South Korea is the most advanced broadband market in the world.
It is available to 95% of homes and 75% of homes were taking
the service at the end of June 2003.
According to the DSL Forum, 30.4% of all phone lines were
carrying DSL at the end of the third quarter of 2003. Market
research group Point Topic expects that there will be around
13.5 million broadband users by the end of 2005.
Cable has lost market share to DSL — and so the
cable operators are having to fight back. Not only against DSL
but — in terms of getting multiple television channels
to customers — against direct-to-home satellite
They are investing heavily in digital technology so they can
offer their customers the triple play of voice over IP, fast
internet services and video —TV channels and, in time,
video on demand. But how do they get those services in the
A company called Broadband Solutions — BSI
— has gone into business to deliver a specialized
service to cable operators across the country, working with
Dacom, Korea's second largest fixed line carrier, which is a
shareholder in the project.
"The three biggest systems operators are scheduled to be
connected to BSI in February," says Sang-Yong Lee, managing
director of BSI, speaking to Global Telecoms Business at the
turn of the year. "By the end of 2004 we are forecasting 33
systems operators for our service." That will give 1.5 million
broadband cable subscribers across Korea access to
sophisticated digital services.
BSI is using Dacom's network to connect the cable networks
to its own digital "head end" — the term used in the
cable industry worldwide for what the rest of the
telecommunications business would understand to be a
combination of switch and network operations centre.
The head end, BSI's digital media centre, will be close to
South Korea's capital in Seoul, and will service all main
cities in South Korea.
From the DMC, BSI will feed enhanced services such as
interactive TV, video on demand, IP telephony, broadband
internet and "walled garden" content. Dacom is providing its
expertise as an internet service provider and voice over IP
operator. Powercomm, part of the Dacom group, will contribute
its backbone network to the project for high-speed IP and
Cable operators "have already upgraded their network to 750
megahertz bandwidth" in their local service areas, so they can
carry the new services to their customers, says Lee. "From the
network perspective they are already prepared. The issue is how
set up the head end system and provide data broadcasting
through the bandwidth on the digital network."
Cable operators are facing competition not only from DSL
providers but also from DTH satellite companies, says Lee. "The
number of subscribers to the satellite broadcasting service is
increasing rapidly so we will connect the cable service
providers to the DMC to make them able to provide a
broadcasting service to their customers."
BSI will be marketing the service jointly with the regional
cable operators, says Lee. "We are developing our own brand
name for the digital cable TV service, but in another sense the
subscriber belongs to the cable system operator and so
marketing to each customer is done by the cable system
operator," he notes. "We will work with each area system
operator to increase the number of customers. One of the key
factors will be deciding how we can launch the service
successfully in each area's cable system operator. We are
trying to find out what is the best way to promote and increase
the number of customers."
There will be a revenue share deal, but Lee was unwilling to
provide details. "It is complex, depending on how many
subscribers each operator has and their position in the
market," he says. "It's under negotiation with each operator.
It's fixed case by case."
Cable operators will be able to configure the services they
take from BSI using a service provisioning package being
supplied by JacobsRimell. It has an "identity driven,
subscriber-centric architecture" that will allow BSI to offer
triple play services, says Christopher May, managing director
of the OSS company's Asia-Pacific operations.
Each cable operator will be able to configure its own
service offering, taking services from a menu that includes
— as well as the standard triple-play services
— e-commerce, games, communities and content
"We have to compete with DTH satellite," says Lee.