Thirty-five per cent of customers for the movie-driven service were new to the company, with the remainder coming from Hanaro’s existing base of residential broadband and telephony subscribers. Hanaro Telecom has acquired a massive 22,000 ondemand titles, totaling 16,000 hours from 50 content providers including Sony Pictures Television International, Walt Disney Television and CJ Entertainment. Currently, HanaTV is a download service with MPEG-4 Part 10 (H.264) compressed files delivered to any user with 2Mbps connection. The company aims to expand HanaTV to include live broadcast television by 2008 and says the creation of a triple-play bundle is part of its transformation into an integrated, multimedia company. The company has told investors that it expects to attract 250,000 subscribers this year, generating revenues of approximately 5 billion KRW (equivalent to about $5.25m or EUR4.1m), rising to one million subscribers with revenues of 70-80 billion KRW in 2007, and 1.5 million subscribers and 200 billion KRW by 2008.

Hanaro Telecom predicts break-even for the service next year and views television as a churn-buster that will help improve profit from existing subscribers, as well as being an engine for subscriber and revenue growth. These developments are sure to be watched closely, as broadband penetration already exceeds 70pc in Korea, and broadband subscribers have increased by only one million subscribers there over the past three years, according to DSL industry analyst Dave Burstein.