IPTV To Make Its Debut Soon

Digital convergence, now in its infancy, has the potential to bring about revolutionary changes in the future.

Digital convergence, now in its infancy, has the potential to bring about revolutionary changes in the future. Digital convergence is most likely to bring about tremendous changes in the broadcasting and communications industries, which are showing signs of market saturation. In particular, public attention is paid to IPTV (Internet Protocol Television), currently a representative of digital convergence, scheduled to begin commercial service soon.
Three IPTV service providers -- KT, SK Broadband and LG Dacom -- are preparing to jump into the IPTV market, dubbed the "goose that lays the golden eggs."The following are excerpts of an interview with Seol Jeong-seon, assistant chairman of the Broadcasting and Communications Convergence Policy Office at the Korea Communications Commission (KCC), with NewsWorld. Seol touches on the prospects of digital convergence and other government policies.
Question: Will you tell our readers about the current status of the IPTV market and its prospects?
Answer: The telecommunications service market was projected to grow to 45.1 trillion won in 2007, representing 5.5-times the value of the broadcasting market, estimated at 8.11 trillion won for the same year. The broadcasting/communications convergence market is now still in its infancy, but has the potential to bring about revolutionary changes in the two industries in the future.
Broadcasting and communications service providers, facing such woes as market growth slowdown, cutthroat competition among broadcasting networks and a saturated pay broadcasting market, are turning to the exploration of new profit-making arenas other than the conventional business turf.
Communications service providers are poised to enter the broadcasting/communications convergence market for broadband convergence network (BcN) services and mobile broadcasting services following the development of technology. Broadcasting service providers are also striving to explore new profit sources by entering such communications markets as Internet and telephone services.
IPTV (Internet Protocol Television), one of the representative convergence services, will be put into service in late 2008. In the next five years, 4.5 trillion won in investments will be poured into the IPTV service market, 2.8 trillion won of which will be for infrastructure buildup, and sales are projected to increase to 750 billion won by 2013.
Q: What steps is the commission taking to create new growth engines and jobs through the advancement of the broadcasting and communications industries?
A: The IT sector has so far grown fast enough to contribute to the development of the national economy, but it is now saturated enough to show a slow down in growth.
The establishment of an agency in charge of a combination of broadcasting and communications is aimed at reigniting new growth engines by making the most of convergence momentum, thus creating quality jobs and contributing to the development of the national economy.
In particular, the broadcasting and communications industries have far-reaching spill-over effects on related front-end and back-end industries, including equipment, content and advertising as well as economic growth and job creation in which more than 80 percent of job openings in the industries are filled by well-educated manpower with junior college degrees or higher.
The KCC has already announced a plan calling for nourishing strategic services effective for boosting domestic demand and creating jobs, reforming restrictions on broadcasting services and invigorating investments into communication services with the goal of creating 291,000 jobs, particularly for youths, over the next five years.
We are striving to foster IPTV services and broadcasting contents as a new breed of strategic industries. The dispute surrounding the broadcasting vs. communications nature of IPTV services has put on hold the introduction of the new services for the past three years, but television-based Internet, IPTV, will be put into commercial service during October. It will induce investments into infrastructure buildup and the development of contents on top of the commercialization of IPTV services. KCC plans to provide support for the early stabilization of the IPTV market by pushing ahead with 11.7 billion won worth of projects to develop pilot services for the public sector during the period between 2008 and 2010. It plans to jumpstart growth momentum by providing support to help domestic companies enhance their competitive edge and step up self-sufficiency in the global broadcasting content market, which is showing signs of explosive growth in the wake of the emerging digital convergence.
It will induce investments and growth in the industries by revamping restrictions on owning and combining management of broadcasting and communications businesses. Specifically, large corporations will be allowed to enter the markets for terrestrial broadcasting program providers, while restrictions barring the management combination of system operators will be eased.
Digital broadcasting made its debut in 2001 to provide data and interactive broadcasting services, but the terrestrial broadcasting networks'digital broadcasting rate is still low.
We will encourage companies to boost facility investments by adopting such steps as allowing voice communications in the broadband mobile Internet service, WiBro, the number portability system for Internet telephone and revealing the results of quality evaluations to the public.
Digital convergence services, resulting from the implementation of these policies, are forecast to grow 6.8 percent and reach 21.4 trillion won in production in the next five years.
Q: Will you comment on trends of combining broadcasting and communications and their prospects?
A: Newspapers, publishing, broadcasting, cinema, fixed/mobile telecommunications and Internet, which were established and operated independently in the past, are now inclined toward combination into the multimedia market for providing interactive contents.
The reality is that on the basis of broadband Internet, the broadcasting sector can make inroads into the communications field, and vice versa.
Triple Play Service, including data, communications and media, will be further invigorated thanks to the BCN buildup and the widespread use of G-3.5 mobile handsets.
Q: Will you tell us about strategies to boost IPTV?
A: KCC plans to complete test operations and legal revamping so that commercial services of IPTV will be made available in October. We plan to approve a pricing system designed to allow for the development of diverse convergence products in a manner in which the users'burden is minimized and proper profits are distributed to program providers.
The commission has a plan to upgrade a fiber-optic cable network to cover 12 million users or 80 percent of the nation's total fixed line cable users by 2010. KT, an IPTV operator, will be encouraged to make facility investments to build up the Fiber-To-The-Home (FTTH) network nationwide by 2011.
As part of efforts to invigorate the content industry and diversify contents, KCC plans to consider easing restrictions banning conglomerates from owning and combining the management of program providers in order to boost investments from the private sector.
We plan to explore public and civic services including traffic information by investing a combined 11.7 billion won between 2008 and 2011, while cutting down on educational spending in the private sector by offering diverse and interactive educational contents connected with public and private education.
Q: Will you speak about the prospects of boosting investments in the communications services industry?
A: Communications providers, situated at the top of the value chain, are considered contributing to the growth of front-end and back-end industries and creating jobs. However, telecom companies need to introduce new services as their conventional service markets, including voice, are in their maturity. They are focusing on marketing activities to reap profits in the short term, but are reluctant to make forward-looking investments for the exploration of new markets.
The government plans to invigorate new service markets including WiBro and Internet telephone and induce investments by revealing the outcome of quality evaluations.
As a result, investments are projected to increase about 7 trillion won in 2007 to 9 trillion won in 2012, thus raising production-inducing effects from 16 trillion won to 18 trillion won, respectively.
Q: What steps is the government taking to provide support for the industries'overseas exploration?
A: The government plans to designate hub countries for overseas exploration on the basis of demand, growth potential and market access. It will establish strategies to enter the designated hub states by analyzing entry conditions and investment environment. A committee for supporting overseas exploration in the broadcasting and communication industries will be formed among government, related organizations and businesses to share and sound out success stories on overseas exploration and grievances.
Overseas road shows will be held to explore the foreign DMB and WiBro markets and promote overseas marketing activities. Test-operations of DMB will be conducted in one to three developing countries every year. A broadcasting and communications ministerial conference is to be held in Seoul in October with such countries as Russia and those in Southeast Asia and Latin America -- Korea's target countries for penetrating the WiBro and DMB markets -- expected to participate in sharing polices and building up infrastructure for overseas market exploration.
The government plans to actively push ahead with projects to jointly produce broadcasting content with a pact on co-production with the Association of Southeast Asian Nations (ASEAN) and the European Free Trade Association (EFTA) by providing financial support for the joint production of programs.
Q: Will you tell us about your commission's plan to proliferate a "go green"culture in the broadcasting and communications fields?
A: Digital convergence and higher capacity are forecast to leave electricity consumption on the rise. Internet digital centers'(IDC) electricity consumption is on the constant rise due to a rise in the number of servers and data storage capacity.
An expansion of broadcasting and communications infrastructure and services
has resulted in curtailing people's physical movements, thus contributing to promoting energy conservation. Statistics released by a European telecom operators'association showed that teleconferencing, working from home and other broadcasting and communications services cut down on carbon dioxide discharges by a significant amount.
In an effort to make the IT sector greener, the government plans to expand high-speed infrastructure and realize the early introduction of new broadcasting and communications services. We plan to provide a foundation for building up intelligent transportation systems and geographical information systems and a ubiquitous-City while creating a ubiquitous environment for such u-Life services as u-Home, u-Learning and u-Work.
The government seeks to provide support for building up low-electricity IDCs by capitalizing on virtualization, low-electricity CPUs and optimized software while stepping up efforts to make the IT sector greener by raising the retrieval rate of used cellular phones and reusing resources. nw

Seol Jeong-seon, assistant chairman of the Broadcasting and Communications Convergence Policy Office at the Korea Communications Commission (KCC)