KT, LGT, SK Broadband Join '3D Frenzy'
The nation's major Internet protocol television (IPTV) players plan to ride on the current 3D boom by launching three dimensional-related services in the latter half of this year. The moves are expected to help the local 3D industry after South Korea's main terrestrial, cable and satellite channels finalized their plans to start 3D broadcasting services on a trial basis.
A senior official at the nation's top telecom regulator said that KT Corp., SK Broadband and LG Telecom were seriously reviewing the possibility to start their respective services in the second half of 2010.
"Besides the government-organized 3D trial services for broadcasting, the top 3 IPTV firms are preparing similar schemes," the official at the Korea Communications Commission (KCC) said. "We don't see any big technical problems such as traffic for the trials being pushed by the players. Video-On-Demand (VOD) will lead the initial move, while the launching of a 3D-only channel is likely when content is available," he added.
A KT spokesman said the company plans to launch a 3D broadcasting service capitalizing on VOD applications within this year as a test. But he added related contents and the proliferation of 3D television sets would be the top considerations before further moves.
An LG Telecom spokesman said that it will start commercial 3D services this year.
"LG Telecom is moving to provide VOD applications in a specialized and separated 3D zone inside our IPTVs," he said, adding the telecom unit of LG Group is "very keen" to strengthen its 3D TV-related portfolio as a new revenue sources.
To answer worries over profits and sustainable growth in the business, the group's electronics unit, LG Electronics, is busy expanding its client base for 3D TVs in Europe, India and the United States and has upwardly adjusted its annual sales target of these products in the regions.
The other incumbent telecom carrier SK Broadband plans to introduce a set-top box embedded with chips that easily convert 2D content into 3D rather than starting a 3D service via its IPTV, company officials said. SK Broadband's plan came months after SK Telecom said it was planning to apply its real-time 3D technology to digital devices such as televisions and mobile phones in the first half of this year.
Last November, SK developed the technology that converts 2D content into 3D by forming a united front with chip manufacturer, ECT. The new technology is a big bet both for the television industry and the broadcasting segment looking for the next big thing, but the lack of content, high prices and the required use of glasses remain big hurdles.
Market watchers and analysts, however, say the situation is not "favorable" for IPTV players to make profits in the short term due to the lack of content, infrastructure and detailed strategies.
"KT, LG Telecom and SK Broadband are just aiming to secure their bottom lines at a time when cable and satellite channels are drying up the IPTV players' shares," an industry source said. "In terms of profitability, I can say no. KT and SK Broadband plan to double their investments in IPTV services this year. For me, it doesn't make any sense to boost the budgets for 3D. That's somewhat risky," the source said, adding more time will be needed.
KT and SK Broadband plan to spend more on marketing as they've been set the task of doubling their target number of IPTV subscribers this year from a year ago. KT expects sales from the IPTV business to hit 200 billion won this year, up from 99.4 billion won in 2009. The company has set an IPTV subscriber target of 2 million. SK Broadband aims to develop its IPTV subscriber base from 402,000 last year to 800,000 this year, officials say.
By Kim Yoo-chul, The Korea Times
