KT set to become digital platform company
KT's AI secretary service, installed at a bakery in Seoul, helps a store owner by taking reservations, last Oct. 25. Courtesy of KT
By Baek Byung-yeul
KT's business strategy to become a digital platform company, providing media, a mobile platform, artificial intelligence (AI) and cloud computing services, is making successful changes, generating a meaningful earnings performance.
The telecommunications company unveiled its earnings for 2021, Wednesday, showing 40 percent of its sales occurred in its non-telecommunications businesses. The company announced that its sales and operating profit for 2021 stood at 24.89 trillion won ($20.8 billion) and 1.67 trillion won, respectively, up 4.1 percent and 41.2 percent from a year earlier.
The company had been aiming to generate an operating profit of more than 1 trillion won in 2022, but achieved the goal earlier than expected.
“We achieved our 2022 operating profit target early in 2021 thanks to stable sales growth in the telecom sector and the expansion of our business-to-business (B2B) platform through our digital transformation effort,” Kim Young-jin, the chief finance officer of KT, told investors.
Kim added that the company will achieve around 50 percent of its sales from B2B and digital platform services by 2025, excluding traditional telecommunications such as wired and wireless telecommunications and internet service sectors.
The company's DIGICO B2B division, which supervises its cloud computing, AI and internet data center (IDC) businesses for corporate customers, generated sales of 2.03 trillion won, up 2.5 percent year-on-year. Among these B2B services, cloud computing and the IDC business saw double-digit growth of 17.6 percent.
"In the recent government-led Digital New Deal and Green New Deal projects, KT is the only company in Korea that can provide integrated network, IDC and cloud services,” the CFO said. "We plan to focus on securing orders in the public sector by all public institutions' cloud conversion plans.”
Sales for the DIGICO B2C division, which supervises paid TV services and other mobile platform businesses, grew 5.8 percent year-on-year thanks to the expansion of mobile pay and media businesses.
Its internet protocol television (IPTV) service saw a 6.1-percent year-on-year increase in sales to retain the top market share position. This increase was possible due to the steady rise in the number of subscribers, the company added.