'LG Uplus decides to acquire CJ Hello' By Jun Ji-hye SK Telecom, KT and LG Uplus are in heated competition to acquire cable television operators to find future growth engines in media and content amid saturation of the telecom sector According to industry sources, Sunday, LG Uplus has decided to take over CJ Hello, the nation's largest cable television operator, to expand its share in the subscription TV market. SK Telecom and KT are moving to acquire T-Broad and D'live, respectively, adding fuel to the Mamp;A competition aimed at the convergence of broadcasting and telecommunications.
Subscription-based TV refers to services provided by cable, satellite TV and IPTV operators. LG Uplus' takeover plan will be finalized during the firm's board of directors meeting this week at the earliest, sources said.
But a LG Uplus official said: 'There is nothing to confirm yet.' The moves come as both mobile carriers and cable TV operators seek Mamp;A deals.
Mobile carriers are desperate to expand their presence in the rapidly growing media market to make up for the declining profitability of their wireless services business, while cable TV operators have recently lost customers to video streaming service providers that operate over-the-top (OTT) platforms, such as Netflix, which entered the Korean market in 2016. OTT services deliver films or TV dramas over the internet.
From the point of view of cable TV operators, it is more advantageous to be bought before their value falls further Eyes are on whether LG Uplus' attempt to take over CJ Hello can pass the Fair Trade Commission's (FTC) examination. In 2015, the FTC did not approve SK Telecom's bid to acquire CJ Hello on concerns over a monopoly and oligopoly in the subscription TV market.
Market observers say LG Uplus is likely to get approval from the FTC this time, citing the corporate watchdog's changing attitude to the combining of different sectors. FTC Chairman Kim Sang-jo said earlier during an interview with a vernacular newspaper: 'We will be more forward-looking in examining the combination of enterprises regarding CJ Hello.
' Data provided by the Ministry of Science and ICT showed that KT had a 20.67 percent share in the subscription TV market in the first half of last year, while SK Broadband and CJ Hello had 13.
97 percent and 13.02 percent, respectively.
LG Uplus and KT Skylife had an 11.41 percent and 10.
19 percent market share. Once LG Uplus completes the acquisition of CJ Hello, it will become the No.
2 pay TV service provider with a 24.43 percent share after KT Group that encompasses KT and KT Skylife.
Amid the takeover news, LG Uplus' share price soared 612 percent to 15,600 won Friday, while CJ Hello's increased 15.12 percent to 11,800 won.
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