[번역]Local mobile service providers explore digital content business

The country`s mobile service providers are making inroads into the digital content industry.

Experts say that competition between Korea`s two major mobile service providers, KT and SK Telecom, will get fiercer and convergence between telecommunication and broadcasting services is soon to come.

KT Corp., Korea`s largest fixed-line telephone and high-speed Internet operator, announced yesterday that it has acquired 51 percent of Sidus FNH, the country`s biggest filmmaker valued at 28 billion won.

KT`s newly appointed CEO Nam Joong-soo yesterday said that KT will invest 28 billion won for the stock purchase.

"Contents, handsets and network will be converged, putting focus on customers," Nam said in his first meeting with reporters after replacing Lee Yong Kyung as chief executive last month.

He also said that the company will invest a total of 10.4 trillion won ($ 10.1 billion) by 2010. Among them, 7.8 trillion won will be put into strengthening the nation`s telecommunications infrastructure and 2.6 trillion won into establishing bases for new growth engines.

KT is expected to transform itself into a multi-media industry group, tapping into the mobile communication channel of its affiliate companies KT Freetel Co., Korea`s second-largest mobile phone operator, and KTH, better known as its service name Paran (www.paran.com).

KT is now at the risk of losing its fixed-line customers to mobile phone operators and has the challenge of dealing with intensifying competition in the slowing high-speed Internet market.

KTF invested 8 billion won into a 30 billion won`s worth of movie fund established by Show Box, Korea`s second-largest movie distributor, last June. KT is currently negotiating with Walt Disney on digital content supply since July.

Other than the movie industry, KT`s business scope will be gradually expanded into other areas such as games, music, and e-learning.

SK Telecom Co., the country`s largest mobile operator, is also advancing into the digital content market by stepping up its aggressive merges and acquisitions with entertainment and broadcasting companies.

SK Telecom invested 14.4 billion won into IHQ, Korea`s largest entertainment company, last February. It also took over YBM Seoul, Korea`s largest music record company, last May.

The company established 29.7 billion won`s worth of music fund and 20 billion won`s worth of movie fund. It is also considering to take over YTN Star, an affiliate of the broadcaster YTN.

(siyoungh@heraldm.com)

By Hwang Si-young