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KT Broadband Convergence Network (BcN)

Market incumbent and technology pioneer, KT Corporation of South Korea, has announced US$3.1bn CAPEX guidance for 2006 despite a dismal revenue performance during its earnings call for the last quarter. One-third of this will be spent on upgrading infrastructure and deploying technologies that will help secure its long-term market position. KT has no choice - it has to spend and speed up its upgrade process.

Despite lackluster performance in 4Q05, KT Corporation remains undeterred in realizing its broadband convergence network (BcN) objective. This year it plans to spend one trillion Korean Won (US$1.03bn) on technology enablers of its next generation network. In particular, two services are being planned this year to create a much-needed revenue growth avenue for the operator: IPTV and Wireless Broadband (WiBro).

In particular, out of the three trillion Korean Won (US$3.1bn) CAPEX guidance for 2006, KT allocates KRW500bn (US$517m) on WiBro deployment, KRW50bn (US$52m) on IP Media with possible deployment within the year, KRW300bn (US$310m) on next generation networks (NGN), and KRW150bn (US$155m) on other growth areas (such as content).

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