 |
| LS Cable plant in Donghae, Gangwon Province / Courtesy of LS Cable |
By Kim Hyun-bin
LS Cable is seeking to acquire KT Submarine to further widen its lead in the local undersea cable market.
"LS Cable is seeking to acquire KT Submarine and is under price negotiations with the firm," a senior industry official told The Korea Times.
KT Submarine has been showing growth in recent years taking up exclusive contracts to construct submarine fiber optic and power cables as well as other offshore construction projects.
Industry watchers believe the acquisition could create great synergy ahead of the government's Green New Deal initiative, which aims to increase wind and solar power generators.
In July, the government announced plans to build a floating offshore wind farm in the East Sea off the coast of Ulsan starting 2023.
"Submarine cables will become imperative to connect all offshore wind power generators and most likely a local cable firm will be handed the project. However, the government does not have a specific detailed blueprint on how they plan to initiate the Green New Deal," another industry official said.
The possible acquisition also comes as KT CEO Ku Hyeon-mo has expressed his desire to conduct a major corporate restructuring to focus more on the future growth engines of the telecom industry.
Ku has been aiming to increase investments in artificial intelligence (AI), cloud and advanced technologies in the B2B business while maintaining a stable profit in the mobile and media sector.
Since his appointment in March, KT's major task has been to dispose affiliates unrelated to telecom, namely KT Submarine and commerce business KTH, to further expedite growth and investments in key growth engines.
 |
| KT CEO Ku Hyeon-mo |
Regarding the possible restructuring, Ku said, "We will review the strategic value and plan to take drastic restructuring measures of affiliates that have no growth potential and synergy" with the company's key businesses, during a conference call after releasing their second-quarter earnings. "Once we decide (which affiliates to sell) we will swiftly conduct restructuring measures."
Through the restructuring measures, KT aims to enhance its mobility and investments in key telecom businesses to better enhance corporate synergy and fuel future growth.
In 2014, under his KT chairman predecessor Hwang Chang-gyu, Ku was in charge of initiating major restructuring measures as KT's head of strategy.
Ku was responsible for disposing of 17 affiliates unrelated to telecom including KT Rental and KT Capital and initiated a program calling for the voluntary resignation of some 8,300 personnel.
The move has drastically increased company profitability, growing from an 800 billion won operating profit in 2013 to 1.29 trillion won by 2015. Since then, KT's operating profits continue to exceed 1 trillion won annually.
As of Aug., 5, KT currently has 43 affiliates, and industry watchers say KT Submarine and KTH are the two non-telecom-related affiliates that when sold could produce much-needed funds for KT to further invest in the telecom sector.
KT said it has no plans to dispose of KT Submarine at the moment, while LS cable also denied the negotiation proceedings as the two companies have not officially made the issue public.
![[LIFE'S OLLE TRAILS 1] How hiking Jeju's 437km of trails changed my life](https://img.koreatimes.co.kr/upload/thumbnailV2/76a9bfb384714b8d8bb0078962a18259.jpg/dims/resize/178/optimize)
![[INTERVIEW] 'One Day Off' star Lee Na-young, director on creating subtle, feel-good series](https://img.koreatimes.co.kr/upload/thumbnailV2/796618f56a44402eabe81fe4530ab988.jpg/dims/resize/178/optimize)
