Free Trial

Global Telecoms Business
Global Telecoms Business Copying and distributing are prohibited without permission of the publisher

Triple play in Korea

01 April 2004

Sang-Yong Lee, managing director of South Korea's BSI, is building a broadband network to enable cable operators to offer the triple play of video, broadband internet and IP telephony ? plus other advanced services ? to their customers

Sang-Yong Lee
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 services.

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 first place?

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 broadcasting services.

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 personalization.

"We have to compete with DTH satellite," says Lee. GTB