Reporter's Notebook CEO's efforts to cut cost help KT recover?

By Kim Hyun-bin

Ku Hyeon-mo, the newly appointed CEO of KT is reportedly seeking to take drastic measures to cut costs especially in promotions and marketing, at a time when it is critical for the firm to acquire overseas projects and increase its share value.

Ku was appointed to the post March 30 during the firm's annual shareholders meeting and has become the first KT insider in 12 years to lead the country's second largest mobile carrier.

KT CEO Ku Hyeon-mo

Some believe his firm grip and presence in the firm after having been a key KT employee for 33 years will reduce the need to go out of his way to prove his leadership ability to employees and shareholders.

Many industry watchers believe the firm being led by outside CEOs for the past 12 years could have reduced the morale of employees and as such Ku will need to revive internal synergy among the workforce as well as recovering share value and market competitiveness.

The new CEO has said he will open a “new era” within KT, but he will inevitably face major barriers from the freefalling company stock price and profitability, as well as the fallout from the COVID-19 pandemic, which has crippled both the local and global economy.

The poor performance by the company as well as the ongoing pandemic seems to have made Ku ultra-conservative, leading him to inevitably take the role of drastically reducing expenditures and cutting costs, rumored to be in marketing and external communications.

“Unlike the previous CEO, Hwang Chang-gyu, who put an emphasis on marketing and media, Ku doesn't seem to share the same ideas. If the coronavirus situation prolongs the company will inevitably cut marketing expenses further,” an industry official familiar with the matter said.

However, industry watchers say drastic cuts to the marketing and communications departments could hinder the company's efforts to attract new clients as well as compromise the opportunity to export its key technologies.

SK Telecom (SKT), KT and LG Uplus have been engaging in an intense marketing competition after jointly becoming the world's first to commercialize 5G networks, April 3, 2019.

SKT, the country's leading mobile carrier, has been busy expanding its presence nationwide partnering overseas with MS and Amazon Web Service to enhance its cloud services, as well as securing global projects with international broadcast stations and other telecommunications companies.

KT says it plans to focus investing in seven major fields to implement its 5G technologies ― smart factories, connected vehicles, reality media, tourism, supply chains, disaster management and public safety ― in order to partner up with international telecom companies to share its company knowhow in the 5G and artificial intelligence (AI) fields.

Ku also needs to be worried about the gradual rise of LG, which seems to be switching gears and chasing close behind KT to grab the second spot in the mobile market by increasing its investment in 5G content and attracting more foreign clients and partnerships to enhance its competitiveness globally.