Domestic telecommunication companies
The telecommunication market for 2007 is expected to meet with fiercer competition more than ever before. It is because both wire and wireless service markets are completely saturated. So the domestic telecommunication companies have to make inroads into overseas markets in order to expand their market. Moreover, as the new services such as an Internet Protocol Television (IPTV) and WiBro (portable Internet) have been launched on a full-scale basis, they will bring sweeping changes on the future of major domestic telecommunication companies. Now let's see their ambitious business plans and top priorities for 2007.
SK Telecom
In an effort to go ahead in the convergent and ubiquitous business environment, SK Telecom is trying to make itself felt in the global market by expanding businesses in the USA, China, and Vietnam, taking advantage of its strong foothold at home market. Last year the company strengthened its business operations in the USA and Vietnam, continuously stepping up the pace in the global market in 2007. Recently in a talk with reporters, president Kim said: "The risk-taking can sometimes lead to a failure, but without taking a risk, we cannot succeed in business. So SK Telecom is determined to launch into Chinese market as a breakthrough of domestic IT industry." Meanwhile, in a special live program of Chinese CCTV on the occasion of the fifth anniversary of Chinese entry into WTO, president Kim said proudly: "SK Telecom has a worldclass technology in the mobile communication and convergence service. We are ready to play a leading role in the global telecommunication market in cooperation with Chinese partners."
KT
Due to the prolonged delay of IPTVrelated law, KT is meeting with difficulty in launching IPTV services, which is its next generation core growth engine. The IPTV-related law is scheduled to be dealt with the establishment of the Broadcasting and Communication Commission, which is still causing controversy among the political circles. In spite of the unclear situation, KT plans to activate IPTV service in 2007, investing 140 billion Korean won (US$150 million) in it, and putting more emphasis on IPTV service than portable Internet WiBro service. Recently president Nam said in a gathering with reporters: "As always, KT's unchanging policy direction is customer satisfaction. We will make every effort to aim our management infrastructure at customer satisfaction."
KTF
Although it has not yet clearly revealed its business plan for 2007, KTF is sure to put a top priority on the High Speed Downlink Packet Access (HSDPA), which is a 3.5 generation mobile communication service, a packet-based data service in the W-CDMA standard. To go ahead of its rival SK Telecom, it plans to build a nationwide network of HSDPA by the end of March 2007. Along with the launch of the Single Band Single Mode (SBSM), a HSDPA phone, scheduled for February in 2007, the company is putting a top priority on the HSDPA, changing its brand name, and solidifying its number one position in the field. In addition to HSDPA, the convergence service, which is sure to be a hot issue for 2007 in the telecommunication market, is likely to bring a favorable effect on KTF. The security analysts forecast that KTF will be the first to profit from the new convergence service, taking a leading role in this field.
LG Telecom
Last year LG Telecom introduced a low phone rate system, the Kiboon Zone, as well as an air mileage reward, which grants up to 17 mile per 1,000 Korean won (about US$1.07) of call rate, causing a sensation in the industry. The company is holding the strategy to play a leading role in the call rate by introducing a differentiated rate system. Stressing the importance of customer satisfaction, president Jung said: "In the customer service, in 2007 LG Telecom will go ahead of SK Telecom and KTF. We expect that in 2007 a lot of new services such as WiBro and HSDPA and new convergence services will be launched in the market, thus bringing sweeping changes in the already saturated market. Amid this rapidly changing environment, we will continue to create a customer value on a ongoing basis."
Hanaro Telecom
Hanaro Telecom will make all-out efforts to achieve its three major targets for 2007 Triple Play Service (TPS), 100Mclass superspeed Internet network and 1 million subscribers of Hana TV, Park Byung-moo, CEO of the company, said. Under the situation that the government pushes for easing of regulations on combined products of communication and broadcasting providers, Hanaro Telecom plans to bolster its status as a leader in the IT industry through introduction of TPS, which combined superspeed Internet, telephone and TV into one, he said.
"Based on merits of TPS product, including inexpensive fees and convenience, we plan to attract more new subscribers and encourage existing customers to buy additional goods, maximizing our company's profitability," said Park. Firstly, we will strengthen marketing activities from early 2007 after making a provision about use of TPS with which customers can easily feel the product's fare discount service compared with other products, including KT, he said.
Along with this, Hanaro Telecom will actively push ahead with establishing 100Mbps superspeed Internet network in 2007 to offer new communication and broadcasting convergence services, including IPTV.
"To provide better services than our competitors, we will invest a total of 120 billion won (US$120 million) to upgrade existing superspeed Internet network to 100M-class one in 2007," he said. In particular, Hanaro Telecom plans to pour a total of 50 billion won to upgrade HFC network to 100M-class one by 2007. At the same time, Hanaro Telecom aims at becoming a comprehensive multimedia enterprise by preoccupying the TV portal market.
"Related to this, we plan to secure 1 million subscribers to Hana TV in 2007 and achieve sales of 70-80 billion won," said Park.
It hopes to build a stable business foundation for Hana TV, which commenced its commercial service in July in 2006 and continuously take the initiative in the communication & broadcasting convergence market, including IPTV.
In 2007, Hanaro Telecom will supply set-top boxes containing digital tuner to help customers enjoy high-quality broadcasting, while offering various services, including shopping, network game and "noraebang," a singing room furnished with a karaoke, services.
"To satisfy various needs by Hana TV customers, we will also conclude contracts with major Hollywood movie producers and famous domestic and foreign contents providers to continuously update best contents," said Park.
Through activation of TPS product, expansion of the number of subscribers to Hana TV and IPTV service, we aim at achieving 1.5 million subscribers and 200 billion won of sales in 2008, he said. Meanwhile, Hanaro Telecom placed its focus on the expansion of the service area of its main product 100M-class optic LAN business, speed upgrade for existing customers and introduction of various new products to the market in 2006.
Thanks to such strenuous efforts, Hanaro Telecom expanded the 100M-class optic LAN service area to 3.8 million households, which are equivalent to twothirds of the company's apartment service region, while securing 800,000 in the accumulated number of subscribers.
Meanwhile, the number of subscribers to Hanaro Telecom city telephone increased by 60,000 just in the third quarter of 2006, showing favorable business performance. Hana TV, which started its commercial service at the end of July in 2006, is receiving favorable response from customers with the number of subscribers reaching about 150,000 as of the mid-December.
These days, more than 3,000 customers are applying for Hana TV service every day, showing that Hana TV has succeeded in securing its position as an attractive communication & broadcasting service model. Boosted by such favorable business performance, the stock price of Hanaro Telecom surpassed the 8,000 won mark per stock at the end of November in 2006 for the first time since it conducted a capital reduction early in the year.
