KT ventures into a new era

Korea’s fast evolving telecommunications industry can be traced through the history of the KT Group, founded in December 10, 1981, as Korea Telecom Authority - a spin off from the Ministry of Information Communications (now Korea Communications Commission).

Upon the company’s launch, there were only 4.5 million phone lines in Korea. However, 12 years later, this number has risen by more than four-fold, to 20 million.

In the early 1980s, the company started business on what now seems a rather distant past, including installation of Korean-made public telephones and starting International Subscriber Dialing service.

By 1997, KTA diversified its business portfolio, going beyond fixed telephone to launch wireless and Internet services.

The 2000s continued to be a lucrative decade for the group. In 2000, KT launched Asia’s largest Internet data center, Korea Telecom-Internet Data Center, or KT-IDC.

KT privatized fully in 2002 and started concentrating on building a broadband network. In just three short years, it had 6 million ADSL (Asymmetric Digital Subscriber Line, a form of DSL) subscribers. It also launched high-speed wireless Internet service Nespot as well as launching the world’s first WiBro (Wireless Broadband) service for commercial use.

As of 2008, KT was the ninth-largest private conglomerate in Korea, with assets totaling 24.13 trillion won ($19.1 billion) and sales of 18.95 trillion won. It also saw operating profit of 1.46 trillion won. It has 28 subsidiaries including KT Powertel, TRS (Trunked Radio System) unit providing radio communications service, KT Submarine, which operates submarine cable ships, Sidus FNH, an entertainment and film company, and Sofnics, providing e-commerce services.

KT also has numerous overseas offices and joint ventures including KT China, NTC in Russia and KTAI in the U.S., as well as offices in Moscow, Algiers, Dubai and Hanoi among others. This year, it designated Africa as its main target for future overseas business operations.

On June 1, the conglomerate embarked upon a new chapter when it completed its merger with its mobile unit KTF.

The merger is Korea’s largest ever in scale outside the financial industry. With the merger, KT expects sales to reach 27 trillion won, along with 2 trillion won in operating profit.

Chairman and CEO of KT

Bachelor’s in business administration,Seoul National University

Doctorate in economics, Boston University

“KT’s stock has not yet reflected the value of the merger with KTF, staying relatively the same,” said Park Jae-suk, an analyst at Samsung Securities Co. “But with the KTF merger, this is expected to change in the near future and the company’s status will see vast improvements in the information and communications market.”

This January, KT named Lee Suk-chae as chairman and chief executive officer. For most of his career, Lee had been a civil servant serving as a former Information Communication Minister, vice finance minister and economic aide to the president.

Last December, he was nominated as the sole candidate for the post of KT chairman.

During his past seven months as the leader of the KT Group, Lee stressed a need for the group to go global, improve transparency and differentiate itself from competitors, not through petty competition but through innovation and marketing. “Ruining other companies in order for KT to survive doesn’t fit with my business philosophy,” he said this February.

Lee has often urged employees to think of themselves as KT heads. After a meeting, even a very brief one, Lee stresses the importance of sharing the contents of the discussion with other employees.

Suk Ho-ick, vice chairman of KT and the head of the CR division, is also a KT newcomer.

He is the former head of the Korea Information Society Development Institute. Like Lee, he is a Seoul National University graduate. Suk also spent some time as a public servant, mainly in the information and communications ministry starting from the mid-1990s and he was a information society division head in the ministry.

With the merger, the new KT has announced its three core business divisions - retail customer division, home customer division and corporate customer division.

The individual customer division will be headed by KT President Kim Woo-sik. Kim started his career at Korea Telecom Corp. (now KT) during the 1980s and he became KTF vice president in 2002. As one of the only original members of KT, Kim is known to be a “woeyunaegang” character, meaning “fragile on the outside but strong on the inside.” Before he became a new KT president, he was president of KT Powertel.

The main concern these days of Ro Tae-soek, a president of KT and head of the home customer division, has to do with QOOK, KT’s integrated IT solution for homes, including Internet, Internet Protocol TV and home phone services. Upon the QOOK brand’s launch this April, Ro displayed his determination for a new start.

“We unified our individual services under this new brand in order to change our service marketing style and compete as an all-new KT Group,” he said. He is also a relative newcomer, starting in KT as the head of the company’s Busan operations in 2002, and is known to stress the importance of a hands-on approach to marketing, for example, initiating close-to-home events including a “knife-sharpening” event for QOOK customers.

Lee Sang-hoon, a president of KT and head of the corporate business division, started his career in KT as a head researcher at KT’s research center in 1991. As head of the corporate business division, Lee vowed to focus on IMO, or Infrastructure Management Operation - maintaining or fixing telecommunications networks for companies.

By Cho Jae-eun [jainnie@joongang.co.kr]