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KT plans to acquire D'Live

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By Kim Hyun-bin

KT has established a taskforce to officially resume failed efforts to take over local TV operator D'Live, as competitors SK Telecom and LG Uplus have been increasing their market share in the pay TV sector through mergers and acquisitions (M&A).

"The newly appointed KT President Koo Hyun-mo has decided to acquire the third ranking local TV operator D'Live and has established a taskforce to speed up the acquisition," a KT official told The Korea Times, Wednesday. "KT plans to acquire D'Live to bulk up the corporate's position in the pay-TV segment."

Koo Hyun-mo, newly appointed KT CEO
Koo Hyun-mo, newly appointed KT CEO
Regarding the possibility, KT spokesman Lee In-won said it has no plans to pursue the acquisition deal.

No legal hurdles are expected to delay the possible deal.

"Government regulations that prohibit TV operators from obtaining over a third of the market have expired and there are no legal risks if KT chooses to acquire local TV operators," an official at the Ministry of Science and ICT said.

Since early last year, KT the country's largest pay-per-view TV operator, has been showing interest in acquiring D'Live as its competitors have been eating into its market share through M&As.

According to data released by the Korea Communications Commission (KCC), KT's market share in the pay TV sector accounted for 31.1 percent in the latter half of 2019.

SKT acquired T Broadband and LG Uplus bought CJ HelloVision to increase their market share to 23.9 percent and 24.5 percent respectively in the same period. Regarding SK Telecom's acquisition of T Broadband, the science ministry gave a green light on condition that the merged entities complied with fair business practices and kept employment stable.

If KT is successful in acquiring D'Live, the company is expected to obtain 37.39 percent of the pay TV market.

KT initially announced it would acquire D'Live last year, but was cautious over getting more than a 33 percent combined market share that would breach the government regulation established to improve market competition in 2015. However, the law had expired in 2018.

While the government has adopted strict regulations in the TV market in the past, there is a growing consensus among lawmakers to ease restrictions due to fierce competition among global streaming services, such as YouTube and Netflix.

In January 2019, the Ministry of Science and ICT told the National assembly that the 33 percent market share limit was no longer necessary in the pay TV sector.

A vote to re-impose the regulation has been pending at the Assembly.

If lawmakers vote to reintroduce the regulation after the acquisition, KT will be forced to sell the local TV operator so that its market share meets the restriction.

KT is under pressure as its competitors' could conduct additional M&As to even further close the gap in the market.

Officials knowledgeable in the matter said KT, which only leads in the pay TV sector, will not be able to abandon its efforts to acquire D'Live as its competitors continue to increase their presence in the market.

In February, LG Uplus acquired leading cable TV operator CJ Hello becoming the nation's second-largest pay TV operator, while a week later SKT broadband subsidiary, SK Broadband Inc., announced its merger with T-broad expanding the company's media business.


Kim Hyun-bin hyunbin@koreatimes.co.kr


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