S.Korea's KT wants Internet-TV profit split with Google, Apple

SEOUL Mon Feb 13, 2012 1:15pm IST

A South Korean worker pulls down a signboard of KT Corp. in Seoul December 26, 2005. REUTERS/Lee Jae-Won/Files

A South Korean worker pulls down a signboard of KT Corp. in Seoul December 26, 2005.

Credit: Reuters/Lee Jae-Won/Files

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SEOUL (Reuters) - South Korea's top Internet provider, KT Corp (030200.KS), said on Monday it would demand a share of the profits companies like Google Inc (GOOG.O) and Apple Inc (AAPL.O) derive from Internet-enabled TV services as network operators vie for a bigger stake in the burgeoning industry.

KT took its first step on "free-riding" Internet TVs last week by limiting access to certain TV applications offered by Samsung Electronics Co (005930.KS), the current top manufacturer of Internet TVs. KT argues such services could slow overall network speeds.

Global technology giants from Apple to Google and Samsung are rushing into the Internet-enabled TV market, hoping they can replicate their enormous success in the smartphone market in the living room by offering services such as high-quality videos, movies, games and social networking via TVs.

Telecoms operators, which are under growing pressure to upgrade their networks to support increasing data traffic, are also seeking to enter the fray to eke out larger profits in the potentially lucrative market.

"We want the value of our network recognised by (Internet TV) platform operators and want to create a business model that enables us to share profits generated from using our networks," Kim Hyo-sil, a KT executive, told reporters on Monday.

"Those Internet-TVs can be likened to heavily-loaded trucks dominating network highways and slowing down the overall speeds, and the issue only becomes more serious as the Internet TV market grows."

Samsung, which hopes to build on its dominance of the TV market in the Internet-enabled TV segment, argues networks should not discrimate against content or services and its applications do not cause massive traffic slowdowns.

"Samsung is a pure manufacturer making TVs, smartphones and computers. It's not logical to demand network fees from a manufacturer that makes products using networks," Samsung said in a statement on Monday.

Samsung, the world's top TV manufacturer, aims to sell 50 million TVs this year globally with half the shipments Internet-enabled.

Google is also preparing to launch its revamped Google TVs through an alliance with LG Electronics Inc (066570.KS) as early as the second quarter in North America after its previous version failed to gain traction.

Apple is widely speculated to be developing an Internet TV for launch in the second half of this year.

(Reporting by Miyoung Kim; Editing by Matt Driskill)

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