With little to lose, LG U+ takes aggressive stance

LG U CEO Lee Sang-chul (second from left) explains his vision for the company and its new fourth-generation (4G) service to reporters at a hotel on Jeju Island Friday afternoon. Provided by the company

JEJU - For the last decade or so, LG U+ has been the country’s smallest carrier.

The company - the telecom unit of LG Group - had to settle for just around an 18-percent share, while SK Telecom enjoyed a 50-percent share and KT a 30-percent share.

But LG U+ is saying “no more” to being No. 3 - louder and clearer than ever.

It’s pinning much of its hopes on its latest services and products - especially the fourth-generation (4G) wireless technology - creating quite a marketing and advertising buzz, and some notable results in its healthy third-quarter earnings.

“Mobile network operators can no longer survive by just doing network business,” LG U+ CEO Lee Sang-chul told reporters on a recent press conference themed “4G Era: Direction of Changes for the ICT (Information Communication Technology) business” on Jeju Island.

“The long-held structure in the past had been that carriers provide consumers with content and services using their networks. But Apple and Google have broken that formula - offering content and services directly to users without networks. And that means carriers are in crisis and must revolutionize.”

Lee, 63, has had an illustrious career in the country’s IT industry, serving as Korea’s information and communications minister and the president of IT powerhouse Korea Telecom (now KT), among other roles.

“Being the smallest player also means that it’s got that little to lose,” Lee said with confidence. “So in this changing time, we plan to go to the ‘eye of a typhoon’ and not just linger in the periphery,” he explained in obvious reference to the high risk his company is willing to take in this crucial time.

Already things are starting to change - in particular with LTE, a type of 4G service that SK Telecom and LG U+ launched in July.

Although KT is known to soon launch LTE and play aggressive catch-up to make up for its late entry, already SK Telecom and LG U+ have an early lead in the LTE market and the gap is quite narrow.

LG U+ says that the number of its LTE users is nearing 270,000, as of Nov. 24, which it alleges is more than that of SK Telecom. (SK Telecom said on Nov. 16 that the number of its LTE users was 260,000.)

LG officials said at the Jeju conference that the company will finish setting up the LTE networks in more than 80 cities across the country - which can be thought to be “nationwide” coverage - by the end of this year. That is ahead of SK Telecom’s similar plans set for April of next year. SK Telecom moved up the target by eight months from its original early-2013 target after it learned of LG’s plans.

And LTE is just the beginning of a bigger scheme, Lee says.

With its nationwide LTE network - added to its existing Wi-Fi (Wireless Fidelity) network and broadband Internet network, LG U+ says it will become the world’s first telecom company to provide voice, data, and video on a converged network. (Currently, there is a separate network for voice.)

By Kim Hyung-eun [hkim@joongang.co.kr]