KOREA: Hanaro to Venture Into Broadcasting

Hanaro Telecom, Korea's second-largest broadband carrier, is seeking to find its next-generation growth engine in Internet protocol (IP) broadcasting, according to its president

The Korea Times
Tuesday, September 7, 2004

By Kim Tae-gyu

Hanaro Telecom, Korea's second-largest broadband carrier, is seeking to find its next-generation growth engine in Internet protocol (IP) broadcasting, according to its president.

Yoon Chang-bun, who took the reins of the outfit midway through last year, Tuesday made the comment at the ITU Telecom Asia 2004 held at the BEXCO here.

"Our ultimate goal is to venture into the IP broadcasting industry, and other businesses where we are looking to extend our reach are all oriented to the services," the 50-year-old CEO said.

IP broadcasting, also known as broadband broadcasting, refers to packet-based real-time broadcasting on the Internet.

The new-concept service is touted as a next-generation standard as it provides a completely new range of possibilities for end-users.

Unlike traditional broadcasting, IP TVs have no channel limitations and enjoy global coverage, while satellite and terrestrial TV channels can also be received by encoding them into the IP network.

Yoon said Hanaro's recent push to obtain a license for WiBro is also linked to IP broadcasting.

"WiBro services combined with IP broadcasting will cater to the growing need for mobility-specific broadcasting. Eventually, I believe this package of services will outperform digital multimedia broadcasting," the researcher-turned chief executive said.

WiBro, formerly known as 2.3 GHz portable Internet, enables people to access the Internet on the move at the average speed of 1 Mbps at an affordable price.

The government plans to issue two or three WiBro licenses with the commercial launch of the homegrown services slated for 2006. Hanaro is rumored to be teaming up with mobile leader SK Telecom in a bid to obtain one of the much-sought tickets.

"We are in talks with various companies to hook up for the licenses and if SK Telecom doesn't offer favorable conditions, we will not forge a consortium with it," Yoon said.

Asked about Hanaro's plan for Thrunet, the nation's third-largest high-speed Internet operator, Yoon said Hanaro would make all efforts to scoop up the troubled firm.

"We have enough to take over Thrunet based on our improved cash flow. We can make 800 billion won to 900 billion won right now," Yoon said.

Thrunet has been under the control of the court since late last year. Hanaro and Dacom have been competing with each other to gain control of the firm, which has 1.28 million subscribers for an 11-percent market share.

Thrunet's creditors, led by the state-run Korea Development Bank, plan to sell it off this year after the first tender failed last year due to low-priced bids from Hanaro and Dacom.

Regarding sales prospects for this year, Yoon said his firm would achieve its goal by expanding its business horizons to long-distance and overseas calls as well as by enlarging its inner-city call market share.

"Our bottom line will deteriorate somewhat in the third quarter because of increasing marketing costs. But in the final quarter, we will be able to see some handsome numbers," Yoon said.

The Kosdaq-listed firm netted 9.8 billion won in profit on 712 billion won in revenue during the first half of this year and aims at moving into the black for all of 2004 with 1.5 trillion won in turnover.

Date Posted: 9/7/2004