Telecom 3 Giants Join Hyundai HCN Acquisition Battle... The Second Round of Pay-TV M&A Begins

[Asia Economy Reporter Seulgina Jo] The second round of restructuring in the domestic pay-TV market has officially begun as the three major mobile carriers have stepped up to acquire Hyundai HCN, the fifth-largest cable TV operator. The market rankings could shift again depending on who acquires Hyundai HCN, making the upcoming main bidding process highly anticipated.

According to industry sources on the 27th, Hyundai Department Store Group closed the preliminary bidding for the sale of Hyundai HCN the day before, with all three telecom companies?SK Telecom, KT, and LG Uplus?participating. Hyundai HCN, which had 1.34 million subscribers last year and held a 3.95% market share, is considered a valuable asset due to its subscriber base in the Gangnam area of Seoul, resulting in a high average revenue per user (ARPU).

However, considering that the three telecom companies have not shown aggressive moves in acquisition battles this year due to the impact of the COVID-19 pandemic, it is currently assessed that the competition is more about strategic positioning rather than an earnest acquisition attempt.

The domestic pay-TV market is currently reorganized into a three-strong telecom-led IPTV structure. KT and KT Skylife hold a combined market share of 31.52%, LG Uplus and LG HelloVision have 24.91%, and SK Broadband holds 24.17%. Hyundai HCN’s acquisition could change the rankings or narrow the gaps at any time.

An industry insider said, "So far, the interpretation is that this is a card that can be considered if conditions are met or a card to block competitors’ acquisitions," adding, "The atmosphere is cautious."

The key issue is the price. The market estimates an appropriate price range of 300 billion to 400 billion KRW, which falls short of Hyundai Department Store Group’s expectations. The three telecom companies will proceed to the main bidding after due diligence. Competition may intensify depending on detailed conditions such as price during this process. With additional cable TV assets like D’Live potentially coming onto the market, it is analyzed that the M&A battle among the three telecom companies over the pay-TV market could be further ignited.