Legislation, passed Dec. 28, establishes a regulatory framework for the new technology, which is expected to deliver a major shakeup to Korea's broadcasting sector.

Telcos such as Hanarotelecom, KT, and LG Dacom have previously only been allowed to offer "pre-IPTV" services centered around video on demand. The new bill will clear the way for the addition of live broadcasting and streaming Internet plus interactive services like e-commerce, multimedia messaging, video conferencing and more.

The debut of full IPTV is expected to greatly boost subscriber numbers for the three current players and challenge conventional cable and satellite TV providers.

Hanarotelecom's HanaTV, launched in July 2006, is the current IPTV market leader with 800,000 subscribers. A move by leading mobile operator SK Telecom to acquire a leading 39.8% stake in Hanarotelecom for $1.2 billion is being reviewed by the Fair Trade Commission.

KT, the country's leading fixed-line and broadband Internet provider, launched MegaTV in June and has signed up roughly 300,000 subscribers. The firm is aiming for 1.5 million subscribers by the end of 2008 and is co-operating with banks and the post office to introduce a variety of in-home financial services. Meanwhile a proposed merger between KT and mobile subsid KTF is likely to increase competition with its rival SK/Hanaro.

Recently launched myLGtv, from LG Dacom, has settled on a strategy emphasizing HD premium services, and aims to amass 200,000 subs in the coming year.

Firms such as KT have been held back from launching IPTV for more than four years as the Korean Broadcasting Commission and the Ministry of Information and Communication vied to regulate the new technology. The recently passed legislation gives both bodies a hand in regulation, a situation that has some observers concerned about bureaucratic red tape.

© Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

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