Agreement on SKB+T-Broad Merger...Completion of Pay TV's Top 3

KCC Grants 14 Conditions and 3 Recommendations on 20th
Pre-Approval for SK Broadband and T-Broad Merger
Final Approval Expected After Transfer to Ministry of Science and ICT
Telecom Embracing Media Completes Three-Strong Pay TV Market Structure

[Asia Economy Reporter Koo Chae-eun] The Korea Communications Commission (KCC) has conditionally approved SK Broadband's acquisition and merger of T-Broad. As a result, the paid broadcasting market has been completed into a three-power structure centered on IPTV, consisting of KT·KT Skylife (market share 31.31%), LG Uplus·LG HelloVision (24.72%), and SK Telecom (24.03%).

On the 20th, the KCC held a plenary meeting and gave prior consent to SK Telecom, Taekwang Industrial, and others who applied for approval of the acquisition and merger of SK Broadband and T-Broad, approval of stock acquisition, approval of merger changes, and approval of the largest shareholder change. The KCC presented 14 conditions including measures to secure public responsibility and a coverage expansion plan for viewers in rural and fishing villages, as well as three recommendations to ensure the public nature of broadcasting.

The specific conditions attached to the merger include ▲prohibition of regional channel expansion by region, ▲submission of evidence reflecting PP (program provider) opinions when establishing PP evaluation criteria, and ▲disclosure of the ratio of PP program usage fees to subscription revenue.

Additionally, to protect and expand viewer rights, a coverage expansion plan to improve the convenience of viewers in rural and fishing areas must be submitted, and viewer committees must be operated by service type. To induce effective content investment, the content investment plan submission must distinguish between investment targets and investment methods. After the merger, plans for personnel reallocation and wage adjustment, as well as the status of maintaining non-regular employment, must be submitted, and when reviewing follow-up measures after the termination of contracts with partner companies, the opinions of partner company workers must be heard.

Recommendations were also presented. The merged corporation should appoint broadcasting experts as outside directors for a certain period to ensure that the public nature of broadcasting is not impaired. Through the establishment of a cooperative system among local broadcasting, local governments, and viewer media centers, support for the production of community-based and viewer-participation programs and opening of facilities should be enabled. A KCC official said, "Through the addition of conditions for prior consent this time, it is expected that the convergence between broadcasting operators in response to the rapid changes in the media environment will not only strengthen competitiveness but also raise the level of regionality, public nature, and fulfillment of public responsibility of the merged corporation to a higher level."