South Korean telecommunications firm KT said Tuesday it will invest up to 500 billion won ($421 million) in expanding its cloud computing business, with an aim to target government agencies and financial firms.

During a press conference in Seoul, KT announced its five-year business plan to support companies’ efforts to migrate massive data to cloud servers. KT pledged to increase the country’s cloud services market to 7 trillion won by 2023.

As the government is seeking to ease regulations on cloud services for sensitive areas, KT said it has set its sights on the governmental and financial sectors to compete against global providers’ market dominance.

“Private and financial markets are very sensitive to privacy issues and security breaches,” said KT Executive Vice President Shin Soo-jung, who leads the company’s information technology business. “We are going to lead the market by customizing the cloud computing service.”

While Samsung, LG and most Korean conglomerates work with Amazon Web Services and Microsoft to establish cloud computing services, local providers have been seeking to create a niche market following the government’s deregulation efforts.

In January, the government lifted a ban that prevented financial institutions from storing clients’ personal data on cloud service platforms. Efforts are also underway to introduce the clouding computing service to a wider range of government agencies, including municipalities.

KT said it currently offers cloud service platforms to more than 130 government agencies, including Korea Post. As for the financial industry, KT started KEB Hana Bank’s cloud services in April.

“The past few years have been tough” for the cloud computing business, said KT Vice President Kim Joo-sung, who leads the company’s cloud computing business. “We are hoping the government will encourage more financial companies to adopt cloud service.”

KT began its cloud computing business in Korea in 2010, but its presence has been overshadowed by global giants. Meanwhile, other local firms such as Naver have announced a series of business moves aimed at the domestic market.

KT has expressed hopes to emerge as a lead player, citing its prowess in telecom networks and the capability to process massive data. Such efforts are expected to gain traction as the hyper-speed fifth-generation wireless network becomes more popular.

The company said it would capitalize on “edge-clouding” technology to minimize latency for the 5G network. By the second half of this year, edge-clouding service will be integrated with artificial intelligence technology to become available for the internet of things.

“We are the only local provider for integrated cloud services,” said KT Senior Vice President Lee Kang-soo. “Compared to local telecom firms who don’t have their own cloud services and global companies who don’t have 5G network infrastructure, I think we can provide better services.”

(jasonyeo@heraldcorp.com)