KT to invest $1.5 bln in IPTV, eyes 2011 breakeven

SEOUL, Sept 18 (Reuters) - KT Corp (030200.KS), South Korea's top fixed-line and broadband provider, said on Thursday it would invest $1.5 billion in the Internet Protocol TV (IPTV) business by 2012 and expected a break-even as early as 2011.

KT is offering a trial of full IPTV service, including real-time TV programme transmission, starting Thursday. A commercial service will start as early as in October.

Telecom operators in mature markets such as KT hope IPTV, which provides TV programmes and other interactive services such as e-commerce via broadband, will create new revenue sources.

South Korea in December passed a law allowing full IPTV service including real-time TV, after a long debate among broadcasters, telecom operators and authorities.

So far KT has provided only video-on-demand and some interactive features through its Internet-powered "MegaTV".

KT expects to secure 300,000 subscribers for its real-time IPTV by the end of this year and bring the number to 3 million in 2012. It has 6.7 million broadband subscribers, nearly 45 percent of the home market where it competes with No. 2 hanarotelecom inc (033630.KQ)

KT sees annual revenue from IPTV services, including video-on-demand and real-time TV, reaching 800-900 billion won in 2012, Yun Kyounglim, a senior vice president, told reporters.

It plans to spend 1.7 trillion won ($1.48 billion) on IPTV networks, set-top boxes and content between 2008 and 2012.

Separately, KT will start negotiations with major U.S. TV networks this year to provide more comprehensive news coverage through its IPTV, Yoon Jong-lok, head of KT's Growing Business Group, told Reuters.

By 0452 GMT, KT shares were down 1.79 percent, compared with the wider market's 3.56 percent drop. (Reporting by Rhee So-eui; Editing by Keiron Henderson)