The Korea Herald is publishing a series of articles titled Global Brand as part of the first installment of Power Korea. Korea’s success story is a 60-year-old tale written by not one, but many who worked to build one of the world’s most powerful nations from the ashes of war. This Global Brand series is designed to honor those who made this Korean Dream come true. This is the 13th part of the Global Brand series. ― Ed.


It is nothing new that the telecommunications industry is already a much saturated market in Korea.

KT, the country’s largest fixed-line service provider which has been paying close attention to declining demand in the telecommunications sector, began to look beyond the sector a few years back.

As a result, KT has seen up to 983 percent growth in its non-telecommunications businesses in the past four years. The company recorded 349.8 billion won ($313.5 million) in non-telecommunications projects in 2012, a sharp rise from 32.3 billion won in 2008.

“This could be seen as maximized synergy that resulted from securing project expertise from our newly acquired affiliates,” said a KT official.

Non-telecommunications businesses for KT include a wide variety of services that include the projects of its affiliates like KT Skylife, KT Rental and BC Card.

The range of their projects includes olleh tv skylife, a new hybrid broadcast method and car rental service as well as differentiated credit card service.

Top fixed-line service provider

KT, formerly known as Korea Telecom, started off as the Korea Telecommunication Association in December 1981.

The company’s serviced goods changed with the times as it was the operator of corded telephones in the 1980s and then a service provider for mobile phones and asymmetric digital subscriber lines in the 1990s and 2000s.

It also completed its transformation into a private company from a public one in 2002 and launched the world’s first WiMAX service in 2006.

With the arrival of the smart era in 2010, the firm was the first to introduce Apple’s iPhone 3GS in Korea, triggering the smartphone boom.

Last year, KT’s revenue reached 23.79 trillion won and it employed 32,515 workers as of September of last year.

In terms of mobile service subscribers, the figure has reached 17.4 million people as of September, taking up 32 percent of the local market, whereas its fixed-line broadband service subscribers have totaled up to 8 million.

Non-telecommunications biz growth

KT has 52 subsidiaries in four business domains ― telecom, media, information technology and convergence.

KT chairman Lee Suk-chae has repeatedly stressed the need for telecoms to make the change into an information communication technology company.

“There is no future if we only cling to network traffic fees. We must create a global common market for distribution of virtual goods,” he said in a keynote session at the Mobile World Congress in Barcelona, Spain, in February.

“KT is directly entering the virtual goods market and transforming from a traditional telecom to a global information and communications technology convergence corporation.”

He also said that telecoms must transform themselves into broadband-based virtual goods players, go beyond local markets and collaborate to create a global common market.

With that in mind, BC Card, which was acquired by KT last year, recorded $3.13 billion in revenue in 2011 with a subscriber base of 27 million.

With its slogan “the world’s best convergence service company,” it has rolled out over 450,000 mobile cards with a universal subscriber identity module that includes the subscriber information.

The number of people who applied for the eco-friendly “BC Green Card” has topped 4.7 million and the customer base of BC Global Card amounted to 2.9 million, its officials said.

Other growth engines

KT Rental and KT Skylife are the other two growth engines in the non-telecommunications sector for the telecom.

KT Rental, which reached $660 million in revenue in 2011, launched the industry’s first free navigation rental service for its rental cars. The company has been able to provide such services with its equipped IT technology made possible with the KT acquisition.

To further differentiate itself from others, it began the Harley Davidson bike rental service ― available in the range of 200,000 won a month ― for those looking for a unique leisure experience, its company officials said.

“While starting the bike rental service to meet the different customers’ needs in a wider range of rental cares, KT Rental is getting closer to its vision of positioning itself as the No. 1 comprehensive global rental company that enriches people’s lives,” said a company official.

Not only that, the firm said it has implemented a total safety solution called the Fleet Management System, which combines the navigation system, black box, back-view camera and vehicle management solution.

The company also established an overseas branch for the first time for a local rental car firm in Ho Chi Minh City, Vietnam, in 2008. Labeling the project a success, it opened another Vietnamese branch in Hanoi on Nov. 28 last year.

“We’re planning to expand our presence in the Southeast Asian market, including Vietnam, in the first half of this year as we make known the country’s advanced rental car services and its system in the international arena,” its official said.

The official also said KT Rental aims to record up to $10 million in exports in 2013, up from $5 million reached in 2012.

KT Skylife is another example of an affiliate that produced synergy by bonding with its parent firm KT.

With the introduction of its key hybrid broadcast product olleh tv skylife, also known as OTS, it posted record earnings in 2012. It recorded 551.3 billion in sales, up about 20 percent from the same period in 2011. Its operating profit also jumped 66.7 percent in the same term.

OTS incorporates Skylife’s real-time satellite broadcast with KT’s Internet protocol television service.

The total number of subscribers for the OTS service rose to 530,000 solely in 2012, adding one customer every minute, said Mun Jae-chul, chief executive of KT Skylife.

“The subscriber figure has gone over 3.9 million in March and it is expected to surpass the 4 million mark in the first half of this year,” he said.

The company also unveiled what it calls a television commerce channel together with another KT affiliate, KTH, in 2012 dubbed “Sky T Shopping.” The new channel enables its customers to order their products with their TV remote control while watching the program, its officials said.

“As the media industry is rapidly changing, the company is in the middle of transforming into a smart platform by teaming up with KT on a variety of developments,” said a KT Skylife official.

By Cho Ji-hyun (sharon@heraldcorp.com)