Bold Strategic Moves
LG U+, which has remained the third largest player in the Korean telecom market, is seeking to seize the No. 1 position with an aggressive expansion strategy.
It is negotiating a partnership with Netflix and is pushing to acquire with cable TV operators. The company is also trying to take the lead in the 5G market by building its network with low-cost equipment from China's Huawei.
LG U+ has recently seen a remarkable increase in the number of IPTV subscribers. As of the end of June, the number of subscribers to LG U+ IPTV is 3.79 million, up 14.5% from a year earlier. This compares with a 5.4% increase for KT and 9.1% for SK Broadband. Compared to 2013 (1.68 million subscribers), the number has more than doubled (2.3 times). Also, the five-year increase rate is the largest among the three companies (1.5 times for KT and 2.2 times for SK Broadband). If this trend is maintained, the number of LG U+ subscribers is expected to exceed 4 million this year.
LG U+ is likely to gain momentum thanks to its alliance with Netflix, the world's largest online video provider (OTT). As of now, LG U+ is in the process of negotiations with Netflix for service partnership. The two companies are known to be close to a deal. When the contract is concluded, LG U+ will be the first in the domestic IPTV industry to acquire Netflix content. The partnership between the two companies will likely provide Netflix content to subscribers directly through the existing U+ TV’s IPTV set-top box, without a need to install additional equipment.
LG U+ is also in the process of acquiring CJ HELLO, the No. 1 cable TV company. As LG U+ has shown a strong intention to acquire the company, the acquisition is likely to be done within this year.
In the 5G market, LG U+ has also been showing some bold moves. LG U+ is the only one of the three Korean mobile companies to show a willingness to buy Huawei 5G equipment. LG U+ has already internally selected Huawei as its 5G equipment vendor.
At the time of LTE commercialization, LG U+ was the only one to choose Huawei equipment among the three companies. LG U+ said that adopting Huawei equipment is inevitable because it needs to enable the interlocking with the existing LTE equipment for the 5G.