Anti-trust watchdog rejects SK Telecom's bid to become media giant

By Park Sae-jin Posted : July 18, 2016, 16:25 Updated : July 18, 2016, 16:25

[Aju News DB]


South Korea's top mobile carrier SK Telecom saw its dream of becoming a media giant fading Monday after anti-trust regulators rejected the requested acquisition of a major cable channel operator.

In an effort to bolster next-generation businesses for sustainable growth in the saturated and competitive domestic market, SK Telecom has offered to buy CJ Hellovision (CJH), a unit of retail giant CJ Group, with a plan to merge it with SK Broadband.

The one trillion won (0.87 billion US dollars) deal was sent to the Fair Trade Commission (FTC) for screening on December 1 last year.

In its final ruling Monday, the watchdog rejected  the proposed merger saying it would help SK Telecom strengthen its monopolistic control of the market. "We found out that the consolidation of SK Telecom and CJ HelloVision would substantially hurt market competition."

SK Telecom, the flagship of South Korea's third largest conglomerate, SK Group, expressed regret but said it would respect the FTC's ruling.

The merger had been seen as a game changer in South Korea's media industry as it will help SK Telecom expand its business portfolio into mobile networks and entertainment content together.

But rivals KT Corp and LG Uplus have called foul over the deal, insisting it would allow SK Telecom to increase its dominant position in the mobile network industry. LG Uplus has argued the merger would cost more for consumers when they watch SK's pay-TV programs.

From the beginning, SK Telecom has insisted it could compete better with global content players such as Netflix, the US-based web-streaming giant which started its full service in South Korea in January.

"Global media players are engaged in borderless competition in the OTT (over the top contents) market. The domestic market is no exception, requiring a new change and innovation," the mobile carrier said in a statement on Monday.

Aju News Lim Chang-won = cwlim34@ajunews.com 
기사 이미지 확대 보기
닫기