Reporter's Notebook KT CEO pursuing 'organic change'

KT CEO Ku Hyeon-mo speaks during his New Year's address, Jan. 4. / Courtesy of KT

By Kim Yoo-chul

Sometimes, but not always, steady enhancements are well-driven by thoughtful leaders. But other times, improvements only happen as aspiring leaders acknowledge when to step aside and let them happen organically.

For KT, the country's leading telecom company, its growth momentum has long been stalled. It might have been acknowledged but it has long been turning a blind eye to how hierarchy-driven changes create stiff barriers to success.

Rigidity, bureaucracy and bulkiness had been the words commonly used for decades to describe the telecom company, as well as core factors that kill employees' enthusiasm. KT reported 23.4 trillion won in revenue and 1.2 trillion won in operating profit last year. It has 42 affiliates and employs 60,000 full-time and contract employees.

Two past controversial CEOs ― former senior government official Lee Suk-chae and ex-Samsung CEO Hwang Chang-kyu ― became embroiled in various scandals including accusations of bribery, embezzlement and collusive ties to influential political figures. Consequently, KT's business growth momentum was badly hit.

Now, its new CEO Ku Hyeon-mo seems to have identified agility, core strengths and lightness as his credentials to help the telecom improve transparency and boost corporate sustainability in the medium to long term. Ku, a long-time in-house figure who took power, is on track to unload non-core assets and retire unprofitable businesses rather than seeking bulky external growth as pursued by his two predecessors.

Last week, KT named IDIS, a local security solutions provider, as preferred negotiator for a controlling stake in the radio systems unit of KT Powertel. The disposal of its 44.85 percent stake in KT Powertel, if it materializes as scheduled, would bring KT 40 billion won.

Given the estimated monetary value from the disposal, the announcement isn't that substantial. However, what is of note is that Ku has set his sights on a lightweight and streamlined structure as the desired direction.

“The question is how even a light touch from leadership could possibly bring visible and tangible results. KT's stock price has stagnated even though stock market investors were bullish on stocks. KT's management has to ensure investors that there would be many rewarding investment opportunities for investors willing to seek out long-term rewards by investing in KT stocks. I believe KT CEO Ku is trying to tell investors that their investments will continue to grow,” a senior industry official said Sunday.

Regarding the possibility of unloading its shares in KT Submarine, a lackluster group affiliate in terms of growth potential, KT said it can't comment on M&A issues being discussed. But it added that Ku will never stop exploring ways to improve the company's value on multiple fronts through restructuring.

Given its ownership structure with the National Pension Service (NPS) holding 11.91 percent as of Dec. 7 last year, Ku's task is how to successfully avoid “invisible influences” from the political circle to move forward with his agenda. The fate of the KT CEO has long been on the minds of various “external forces” in sync with government administrations, with parachuted candidates typically receiving extra credits for the top spot. Ku's fixed three-year term will expire in March 2023 and whether or not he will be given another term is subject to approval in a shareholders meeting.