KT confirms talks with Disney

KT CEO Ku Hyeon-mo speaks during a press conference at the company's headquarters in Seoul, Tuesday. Courtesy of KT

By Kim Yoo-chul

There are no guarantees when it comes to the telecom business, as the local industry is already saturated and the margins of Korea's top three telecom firms have been under pressure because of intense competition in terms of customer acquisition.

It's fair to say that the country's telecommunication industry is a declining business model due to continued stiff regulations and financial burden that keep the leading players afloat in advanced telecom services that will be operational within fifth-generation (5G) networks.

But KT is assessing tried-and-tested ways of helping it possibly thrive and prosper. Its rapprochement is based on the belief that the rising OTT services will grow further after the company's senior executive confirmed its stronger intent of partnering with Disney Plus.

A senior executive of KT has confirmed the telecom firm's intention to partner with Disney Plus.

“Because no mobile carriers have reached an official partnership with Disney Plus, it would be tough to say so at least, officially. However, KT is in talks with Disney Plus on multiple fronts. The chief of Disney's Asia business is a Korean American,” Kang Kook-hyun, president of KT's customer business, said in a press conference, Tuesday.

“Disney Plus isn't KT's competitor as Disney may handle the overseas sales and distribution of KT's in-house content. We could make joint investments in content if we are mutually interested,” the executive told reporters.

CJ's media affiliate, StudioDragon, is also partnering with Netflix.

“We are aiming to grow KT's in-house content house ― Studio Genie ― with a valuation of 1 trillion won. We are tasked to realize a vertically integrated business structure to move forward with the plan and we hope to talk about this,” Kang said, adding the company may separate its content business from its headquarters.

Disney Plus plans to expand its subscribers dramatically over its chief rival Netflix in the Asia-Pacific region. Disney Plus is aiming to end up with at least 66 million paying subscribers in Asia this year, more than double the 32 million subscribers it had by the end of last year. Netflix has been successful in Korea both in terms of profit and the amount of subscribers it secured since its launch here.

But Disney Plus has yet to even launch in several of the more developed Asian markets where Netflix generates sizable revenue including Korea.

During the press conference, showing its intention to cut its dependence on the saturated, money-losing telecom business, KT said it aims to invest 400 billion won to secure 100 patents and intellectual properties related to entertainment. Its CEO Ku Hyeon-mo told reporters its acquisition of Hyundai HCN could help it net 3 trillion won in revenue from its media business.

“We think we can generate profits from the media content business,” the CEO said, adding KT has less interest in acquiring D'Live, Korea's leading cable channel. KT's media business generated 3.2 trillion won in revenue last year, growing 15 percent annually on average over the past decade.