By Kim Yoo-chul
Lee Suk-chae, chairman and CEO of telecommunications giant KT, vowed Tuesday to develop more content-oriented revenue sources, saying it can't survive by only sticking to its conventional business models.
He said the nation's dominant fixed-line operator is going to spend 3 trillion won by 2017 on a "network revolution" in a strategy to offer creative contents and services that run on faster networks.
In detail, the company plans to invest 2.5 trillion won in backbone networks, while the remaining 500 billion won will be used to speed up networks for households.
The plan is based on an assessment that traffic of the existing high-speed Internet is already crowded.
"When we build up the new networks, then we can save up to 2.3 trillion won," the CEO told reporters.
"You should remember that KT aims to become more than a telecommunications company. We should create new content-oriented systems by using faster networks. By utilizing these, we also should produce services that haven't existed before," he said.
Lee said the firm has been paying "too much" to buy needed equipment from U.S.-based network equipment giants Cisco and Juniper, hinting at cutting its heavy reliance on Cisco.
"KT will build up networks that are standardized and commoditized," he said.
KT plans to secure funds by selling some company-owned assets. "We expect the new investment to create 25,000 new jobs over the next five years," he said.
The chairman also stressed KT is now an "active and serious challenger" in the changing telecommunications industry.
He said the firm is diversifying its business portfolios to non-telecom business sectors such as mobile, finance, media and car-rentals.
Global expansion
During the conference, the CEO said the firm will expand its overseas businesses to Africa, Southeast Asia and S. America to find new cash generators.
Lee said KT agreed with Rwanda to establish a joint venture — LTE Infraco — there. Under the agreement, KT will help the African nation build long-term evolution (LTE) networks over the next decades.
"KT is investing 150 billion won out of the total investment of 270 billion won for the Rwanda deal," said the CEO.
Rwanda plans to build LTE networks across the country over the next 25 years from 2014.
"This is a small but meaningful step. KT will export our products to Africa, South America and Southeast Asia through various measures including the establishment of joint ventures," said the CEO.
KT was consistent in developing its overseas businesses. But its attempts brought mixed results, hit by the lack of corporate awareness and stiff barriers to entering into the markets.
KT is also set to fine-tune its Internet TV business. It confirmed its plan to introduce a new set-top box based on new technologies. In a statement, it said it will introduce Web-based IPTV services that run on open-based software.
"IPTV will evolve as a two-way communication tool. Third party developers can create content and participate in related projects," said Lee.
He also said KT is the only Korean firm that can directly compete with chaebol.
Lee said he has no interest in controlling KT affiliates as KT has been active in separating them to guarantee management independence.
"Microsoft, Amazon, Google and Apple expanded their business territories with active acquisitions. That's the reason why we bought Enswers," he said.
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| KT CEO and Chairman Lee Suk-chae talks about the company's new business plans during a press conference at its main office in downtown Seoul, Tuesday. / Courtesy of KT |
He said the nation's dominant fixed-line operator is going to spend 3 trillion won by 2017 on a "network revolution" in a strategy to offer creative contents and services that run on faster networks.
In detail, the company plans to invest 2.5 trillion won in backbone networks, while the remaining 500 billion won will be used to speed up networks for households.
The plan is based on an assessment that traffic of the existing high-speed Internet is already crowded.
"When we build up the new networks, then we can save up to 2.3 trillion won," the CEO told reporters.
"You should remember that KT aims to become more than a telecommunications company. We should create new content-oriented systems by using faster networks. By utilizing these, we also should produce services that haven't existed before," he said.
Lee said the firm has been paying "too much" to buy needed equipment from U.S.-based network equipment giants Cisco and Juniper, hinting at cutting its heavy reliance on Cisco.
"KT will build up networks that are standardized and commoditized," he said.
KT plans to secure funds by selling some company-owned assets. "We expect the new investment to create 25,000 new jobs over the next five years," he said.
The chairman also stressed KT is now an "active and serious challenger" in the changing telecommunications industry.
He said the firm is diversifying its business portfolios to non-telecom business sectors such as mobile, finance, media and car-rentals.
Global expansion
During the conference, the CEO said the firm will expand its overseas businesses to Africa, Southeast Asia and S. America to find new cash generators.
Lee said KT agreed with Rwanda to establish a joint venture — LTE Infraco — there. Under the agreement, KT will help the African nation build long-term evolution (LTE) networks over the next decades.
"KT is investing 150 billion won out of the total investment of 270 billion won for the Rwanda deal," said the CEO.
Rwanda plans to build LTE networks across the country over the next 25 years from 2014.
"This is a small but meaningful step. KT will export our products to Africa, South America and Southeast Asia through various measures including the establishment of joint ventures," said the CEO.
KT was consistent in developing its overseas businesses. But its attempts brought mixed results, hit by the lack of corporate awareness and stiff barriers to entering into the markets.
KT is also set to fine-tune its Internet TV business. It confirmed its plan to introduce a new set-top box based on new technologies. In a statement, it said it will introduce Web-based IPTV services that run on open-based software.
"IPTV will evolve as a two-way communication tool. Third party developers can create content and participate in related projects," said Lee.
He also said KT is the only Korean firm that can directly compete with chaebol.
Lee said he has no interest in controlling KT affiliates as KT has been active in separating them to guarantee management independence.
"Microsoft, Amazon, Google and Apple expanded their business territories with active acquisitions. That's the reason why we bought Enswers," he said.
