Thrunet

» see thrunet.co.kr as it lived, on the wayback machine

~ the goodbye ~

In 1998 I was getting online in Turkey over a 33.6k modem that had to start the whole negotiation again every time somebody in the house picked up the telephone. In the same year Thrunet was selling Korean households about a megabit over cable television wiring, always on, no dial tone involved. Both of those things were called the internet and they were not the same internet.

Thrunet came out of a 1996 joint venture between TriGem Computer, then one of Korea's largest PC makers, and Korea Electric Power Corporation. KEPCO was the interesting half of that arrangement. The power company had optical fiber running along its grid into every part of the country and no consumer business to put on top of it. Trial service started in November 1996 and leased lines followed in July 1997. Commercial high-speed access into ordinary homes arrived in 1998, over hybrid fiber-coax.

Korea's broadband lead over the rest of the world is usually dated to roughly this point, and Thrunet is the company that opened it. The market noticed. On 17 November 1999 it became the first South Korean company to list directly on NASDAQ, in the middle of the bubble, on a story that was actually true.

~ the chronicle ~

~ the grid was the network ~

The technical shape of Thrunet is worth stating plainly because it explains both the speed and the debt. KEPCO fiber carried traffic between neighborhoods; coaxial cable television lines carried the last stretch into the apartment. Korea's housing stock was dense and vertical, so one fiber run could serve thousands of households behind a single node. That is why the economics worked at all in 1998 and why they did not work anywhere with detached houses and long driveways.

It also meant Thrunet had to build. A telephone company selling ADSL was reusing copper it already owned and had already paid for. Thrunet was laying and lighting plant, borrowing to do it, and pricing aggressively against incumbents who had less to recover.

~ the receivership ~

What killed Thrunet was not demand. Korean broadband subscriptions kept climbing straight through its collapse. What ended it was that KT and Hanaro answered with DSL over telephone lines they already owned, and the price war that followed compressed everybody's margin while Thrunet was the one carrying construction debt. NASDAQ delisted it on 7 April 2003 and the company went into court receivership the same year.

The customers did not leave, which is the strange part. Three years into legal administration, in May 2005, Thrunet still had around 1.27 million subscribers, and as late as April 2003 it held roughly 29.6 percent of the country's HFC broadband market. Everyone expected a run for the exits after the receivership filing and it never came. That loyalty is exactly what made the buyer hesitate about what to do with the name.

~ the merger ~

Hanaro Telecom agreed to acquire Korea Thrunet on 4 February 2005 for 471.3 billion won, something near 460 million dollars, and closed it that March. In June a Hanaro executive told the Korean trade press that they could not simply delete a ten-year-old brand, that studies were underway, and that the newly installed Thrunet president was actively arguing to keep it. Another executive in the same piece said keeping it would ultimately prove impossible.

The second executive was right. On 1 January 2006 Thrunet merged into Hanaro Telecom at a ratio of 0.3570308 Hanaro shares for every Thrunet share, and the broadband service was folded under the Hanafos name. Hanaro was itself bought by SK Telecom in 2008 and renamed SK Broadband, so the country's first broadband company now survives as a line in a mobile carrier's history page. thrunet.co.kr does not resolve.

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