S.Korea's KT bets on boost from IP-TV

By Marie-France Han

SEOUL (Reuters) - South Korea's KT Corp. (030200.KS: Quote, Profile, Research, Stock Buzz) expects rollout of Internet based television to boost revenue and plans to spend over $2 billion by 2010 on its ambitious fiber-to-home project, a company executive said on Wednesday.

As revenue growth from local telephones and broadband stalls, the country's top fixed-line and broadband operator is pinning its hopes on Internet Protocol television (IP-TV), which could also open the way for e-commerce and other services.

But slow regulatory approval for the marriage between telecoms and broadcasting has hampered progress.

KT, which initially expected to see regulation adopted early this year, is now focusing on stepping up its existing video-on-demand over Internet business.

"IP-TV is of great interest because it is related to home shopping," said Yoon Jong-lok, KT's senior executive vice president, at the Reuters Global Technology, Media and Telecoms Summit in Seoul.

To be able to provide content, KT has invested in film companies and other suppliers. It also reached deals for sports programming such as Major League Baseball, Yoon said.

He said revenue per user would increase as content was added.

KT, which has 92 percent of South Korea's landline market and 45 percent of broadband connections, expects to spend about 2 trillion won ($2.2 billion) by 2010 on its FTTH (Fiber To The Home) program, which will bring higher speed connections.

KT is also offering high-speed mobile Internet service based on mobile WiMAX technology, dubbed Wibro, in Seoul and nearby areas starting in April. The service allows high-speed access even in a fast-moving car, by blanketing entire cities with wireless connections.

KT has previously forecast more than 1 trillion won in revenue from the service in 2010. Yoon expected 25,000 won in average revenue per Wibro user once the service is on track, though it is currently offered at a promotional rate.

Yoon said the Wibro technology that KT has spearheaded could be adopted in the Middle East or Africa, but did not name any country to which it was discussing exports.

Analysts polled by Reuters Estimates expect KT to post 1 trillion won in net profit this year, down from 1.25 trillion won last year. Its shares rose 3.13 percent on Wednesday, outperforming the wider market's .KS11 0.71 percent gain, helped by its announcement of a $96 million share buyback plan.

($1=923.6 Won)

(Additional reporting by Rhee So-eui)