Tracing 50 Years of Korea's Electronics Industry Development
Tracing 50 Years of Korea's Electronics Industry Development
  • Kim Yea-rim
  • 승인 2010.09.24 10:00
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"The introduction of IPTV is essential not optional!" Suh Jongryeol, Executive Vice President of the Media Business Unit at KT stressed. What makes the move to IPTV so special that should be taken as an 'inevitable"and how will IPTV change the TV landscape Korea IT Times leaned about 'The emergence of IPTV in Korea and development direction' in a recent conversation with Mr. Suh.

Suh Jongryeol, Executive Vice President Media Business Unit at KT
"As the age of Media 2.0 and convergence enters, Korea was prepared for the induction of IPTV. A successful business model in web 2.0 flowed into TV from the open biz environment, and it leads that paradigm change into the Media 2.0 age", Mr. Suh explained.

With the development of technology, the fusion of broad media and communication brought the expansion of internet bandwidth, which facilitated the transmission of video and interactive content. Accordingly, operators began crafting a new business model that would embrace the content shift.

IPTV Service Progress

IPTV has been a long time in coming. Let's look back to the time when the installation and introduction plan of IPTV was first discussed by the Presidential Commission on Broadcasting and Communication Convergence in July 2006. At the same time Hanaro Telecom started to provide a service known as 'Hana TV', which was a 'pre-IPTV' service using Video on Demand (VoD) technology.

In July 2007, KT launched 'Mega TV' and in September of the same year LG responded with 'myLGTV'. In December 2007, the long awaited dream of the  'Internet multimedia broadcast law' was finally passed.

In September 2008, three telecom companies, Hanaro Telecom (now, SK Broadband), LG Telecom (now, LG U+) and KT enjoyed the honor of being selected as IPTV service providers. With in two months, KT began service commercialization for the first time. SK and LG followed with their offering in January 2009. IPTV subscribers surpassed the one million mark in October 2009. In April 2010, IPTV reached 2 million subscribers and the industry has high expectations for these numbers to continue to grow in the future.

Looking at the global trends of IPTV, PCCW now TV from Hong Kong was introduced IPTV in 2003. After 3 years, the American firm Verizon FiOS TV and FT Orange TV from France made IPTV available to it's customers and other companies around the world followed suit. The base of IPTV has broadened continuously ever since. Today, subscribers world wide total approximately 64.29 million, which demonstrates a rapid increase when compared to 11.09 million subscribers in 2007. This index shows that IPTV continues to have the potential to develop further in the future.

IPTV problems

After all, the strength of IPTV is that high-capacity content can be transmitted on the both sides, which means better quality of internet service is feasible. However, even though it has differentiated elements compared to previous VOD, Korea's IPTV faced some difficulties for the stable entry process.

Because IPTV technology requires a robust infrastructure, very costly investment had to be made and set-top boxes are still needed in some rural areas. Another negative factor was a delay in legalization ! These issues caused the implementation of IPTV up in Korea to be slower than antisipated. It took approximately three years for lawmakers to settle on regulations regarding IPTV after KT had announced the introduction of IPTV in 2004.

Another contributing hinderence was that there are two regulatory agencies, KCC and Ministry of Information and Communication, whose veiws were in sharp conflict with one another and neither agreed with the positions of players in the industry, exaserbating the delay. As a result, the service was actually started in November 2008.

If those problems weren't enough, due to inequity of regulation, fair competition was not acheived. Since laws relating to IPTV's are more restrictive than those in the general Broadcast Law, IPTV has faced some challenges which include accounting separation, share limit by the domains, providing essential equipment and various post-regulation rules that prohibit the direct channels.

Another barrier which IPTV is facing now is the limited amount of available content and the seeminly limitless demand.

Public Broadcasting Operators have implemented a substantial cost structure for retransmission of their content over IPTV, which has resulted in a significant financial burden to IPTV operators. Denial of providing higher channel rating content by MPPs (Multiple Program Provider) to the SO's (System Operator), seems to be the biggest obstacle to content promotion.

Unfortunately, as a result, there has been a slowdown phenomenon in growth in IPTV subscribers. There is no doubt that the 'program access rules' should make a shift in policy to give satisfactory results without delay.

Ripple Effects of IPTV

How does IPTV influence us " First of all, IPTV will change our life style and expand the options" said Mr. Suh. He continued by saying, "Let me put it this way, if the previous TV is Family TV, IPTV is your own TV. It provides 100% of digital broadcasting service. Not only can someone just watch TV, experiencing TV is possible with interactive services."

To take a lead in this change, KT plays a role as a tracker to support 'complete national digital conversion by the end of 2012', which is one of the main government policies.

Also, it is expected that IPTV operators will help to actively develop content for the industry. Suh explained that since the transmission infrastructure has grown, it will motivate the creation of content providers, so the content production and related services will be energized by enhanced interactivity content.

Through network investment, network upgrading and related service support will be served to facilitate growth, too. In addition, operators' continuous investment for QoS and security will advance the sophistication of the national IP network, high-speed internet and internet telephony by expanding the internet coverage and bandwidth.

KT's IPTV business is quite worthy of a second look. KT leads the current IPTV business in Korea by supporting about 1.25 million subscribers in August 16th 2010. They broadcast a total of 149 channels including 30 of audio channels. At the first half of 2010, KT provided 86,000 VoD, and holds a total of 85 flavors of the interactive services with additional 20 this year.

Especially, the Open IPTV platform KT supports is something you 'can't not miss'. Basically, everyone can broadcast and deliver quality contents via the facilities and infrastructure KT holds. It is an unquestionably effective way of activating content.

"The most imperative thing for the development of Korea's IPTV is to collect the subscribers as many as possible." Mr. Suh said. He also stressed by saying, "A TV should be the TV which provides social network instead of showing only some TV program. And the platform needs to advance to sell and buy the content."

Before long, the time will come, not only will we watch videos broadcast from TV, also information searches and video phone will be possible. Last but not least, Suh ended the interview with the comment: "Like the advent of color TV, the emergence of IPTV can not be stopped. This is a cultural trend which is not going to disappear."

 

 

Full Series Schedule

July 2009: an overview
August 2009: The electronics industry is born
September 2009: Electronics industry gains momentum
October 2009: Color TV production opens a new vista
November 2009: Radios, cassettesand electronic watches change lifestyle
December 2009: The personal computer arrives
January 2010: TDX1 introduced into the local network
February 2010: TFT LCD allows determination of film thickness
March 2010: CDMA comes into commercial use
April 2010: U-technologies (part 1)
June 2010: U-technologies (part 2)
July 2010 : WiMAX opens 

August 2010 : IT 839 Strategy Lays the Groundwork for ICT Market
September 2010 : Era of IPTV


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