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| Koo Hyun-mo, newly appointed KT CEO |
By Kim Hyun-bin
Can new KT Corp. chief executive Koo Hyun-mo change the nature of the telecom dinosaur?
In terms of the overall corporate structure, KT is a rare breed of South Korean telecom operator, in terms of its business portfolio, as the country's No. 2 telecom operator doesn't just sell telecom-oriented services but also offers non-telecom products.
Such collective pushes have so far brought underwhelming results. Its stock prices have been flattened because the corporate efforts for business diversification apparently failed to attract investors. KT is still heavily dependent upon the wholly-saturated, highly-competitive and thinner margin telecom business here.
Now, the new corporate CEO Koo Hyun-mo himself is feeling just like he is going to do "something different" as KT officials said the CEO is better-positioned to pursue "active communication" with KT employees, corporate board members and executives as he is the first KT insider in 12 years to lead the business group.
While he is subject to approval from shareholders with a meeting slated for March before commencing the position, it's very unlikely he will be denied the post.
Focus will be on how he will apply strategy to make the corporation function well. KT is battling with its two bitter local rivals ― SK Telecom and LG Uplus ― for bigger stakes in the growing fifth-generation (5G)-oriented telecom services. Also, shareholders are asking top KT management to offer higher dividends for their investment in the corporation.
"Koo is facing challenges on multiple fronts in various aspects in swiftly acquiring technologies relating to the fourth industrial revolution and his key priority is how to help KT see progress in the 5G network business," a KT official said.
Having served as the chief of KT's customer and media division, Koo is better known as a "hidden force" in strengthening the company's presence in the Internet-based TV market and successfully launching the company's Over The Top (OTT) platform.
Business expansion or profits?
New growth opportunities for the country's three major telecom companies rely on how swiftly they acquire technologies and personnel that suits the Fourth Industrial Revolution including 5G, AI, big data and Internet of Things (IOT). Last year, the three telecom companies became the world's first to commercialize the 5G network. KT took 30.4 percent of 5G subscribers, accounting for 1.32 million people in November.
Unlike its somewhat impressive outreach in these segments, results in terms of corporate profitability weren't satisfactory. Hit by the increased spending to promote its 5G services and build base stations supporting the advanced telecom system, KT suffered a 15.4 percent decline in operating profit during the third quarter of last year from a year earlier.
"Koo has a lot of pressure on his shoulders becoming the first in-house CEO in 12 years as his performance could dictate whether to appoint another insider as CEO in the future," an official from one of the major telecommunication company said.
KT recently announced plans to invest 300 billion won for AI over the next four years in accordance with its plan for some synergy between 5G and AI.
Another point is whether or not he will be aggressive in pursuing acquisition deals for corporate sustainability. For example, KT tops the pay-per-view segment accounting for 31.31 percent of the market last year, but it is being chased by SK Telecom and LG Uplus as the rivals have been catching up quickly by expanding their presence via acquisition deals.
KT previously attempted to acquire some stakes in overseas telecom service companies, however, the efforts failed to generate any results. In order to hedge investment risks, KT was turning its eyes to team up with partners for joint collaboration in businesses the company is eyeing.
On Thursday, KT said in a press release that it reshuffled the corporate structure in a way to boost its presence in "customer-oriented" and "digital transformation" segments.
Such initiatives are set to be pushed by multiple company presidents in terms of highlighting the beauty of "collective efforts" for management efficacy. KT appointed one president, two vice presidents, five executive directors and 21 directors through the reshuffle.
Aides close to the outgoing CEO Hwang Chang-gyu had been forced to leave the corporation. "Koo and Hwang were not in good shape as Koo is outspoken," an industry source told The Korea Times.
The new KT chief executive is one of seven incumbent and former executives including the outgoing CEO Hwang, who are under prosecutorial investigations for corruption charges.
