By Kim Yoo-chul
KT is one of the two top corporations in the local telecom industry, but as far as share prices are concerned, the Bundang, Gyeonggi Province-based outfit is struggling to find its feet.
Under the stewardship of Chairman Lee Suk-chae, the company has seen good times with the successful launch of the iPhone and iPad, which overwhelmed KT’s nemesis SK Telecom.
Yet, its stock price currently moves in the vicinity of 40,000 won, similar to the value of the firm nearly a decade ago when it was fully privatized midway through 2002.
Even the maneuvers of its executives and workers have fail to boost its value on the Seoul bourse ― Chairman Lee has personally shelled out 200 million won to buy about 5,000 shares.
Other KT executives also forked out billions of won to snap up the outfit’s shares, with Vice Chairman Suk Ho-ick purchasing 1,220 and division head Lee Sang-hun and Seo Yu-yeol locking up 1,000, each.
The firm even offered stock incentives under which each of its 31,000 workers received 400,000 won on average.
``We want our employees to buy more company shares. KT’s labor union has decided to buy shares voluntarily,’’ said a senior KT official who asked not to be named.
Despite such efforts, the share price depreciated by more than 10 percent from 46,250 won late last year to around 40,000 won, while that of SK Telecom remained almost flat over the same period.
The bearish moves are in contrast between top-tier telecom carriers in the United States and Japan.
Top American carrier Verizon Wireless saw a 16 percent increase in its stock value during the same period, while top-tier Japanese telecoms NTT DoCoMo and SoftBank rose by 17.6 percent and 51.3 percent, respectively.
A KT spokesman refused to say why its share price is languishing, but insiders point out that the bearish moves have something to do with Finance and Strategy Minister Yoon Jeung-hyun.
Yoon has reiterated that the country’s telecom service prices are overly high. Whenever he comes up with such comments, they weigh on investor sentiment, who worry about KT’s bottom line.
The Korea Communications Commission (KCC) has also pressured mobile operators to lower telecom bills amid the woe of runaway inflation weighing on the country.
``Concerns are running high that better earnings won’t provide a stable cushion for KT since more earnings equally mean more cuts in telecom bills,’’ said Park Jong-su, an analyst at Hanwha Securities.
Last year, KT saw 20.23 trillion won in sales ― an increase of 6.7 percent from the previous year ― while operating profit spiked 117 percent to 2.05 trillion won.
There’s no question among most analysts that KT shares are currently ``undervalued,’’ even considering negative issues.
KT, which is the first local exclusive partner to sell Apple’s iPhone and iPad, has been set to continue its ``smartphone boon’’ by introducing the next iPhone ― the iPhone 5 ― and upgraded iPads.
Amid the explosive demand for wireless data thanks to the rising popularity of ``smart’’ portable devices, KT, which has the edge in fixed-line infrastructure, plans to invest more to expand its own wireless networks.
``A delay for the iPhone 4 and cuts in telecom bills were a burden to KT, last year, however, stock prices revived afterwards. We expect KT to gain momentum soon,’’ said Yang Jong-in, an analyst at Korea Investment.