Investment in WiBro and IPTV below promised levels

According to a statement filed with the South Korean National Assembly Cultural and Telecommunications Committee investment in WiBro-related infrastructure remains lower than initial indications from operators, the Korea Times reports. KT Corp is understood to have invested KRW730 billion (USD623 million) between 2006 and 2008 on WiBro networks, some KRW60 billion less than its original KRW796 billion investment projection. Additionally, the telco has thus far completed the deployment of its wireless broadband infrastructure in just 28 cities, despite having previously guaranteed to increase this number to 84 by the end of 2008. Similarly SK Telecom (SKT) invested KRW621.3 billion over the two-year period to end-2008, having earlier pledged to spend KRW664.4 billion. On the back of the revelations the regulator, the Korean Communications Commission, is facing pressure to back down from its ‘nationalism-backed’ pro-wireless broadband policy, with officials from mobile operators arguing that market conditions should decide the level of investment in varying technologies. Even still, the watchdog has indicated that it is still mulling its options regarding encouraging WiBro development, with a KCC spokesman saying of the recent revelation; ‘The KCC is considering the possibility of imposing a penalty on telecom carriers over the failure of the investment pledge in WiBro-related businesses. But some technical matters still remain.’

Expenditure on IPTV services has also reportedly missed government-led targets, with the combined investment by all three of the nation’s largest IPTV operators – KT, SKT and LG Dacom – totalling just KRW283 billion in 2006-2008, less than a third of the promised KRW853 billion. Of the money spent, LG Dacom led the way, being responsible for 42% of the total, with SKT and KT spending 37% and 24% respectively.