SK Telecom Retools Organization
Company Split Into Four Independent Divisions in Restructuring
By Cho Jin-seo
Staff Reporter
SK Telecom said Friday that it has divided its organization into four separate divisions to give more autonomy and responsibility to each part's executives.
By establishing the ``company-in-company'' system, SK Telecom abolishes the tenure-based executive hierarchy, which is typical in East Asia, and turns to the Western-style power structure based on duties and performances of each employee. Since last year, the company made it compulsory that its non-executive-class employees are called by their job titles, not by their ranks ― a very rare case in South Korea.
The change in the organization structure is also expected to give more power to its Internet contents business and overseas businesses, which have been somewhat overshadowed by the domestic mobile phone business.
``As the uncertainty in our business environment increases, each business unit needs to develop its specialty under its own responsibility and freedom,'' the company said in a statement. ``We hope the restructuring will help our global and convergence business units produce visible results.''
The four in-house companies will be called by their acronyms. MNO (Mobile Network Operation) Biz Company will be in charge of the phone network _ the bread and butter business of the firm. Global Biz Company will take care of the firm's overseas businesses in China, United States, Vietnam and other countries. The C& I (Convergence and Internet) Biz Company will deal with all the other businesses except the mobile phone network, such as Internet contents, media, movie, music, home networking and mobile trading. Last but not least, CMS (Corporate Management Support) Company will be the headquarters of the firm, being responsible for finance, human resource, PR and other supporting activities.
The firm appointed three new executives to the Company President positions: Ha Sung-min to President of MNO Biz Company; So Jin-woo to President of Global Biz Company; and Oh Se-hyun to President of C So Jin-woo to President of Global Biz Company; and Oh Se-hyun to President of C& I Biz Company. The CMS Company will be headed by Kim Shin-bae, the chief executive officer. It also named Lee Gyou Bin as the new chief finance officer.
SK Telecom is the largest mobile service operator in South Korea with 21.8 million subscribers, which is 50.5 percent of the market. It posted sales of 10.6 trillion won and an operating profit of 2.58 trillion won last year.
Its largest shareholder is Citibank, which has 29.89 percent on investment purpose. SK Corp., the holding company of SK Group, and other affiliates own a total of 23.09 percent. The portion of foreign investors is 45.96 percent. The government limits foreign shares in telecommunication companies to 49 percent.
SK Telecom recently bought the controlling shares in Hanarotelecom, the second largest fixed-line telephone and Internet service company. Rumors have been spreading that Hanarotelecom will be merged with SK Telink, another fixed-line telephone subsidiary of SK Telecom. Both SK Telecom and SK Telink denied the speculation.
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