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KT struggling to sell off KT Submarine

By Kim Bo-eun

KT is said to be tapping the market to sell off its affiliate specializing in submarine optical cables, but there appears to be little interest in the company.

KT Submarine, established in 1995, constructs and maintains optical submarine cables. It also installs offshore drilling facilities.

KT is seriously considering unloading its controlling stake in the affiliate. Previously, KT had attempted to sell the affiliate to Hyundai Heavy Industries in 2012.

Sources familiar with the issue said Tuesday that KT resumed efforts recently to sell the unit as a way to restructure its group of affiliates to strengthen the group's core strengths through the sale of unprofitable business units. Last year, KT CEO Ku Hyeon-mo stated that preparations were being made for structural changes, and that results would be seen in 2021.

KT currently has 44 affiliates in the sectors of broadcasting, online services, finance, security, real estate development, advertising and submarine cables employing 64,000 workers.

Ku, who was appointed last year, has been seeking to make the group lighter and more focused on core businesses as KT seeks to become a digital platform company.

The plan is to sell less relevant units and raise capital to invest in new growth engines such as big data, artificial intelligence (AI) and cloud computing.

KT under the leadership of Ku's predecessor Hwang Chang-gyu underwent major restructuring as 17 units unrelated with the group's main telecom business were disposed. Ku at the time oversaw the restructuring as head of strategy.

KT is seeking to place greater weight on its B2B clients, a shift from its former focus on the B2C market for mobile, internet and IPTV services, which have reached saturation. This was reflected in the group's reorganization for 2021 conducted last month.

"Given there have been talks of restructuring, the group could be seeking to sell off units with little weight in its portfolio," an industry source said. KT owns 36.9 percent of KT Submarine.

KT Submarine faces favorable conditions as the government seeks to increase wind and solar power generation under its Green New Deal initiative. The government unveiled plans last year to construct an offshore wind farm off the coast of Ulsan. This is set to provide opportunities for the company given submarine cables are needed to connect offshore power generators. KT Submarine's main business centers on communication cables, but it is seeking to expand to power cables.


By Kim Bo-eun

KT is said to be tapping the market to sell off its affiliate specializing in submarine optical cables, but there appears to be little interest in the company.

KT Submarine, established in 1995, constructs and maintains optical submarine cables. It also installs offshore drilling facilities.

KT is seriously considering unloading its controlling stake in the affiliate. Previously, KT had attempted to sell the affiliate to Hyundai Heavy Industries in 2012.

Sources familiar with the issue said Tuesday that KT resumed efforts recently to sell the unit as a way to restructure its group of affiliates to strengthen the group's core strengths through the sale of unprofitable business units. Last year, KT CEO Ku Hyeon-mo stated that preparations were being made for structural changes, and that results would be seen in 2021.

KT currently has 44 affiliates in the sectors of broadcasting, online services, finance, security, real estate development, advertising and submarine cables employing 64,000 workers.

Ku, who was appointed last year, has been seeking to make the group lighter and more focused on core businesses as KT seeks to become a digital platform company.

The plan is to sell less relevant units and raise capital to invest in new growth engines such as big data, artificial intelligence (AI) and cloud computing.

KT under the leadership of Ku's predecessor Hwang Chang-gyu underwent major restructuring as 17 units unrelated with the group's main telecom business were disposed. Ku at the time oversaw the restructuring as head of strategy.

KT is seeking to place greater weight on its B2B clients, a shift from its former focus on the B2C market for mobile, internet and IPTV services, which have reached saturation. This was reflected in the group's reorganization for 2021 conducted last month.

"Given there have been talks of restructuring, the group could be seeking to sell off units with little weight in its portfolio," an industry source said. KT owns 36.9 percent of KT Submarine.

KT Submarine faces favorable conditions as the government seeks to increase wind and solar power generation under its Green New Deal initiative. The government unveiled plans last year to construct an offshore wind farm off the coast of Ulsan. This is set to provide opportunities for the company given submarine cables are needed to connect offshore power generators. KT Submarine's main business centers on communication cables, but it is seeking to expand to power cables.


Kim Bo-eun bkim@koreatimes.co.kr

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