Skylife Submits 'Measures to Strengthen Public Interest'

After Submitting 'Measures to Strengthen Publicness' in February Last Year
KT Skylife and Ministry of Science and ICT Hold First 'Meeting' on the 8th of This Month

[Asia Economy Reporter Koo Chae-eun] KT Skylife recently submitted materials related to measures to strengthen the public nature of satellite broadcasting to the National Assembly. It has been about 1 year and 5 months since the National Assembly put the brakes on KT Skylife's acquisition of D'Live last year and demanded 'measures to strengthen public nature.' However, some ruling party members view the management stabilization plan as insufficient, raising the possibility of additional material submissions.

According to materials exclusively obtained by this outlet on the 15th from the office of Rep. Byun Jae-il of the Democratic Party of Korea (Cheongju-si Cheongwon-gu), the Ministry of Science and ICT and KT Skylife held a meeting on the 8th regarding measures to strengthen public nature. This meeting was held following a request for material submission from Rep. Byun Jae-il's office on the 3rd of this month, after no additional actions had been taken since the submission of the 'public nature measures' to the National Assembly in February last year. According to the materials summarizing the results of the meeting on the 8th, KT explained the situation that forced them to pursue the acquisition of Hyundai HCN, reversing the stance of former KT Chairman Hwang Chang-gyu, who had said he would completely halt the cable TV acquisition merger.

(Source: Office of Assemblyman Byeon Jae-il, 'Performance of Strengthening Public Responsibilities of Satellite Broadcasting')

KT Skylife stated, "After halting the acquisition of D'Live, significant changes occurred in the pay-TV market, and the restructuring of the market made it difficult for satellite broadcasting to survive independently, putting the foundation for fulfilling public responsibilities at risk," adding, "We are considering acquiring Hyundai HCN as a measure to stably fulfill our public duties."

During the meeting, when the Ministry of Science and ICT was asked by the National Assembly about the management improvement plan for satellite broadcasting, it responded, "We will continuously monitor the implementation performance and status of the measures to strengthen public nature." Regarding the six items identified as measures to strengthen public nature, the ministry stated that there has been no progress since February last year on ▲restructuring satellite broadcasting ownership shares, ▲strengthening re-licensing and M&A reviews, and ▲strengthening bundled product reviews, marking them as 'not applicable.'

In the National Assembly, there are calls for further discussion on 'strengthening the public responsibilities of satellites,' which was the basis for opposing KT Skylife's acquisition of D'Live during the 20th National Assembly. This implies that the 'public nature strengthening' aspect could be a significant variable in KT Skylife's pursuit of acquiring Hyundai HCN. Rep. Byun Jae-il of the Democratic Party of Korea said in a phone interview with this outlet, "Strengthening the public responsibilities of satellite broadcasting is a part where the National Assembly, government, and operators have openly reached an agreement," adding, "Even if the M&A proceeds, we will continuously monitor to ensure that the government thoroughly reviews the satellite broadcasting's responsibilities related to strengthening public duties."

(Source: Office of Representative Byeon Jae-il, 'Performance in Strengthening the Public Responsibilities of Satellite Broadcasting')

Experts point out that while securing profitability and independent survival for KT Skylife is important, monitoring measures to guarantee the 'public nature' as a satellite broadcaster is also necessary. Kim Dong-jun, director of the Public Media Research Institute, said, "If KT Skylife acquires Hyundai HCN, there is concern about subscribers leaving KT in the future," adding, "Although it is not possible to force KT to sell its shares, it is important to resolve issues such as management autonomy and independence."

Professor Choi Sung-jin of Seoul National University of Science and Technology said, "The concept of public nature is vague and idealistic, but positioning to do other things for the survival of satellites can also be seen as public nature," adding, "If there are concerns about the concentration of KT affiliates' market share in the future, measures such as setting a period of 3 to 5 years to prevent cable subscribers from switching to wired subscribers should also be discussed."

Regarding this, a KT Skylife official said, "It is true that we held a meeting with the Ministry of Science and ICT on the 8th," adding, "We are aware of the demand to strengthen public nature, are considering various measures from different angles, and will continue discussions in the future."