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| CEO Ku Hyeon-mo speaks about the company's strategy regarding media content during a press conference at KT's headquarters in central Seoul, March 23. Courtesy of KT |
By Kim Bo-eun
Korea's antitrust watchdog on Tuesday granted conditional approval for KT Skylife's acquisition of local cable TV operator Hyundai HCN.
The two entities signed a deal last October, under which the KT affiliate acquires 100 percent of the Hyundai unit's shares. The Korea Fair Trade Commission (KFTC) said that its conditional approval is based on the condition that the merged entity ensures the stability of fair market competition.
The body said that it outlined seven conditions, given the fact that the acquisition raised the possibility of KT having a monopoly in the paid digital broadcasting services market, as the integration removes Hyundai HCN's former prime competitor ― and therefore competition ― that prevented a raise in cable TV fees. Prior to the acquisition, KT had been Hyundai HCN's greatest competitor in the market.
The conditions include a ban on raising cable TV fees beyond the inflation rate, changing channels without collecting consumer opinions and forcing consumers to sign up for pricier plans. The watchdog added the KT affiliate needed to follow through with these measures by the end of 2024.
The KFTC said that KT Skylife would be able to request for these conditions to be alleviated after a year following the acquisition in November 2020. In July, the entity acquiring Hyundai HCN switched to KT Studio Genie, a newly launched entity of KT Group focusing on media production.
The KFTC determined that the acquisition resulted in the integration of businesses in 10 markets, which included digital broadcasting, high speed internet and home shopping.
KT's acquisition of Hyundai HCN is in line with its strategy to strengthen its media-centric businesses to find a new growth engine. KT launched KT Studio Genie in January, as an entity in charge of content production. The new entity oversees KT's business in IPTV, satellite broadcasting and over-the-top (OTT) media services.
KT's focus on media content is part of the country's dominant fixed-line operator's plan to switch into a digitally-driven platform company amid the saturated market here. Media businesses were major drivers of KT's earnings last year. KT has over 40 affiliates in a diverse range of sectors, including broadcasting, online services, finance, security and real estate development.
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