Korea's leading telco KT Corp has signed a memorandum of understanding withexhibitors Lotte Cinema, Cinus and MMC to install 100 digital cinema systems intheir theatres by the end of the year.

The move is part of KT'splan to install digital cinema systems in more than 500 screens, which isaround 30% of South Korea's total number of screens, by the end of 2007.

At present, leading theatrechains CJ CGV, Megabox and Lotte Cinema have a total of about 100 digitallyequipped screens, which use hard disk systems as well as network conveyancesystems.

KT Corp plans to make use ofits Broadband Convergence Network (BcN) to send digital films to theatres.

Overcoming a main point ofresistance for theatre owners in converting to digital, KT has opted to cover thecosts of the digital projection equipment which will cost about $100,000-$120,000per screen.

In addition to the $10m-$12mthat the 100 screens will cost this year, KT will have to spend about $50m onestablishing a platform and network to transmit the digital films.

In exchange for the digitalsystems, KT is to receive a virtual print fee for films it conveys on itsnetwork. Although details of the deal are undisclosed, it costs around $2,000on average to strike a print in Korea.

As part of an initiative tocreate new profits, KT also acquired major production house Sidus FNH lastyear, and is planning to enter the IPTV sector next year. With the digitalcinema system, its value added network will soon comprise content production,distribution and platforms.

The Ministry of Culture andTourism had announced plans to invest $49m in digital cinema from 2006 to 2009,and the Korean Film Council, under the umbrella of the ministry, is working toprovide guidelines for local digital cinema standards by the end of the year.