Tacks at telecoms diverge
While SKT is snapping up promising small businesses in the security and health care sectors, KT is downsizing by selling key affiliates.
KT decided to promote sales of its car rental company KT Rental and the financial loan subsidiary KT Capital at a board of directors meeting last Friday.
The revenues of the two subsidiaries last year exceeded 1 trillion won ($988 million), with KT rental posting 885.2 billion won and KT Capital 220.2 billion won.
Thus, when the news came out that the two affiliates are on the market, even people within KT said it was a shame that cash-cow affiliates were being sold.
KT Rental, which former KT Chairman Lee Seok-chae created by acquiring Kumho Rent-A-Car, is the No. 1 company in the industry, accounting for 25 percent of the market.
KT said it wants to focus on the company’s core competencies in information and communication technology.
Although KT Rental and KT Capital have good sales, KT Chairman Hwang Chang-gyu, who took charge in January, decided they had no synergy with the communications business.
Last month, Hwang cited energy, security, media, health care and transportation as the five major convergence service businesses that could boost the competitiveness of the company in combination with KT’s communications business.
“I plan to make adjustments in affiliates that do not contribute to KT’s competitiveness,” Hwang said.
A KT spokesman explained that it is likely that the money raised by selling the affiliates will be used to invest in those five convergence industries.
KT currently has 56 affiliates and 20 of them were added under the chairmanship of Lee Seok-chae.
On the other hand, SK Telecom is expanding by continuing to buy promising SMEs.
It acquired the security guard company NSOK in February, and last Tuesday, it became the largest shareholder of the MP3 manufacturer iRiver to enhance the “smart appcessory” business through mobile audio devices.
BY PARK SOO-RYEON [ firstname.lastname@example.org]
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