KT IPTV subscribers (7.37 million) brings the total to 35.47%, securing the 'economies of scale' as the number one player in the paid broadcasting market. This is more than 10 percentage points ahead compared to LG Uplus affiliates and SK Telecom affiliates, which hold around 24% market share.

Intense Follow-up M&A Expected

The remaining step for KT Skylife is government approval. KT Skylife plans to first acquire Hyundai HCN shares and proceed with the merger later. A telecommunications industry official said, "Since the government approval process involves gathering opinions from a wide range of stakeholders, resolving public interest issues will be a key task for Skylife." With Hyundai HCN finding a new owner, the sale of other cable TV companies such as D’Live and CMB is also expected to accelerate. As of the second half of 2019, D’Live had 2 million subscribers, accounting for 5.98% of the paid broadcasting market share. CMB had 1.54 million subscribers, representing 4.58% market share. SK Telecom and LG Uplus may pursue additional M&As to counter KT’s dominance. Hyundai Department Store Group, having chosen a competitive bidding process for Hyundai HCN’s sale and achieved success, is likely to see D’Live and CMB follow a similar competitive bidding approach.

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