KT sees new growth in content

By Kim Yoo-chul

Telecommunications giant KT plans to widen its partnerships with technology startups and creative talent as it believes its future growth momentum will depend on its ability to build a content ecosystem for mobile Internet users.

The country’s biggest broadband Internet provider and runner-up mobile carrier believes it is critical for the company to become more than just a seller of network access and have a larger role in content value, like Apple has with its immense network of iPhone and iPad customers.

KT Chairman Lee Suk-chae Monday announced plans to create a 100 billion won fund to help small- and medium-sized businesses and content developers devoted in games, animated films and music over the next three years as the company accelerates its efforts to create its own content pool for mobile Internet devices. The company will gradually increase its investment in the fund.

``Individual content producers and small- and- medium-sized enterprises (SMEs) will use the fund. We will help them find business opportunities outside Korea if their content is competitive enough,’’ Lee told reporters at a news conference in Seoul.

``Psy’s Gangnam Style has attracted more than 200 million views. This show the potential of virtual goods and why it is more important to provide value and experience instead of just selling voice minutes and data allowances.’’

In explaining KT’s new direction, Lee waded into the issue of the intellectual property dispute between Samsung Electronics, KT’s biggest business partner, and Apple over smartphones and tablets.

While he avoided talking about who should do what, he says that the success of firms in information technology is increasingly depending on the ability to provide a content ecosystem. It’s more than just about strong hardware and networks, he said.

``That’s why we need organized support from SMEs and other content developers. We will finance them and they will develop their products. This is a new day. KT was a second-tier player in the media content market. But that’s the past and our future will be different,’’ he said.

``If KT creates a new content eco-system, then we can advance. We need to invest in this without worrying about seeing profit from the investment immediately.’’

Lee also expressed confidence in strengthening the company’s position in the growing market for fourth-generation (4G) long-term evolution (LTE) communications.

In a recent unveiling event for the LTE-compatible iPhone 5, Apple Senior Vice President Philip Schiller said his company’s new handset will run on the 1.8-gigahertz band, which KT uses for its LTE network.

``KT will maintain leadership in the Korean market for iPhones,’’ said Pyo Hyun-myung, head of the company’s mobile customers division.

Pyo confirmed talks with Apple to gauge the release timing of the LTE iPhone 5 to its existing customers. ``Of the all iPhone users in Korea, over 74 percent or 2.4 million are registered to KT. As you know, KT was the first to introduce iPhone, here.’’

Stressing its various pricing plans and competitiveness in network management, Pyo said his company will narrow the market gap with leader SK Telecom.

KT has lagged behind rivals SK Telecom and LG Uplus, the country’s smallest mobile carrier, in launching LTE services.

But according to company spokeswoman Kim Yoon-jeong, KT has been increasing the number of its LTE customers at an impressive pace in recent months.

``It’s nonsense we started the so-called subsidy war. More customers are using our networks because we are offering highly-improved network services along with attractive pricing plans,’’ said Pyo.