LG aims to challenge telecom giants

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LG aims to challenge telecom giants

LG Group, the third-largest company in Korea, has stepped up its telecommunications businesses. LG Corp. recently recruited Jung Hong-shik, former deputy minister of information and communication, as the president of its telecommunications business division at the financial holding firm of the group, the first such group-level appointment. “We have appointed Mr. Jung, a telecommunications magnate, as the president of the division in an effort to focus on the telecommunications field,” said Chung Sang-kook, vice president of LG Group. “Mr. Jung will serve as an executive of the financial holding firm, and will work to draw up a blueprint of the group’s telecommunications businesses.” Mr. Jung, whose appointment will be official as of July 1, will manage investments in the group’s telecommunications arms, such as LG TeleCom Ltd., Dacom Corp., and Powercomm Corp., and formulate strategies. LG’s emphasis on telecommunications is seen as a bid to rival giants SK Telecom, Korea’s largest mobile service provider, and KT Corp., the biggest fixed-line and high-speed internet carrier, according to industry observers. LG currently has LG TeleCom, the third-largest mobile service provider, Powercomm, a network leasing firm, and Dacom, the second-largest long distance and international call carrier, under its arm. LG is also the largest shareholder of Hanaro Telecom, the second-largest player both in the local call and high-speed Internet markets. Despite having both wired (Dacom, Powercomm) and wireless (LG TeleCom) companies under its wing, LG has not really been successful in coordinating them to rise as a power player. If LG’s telecommunications subsidiaries could join forces successfully, analysts said, the group could have a major impact on the industry. “If LG can pull together, it will bring about fundamental changes in the telecommunications industry,” said Yoo Young-hwan, policy bureau director at the information ministry. Mr. Jung passed the government examinations for mid-level civil servants in 1971, and participated in drawing up telecommunications policies at the office of prime minister and the Blue House. In 1989, he joined the Ministry of Information and Communication and rose to the rank of deputy minister. Since 2000, Mr. Jung has headed Telson Electronics Co., a mobile handset maker. Park Un-suh, chairman of Dacom, who has virtually spearheaded the LG’s telecommunications business, will now concentrate on managing the firm. by Lee Won-ho

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