KT chairman cites success of expansion since mergerKT, the nation’s second-largest telecommunications company, in the past four years since merging with KTF has succeeded in expanding its nontelecommunications businesses.
“We have succeeded in transforming into an information telecommunications technology and media company, which everyone thought was imprudent,” KT Chairman Lee Suk-chae said in an e-mail to employees Thursday.
The fourth anniversary of the KT and KTF merger was Saturday.
In 2009, KT specialized in fixed-line service, while KTF was the second-largest mobile telecommunication service provider. The merger was expected to change the telecommunications landscape because KT targeted attracting a larger number of subscribers through its packaged services that combine mobile with fixed lines and other broadband Internet.
However, KT’s ambition has not yet been achieved as SK Telecom remains the market leader.
Instead, KT while scaling back on fixed line service been focusing on other services like high speed internet and IPTV.
According to KT, revenue from its nontelecommunications business grew from 1.1 trillion won ($978 billion) in 2008 to 6.8 trillion won last year. Operating profit from such business increased tenfold from 32.3 billion won in 2008 to 349.8 billion last year.
The company expects revenue to reach 1.3 trillion won from its media and content business this year.
The telecommunication giant also has aggressively sought out mergers and acquisitions during the four years, setting the stage to expand overseas. KT bought small and midsize start-ups with technology ranging from real time streaming to education systems.
The telecommunication giant’s chairman, however, stressed that KT will not be satisfied with the achievements it has made so far and looks forward to finding new business areas to further expand the company.
He said the next target KT has set its sights on is virtual goods market,
Virtual goods previously referred to nonphysical goods traded by virtual communities like online games. However, with the spread of smart devices it now refers to music, videos, e-books and other content.
KT expects virtual goods to expand to other conventional businesses such as finance, education and medical services.
“Our project is now to establish a virtual goods market while expanding overseas,” Lee said.
By Shim Jae-woo [email@example.com]