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Viewing report
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Challenges for Korean IPTV Industry
ROA Holdings, May 2006, Pages: 89
Challenges for Korean IPTV Industry report by ROA Holdings analyzes and prospects the IPTV market in Korea. More specifically, the report covers the reasons for the IPTV service delay and estimates a possible market size after the service launch. In addition, it explores the status and the progress of carriers such as SKT, Hanaro Telecom and Powercomm in preparing IPTV service. Lastly, it prospects the possible effects that IPTV service brings to telecommunications and broadcasting industries. The development status of IPTV market in other countries is provided in the appendix.
Executive Summary
Fixed operators take the lead in preparing IPTV service in Korea like other countries, but due to unprepared institutional frameworks and controversy over fair regulations between cable TV operators and IPTV service providers, the commercial launch of the service has been delayed. Since Korean IPTV service is expected to be provided based on high-speed networks, 100Mbps FTTH, and the government-led BcN, the service is likely to have a strong market power in Korea. Telecommunication companies such as Korea Telecom (KT), Hanaro Telecom and Dacom are preparing IPTV service as a business model of BcN project and they already started a pilot service in the latter half of 2005.
KT (Korea Telecom) is the most active player pioneering the domestic IPTV market. KT is preparing IPTV service as a strategic application of its home network business, simply beyond providing broadcasting service. Prior to the launch of IPTV service, KT implements the following three IPTV strategies; HomeN service, TV portal and IP media.
Supposed that IPTV commercial launch begins in 2006 in Korea, it is projected that the number of subscribers would reach 570,000 in 2006 and increase up to about 3 million by 2012. In addition, sales would record 160 billion KRW in 2006 and increase to 770 billion KRW by 2012.
IPTV is expected to bring considerable effects on telecommunication and broadcasting industries. The biggest impact that IPTV brings would be a change in industrial structure. IPTV is likely to be transformed from non-real-time services such as information and VOD into two-way services through real-time transmission of broadcasting contents. Briefly, the boundary between telecommunications and broadcasting industries would be faded out by a converged platform called IPTV.
Fixed broadcasting/telecommunications convergence TV represented by IPTV and digital cable broadcasting, and mobile broadcasting/telecommunications convergence TV represented by Digital Multimedia Broadcasting (DMB) will lead the future broadcasting/telecommunications services in Korea.
Along with this, not only video services including VOD but also various home-networking services such as Home Automation and Home-security services are expected to be realized and widely spread through IPTV. As two-way feature, a major character of telecommunications service, is added to those services, various value-added services such as video phone, t-commerce, e-learning and customized TV portals would be developed.
Such development of various value-added services will lead to the expansion of home appliances market. In order for those services to get realized, IPTV set-top box connecting high-speed Internet with TV is necessary. If VoIP function is added, set-top box would be developed as TPS (Triple-Play Service) set-top box which provides telephone, high-speed Internet and broadcasting services at the same time.
Who should read this report?
This report targets broadcasting and telecommunications industries. Since the Korean IPTV service is expected to need FTTH-level Internet infrastructure and various contents, it would be a useful material to those who are interested in the Korean IPTV and contents markets.
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