KT Corporation

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KT Corporation
Type Public
Traded as KRX: 030200
NYSEKT
LSEKTCD
Industry Telecommunications
Founded 10 December 1981
Headquarters Seongnam, South Korea
Key people Chang-Gyu Hwang, Chief Executive Officer
Products Fixed line and mobile telephony, Internet services, digital television
Revenue KRW 20,166,817 million (2012)1
Employees 32,186 (As of end of 2012)
Subsidiaries
Website www.kt.com/eng/

KT Corporation also known as KT formerly Korea Telecom, in Korean 주식회사 케이티 (formerly 한국통신), is a South Korean integrated wired/wireless telecommunication service provider. KT focuses on information & communications business, and it has the largest portion of the South Korean local telephone and high-speed Internet market.

Originally founded in 1981 as a public corporation, KT actively led Korea’s transition to the information era and played a key role in promoting the growth of Korea into a globally recognized IT superpower. In 2009, KT merged with its mobile subsidiary KTF, paving the way to the convergence of fixed and mobile services. Since KT initially introduced iPhone to South Korea, it constantly seeks new business area, such as media, virtual goods, and global business with its domestic businesses experiences. The company has a well-distributed shareholder structure under which the National Pension Service (NPS) is the largest shareholder (6.81% as of December 31, 2012), but NPS holds no managerial rights over the company.2 Under the current shareholder structure, no controlling shareholder exists.

Company overview

Business philosophy and direction

KT has four basic business philosophies, which is to become a company that can think outside the box (innovative management), realize customers’ dreams (future-oriented management), read customers’ thoughts (communication-based management) and excite customers(offering services that are truly moving).citation needed

Vision

Global ICT Convergence Leader – This business vision of KT portrays the company’s commitment to make a huge leap forward based on the convergence of innovative technology. KT has a “3.3.7 Plan”, which is to raise its revenue by 3 trillion won to 27 trillion won, the KT Group operating profit margin by 3%p to 11.4% and its FMC* subscriber count by 7-folds to 2.1 million by the year 2012. KT, which plays a central role in promoting the growth of the KT Group as a whole, plans to use its convergence business to further expand its business, thereby achieving a revenue of 22 trillion won and an operating profit of 2.6 trillion won by 2012.citation needed

Credit rating

S&P Rating “A” (Nov.26, 2010) As of the end of December 2010, KT received an “A” rating from the global credit rating agency S&P. S&P’s “A” rating is given to companies evaluated as being of “Investment Grade” status, and applies to the six highest levels among the 23 rating categories at S&P.3 KT's A rating was cut from "stable" to "negative" in June 2012 due to competition from "free mobile voice-over-Internet protocol (mVoIP) services such as Kakao Talk's voice talk service". This "could potentially threaten KT Corp.'s wireless and fixed-line voice revenues".4

History

Before privatization

  • September 28, 1885: Telephone facilities set up between the cities Seoul and Incheon5
  • December 1981: KTA established
  • 1984: Tenth in the world to develop the electronic switch TDX-1
  • 1987: Completed nationwide installation of phone automation service
  • 1991: Company renamed Korea Telecom
  • 1993: Total of approximately 20 million telephone lines installed (only 4.5 million existed in 1982), thereby establishing the basis for advancement to the information society
  • 1995: Mugunghwa Satellite No. 1 launched
  • 1996: Mugunghwa Satellite No. 2 launched
  • 1996: PCS and CT-2 license acquired. KT Freetel (mobile business) founded.
  • 1997:Status changed from organization which has 50%+ state funding to one with a state funding of smaller scale (below 50%)
  • October 1, 1997: The new Public Corporation Business Structure Improvement & Privatization Act applied to KT (no longer exempted owing to the change in company status)
  • 1998: Headquarters relocated from Jongno-gu, Seoul, to Bundang-gu, Gyeonggi Province
  • December 1998: Newly listed on stock exchange
  • 1999: Mugunghwa Satellite No. 3 launched
  • June 2000: Managerial rights of Hansol M.com acquired
  • December 2000: IMT-2000 license acquired
  • April 2001: Caller ID (CID) service launched

After privatization

  • May 2001: Plans for privatization announced. Celebrated 20th anniversary and changed CI from Korea Telecom to KT. KT’s telephone offices restructured into regional branch offices. “Let’s” launched as the new company slogan.
  • 2002: Privatization of company completed.6
  • 2005: According to Fair Trade Commission data, KT as a corporate group that holds 12 subsidiaries and total assets of 29.315 trillion won, ranked 8th among Korea’s conglomerates.
  • December 28, 2005: Launched inter-Korean telecommunication services and opened KT branch office in North Korea’s Gaesung industrial complex
  • January 2009: Six days after inauguration as the new Chairman of KT, Suk-Chae Lee announced plans for KT-KTF merger at press conference
  • March 2009:7 Received conditional approval from Korea Communications Commission (KCC) on KT-KTF merger
  • April 2009: QOOK, new brand for home services, launched. The existing broadband internet service Megapass renamed as QOOK Internet, and Mega TV renamed as QOOK TV.

After KT-KTF merger

  • June 1, 2009: KT and its mobile subsidiary KTF merged to form a new unified KT
  • July 2009: Previous company slogan “All New” replaced with “Olleh Management,”and “Olleh KT” officially launched as the new CI
  • November 2009:8 Launched KT’s FMC service, QOOK & SHOW, and forecasted advent of the smartphone era
  • November 2009: Became first local carrier to launch Apple’s iPhone in Korean market
  • December 2009: Launched the first 3W (Wi-Fi, WiBro, WCDMA) phone “Show Omnia” in Korean market
  • June 2010: Launched KT’s cloud storage service, “Ucloud” service
  • August 2010: Company’s FMC service relaunched under new brand name “Olleh” in alignment with company slogan
  • August 31, 2010: KT included as Dow Jones Sustainability World Index company9
  • September 10, 2010: Launched Apple’s iPhone 4 in Korean market and unlimited 3G data plan10
  • November 11–12, 2010: As the official telecommunications service provider for the G20 Seoul summit provided the heads of states with powerful IT communication services.11
  • January 25, 2011: KT’s brand name for its fixed line services “QOOK” and wireless services“SHOW” consolidated and renamed under the brand name “Olleh”. Renamed as “olleh HOME” and “olleh MOBILE”.12
  • February 10, 2011: Acquired 20.05% of BC Card shares, emerging as the second-largest shareholder.13
  • January 3, 2012 : KT launched its LTE service.14
  • September 2012 : kt was awarded the Global Supersector Leader for Telecommunications (World No. 1 company in terms of sustainable business practices) by Dow Jones Sustainability Indexes for 2 consecutive years.15

Corporate governance

KT has adopted most of the corporate governance recommendations that comply with global standards, such as implementing the professional management system and operating an independent board of directors. By separating the roles of the CEO and BOD chairman, KT effectively established an objective and independent governance system, and is constantly endeavoring to improve its corporate governance structure, as reflected in its actions such as the issuing of the “KT Corporate Governance Charter” and establishment of a Corporate Governance Committee. KT was awarded the Hall of Fame Award (2007–2008) and Grand Prize (2010) by the Corporate Governance Service (CGS) in its corporate governance evaluation.citation needed

Board of Directors

KT’s Board of Directors (BOD) consists of three non-independent directors and eight outside directors, totaling eleven directors as of March 2012. The outside directors are nominated by the Outside Director Nomination Committee based on their expertise and business leadership, and hold office for less than three years. The BOD chairman is selected from among the outside directors and serves for a one-year term. The BOD consists of five standing subcommittees and two ad hoc subcommittees. If required, additional sub-committees may be set up. The current internal directors are Chang-Gyu Hwang (Chairman & CEO), Hyeon-myung Pyo and Il-yung Kim, and the external directors are Eung-Han Kim (Board Chairman), Chun-Ho Lee, Hyun-nak Lee, Byong-won Bahk, Keuk-je Sung, Sang-Kyun Cha, Do-Kyun Song.16

Brand

CI

Brand Color Red & Black Story. kt had its brand color changed from the previous blue to the red-and-black combination. The red is meant to signify passion, innovation, youth, and feelings of warmth and caring toward customers, while black is meant to signify legitimacy, collectedness, and trust. The dual color combination is used in the new kt brand to imply a new story of growth and development for the company, one in which kt supposedly embarks on a journey to achieve key values and undergo positive changes.citation needed

Brand image

The change in the lettering of “KT” to lowercase letters and incorporation of the image of a fluttering flag supposedly represent kt’s resolve to break away from its somewhat rigid corporate image and to become a more customer-oriented, friendly company with a warm, inviting image. While the flag is usually used as an identifier and a data symbol, in this case, it is meant to portray kt’s commitment to become “a global company venturing wide into the world with its flag flying high”.citation needed

Brand Identity (BI) “olleh” is the integrated brand name used to collectively represent all the kt services, including the fixed line as well as the fixed and mobile convergence products and services. It is allegedly an embodiment of kt’s business vision and philosophy, which is to enable customers to use communication services anytime anywhere based on an optimal network infrastructure, and to ultimately enrich customers’ lives by offering them more innovative products and services.citation needed

Services

Wireless

As of 2012 KT customers can receive the services on any of radio frequency band assigned, one or more of radio interfaces.17

Radio frequency range frequency width Generation Radio interface Assignment terms License Note
800 MHz (811-817,856-862) 12 MHz TRS
850 MHz (819-824,864-869) 10 MHz 3.9G LTE 50 billion won18 for 10 years planned
900 MHz (905-915,950-960) 20 MHz 3.9G LTE
1800 MHz (1735-1740,1745-1755,1830-1850) 35 MHz 3.9G LTE 2G by Jan/Mar 2012
2100 MHz (1960-1980,2150-2170) 40 MHz 3.5G W-CDMA 130 billion won for 15 years
2300 MHz (2330-2360) 30 MHz 3.9G WiBro 12.68 billion won with rural area support Mar 2019(for 7 year)

Smartphones and tablets

KT was the first operator in Korea to introduce the iPhone, into the Korean market in November 2009. Then, within just four months since the launch of iPhone 4 in September 2010, KT sold a sales of over 1 million iPhones. KT launched the iPad in November 2010.citation needed

Wi-Fi hotspots

KT provides 50,000 Wi-Fi hotspots service under the brand "kt Olleh WiFi zones".

LTE service

KT stopped 2G services in January 2012 for the Seoul area, and March 2012 for entire area of South Korea on the 1.8 GHz frequency, on which KT began LTE service as brand name "Olleh LTE" (올레 엘티이) and finished the LTE network support in all the area of South Korea by June 2012. KT is planning to add 900 MHz in Seoul for dual-band LTE service by the end of 2012.19

TRS

KT is the only operator that provides TRS in South Korea, as it merged t-on Telecom in September 2012.

Smart Home Service

In the first half of 2011, kt launched the “Kibot”, a robot specially developed for the education and entertainment of children, which has value-added features, such as more advanced versions of functionalities found on the existing video and Internet phones. In the second half of the year, kt plans to expand beyond voice services by actively pursuing Smart Home services, centering around a rich array of contents.clarification needed

uCloud Service

In June 2010, kt launched the uCloud service, a service that offers users access to a wide range of IT resources (i.e. infrastructure, platform, software), out of which users can selectively use and pay for just the resources they need. The uCloud service provides online cloud storage via both fixed-line and wireless networks. It can be accessed anywhere via portable devices, enabling users to download data wherever they are. “uCloud” is the name coined for kt’s cloud service, with the “u” standing for “ubiquitous” and simultaneously referring to customers in the second person as “you”.citation needed

Mobile TV

kt is also seeking to expand its media offerings, mostly viewed through the TV in the past, so that the service can be enjoyed anytime anywhere on various types of devices. As part of this efforts, kt launched the Mobile TV app service, which enables customers to view live IPTV and video on demand on their smartphones and tablet PCs. Using Mobile TV as the starting point, kt is now making multimedia services available to customers via PCs and third-party devices and creating a new culture for N-screen media services by offering connections to a wide range of contents such as e-books and online games.

Global business

KT provides global ICT services such as the establishment of public-private network infrastructures, telecommunications services, and managed services to global enterprises and government agencies around the world along with enhancing global wholesale services to guarantee the high standard of Internet and international call services.

Uzbekistan

In 2007, KT acquired 54.5% of East Telecom, Uzbekistan’s second-largest fixedline operator, and 60% of the shares of the WiMAX operator, Super iMAX.20

South Africa

In 2012, KT and Telkom signed for a consultancy agreement for providing business improvement strategies for mobile sector and iWayAfrica, Telkom’s subsidiary for its VSAT business.21

Mongolia

Since 1995, KT has been a major shareholder of Mongolia Telecom. KT dispatched business professionals to Mongolia and operated various training programs.22 In 2012, KT contracted with the Mongolian government for establishing an Earthquake Disaster Warning System (EDWS).23

Brunei

In 2012, KT contracted with the Brunei government to establish National Data Center (NDC) and its operation.24

Rwanda

In 2007, KT signed a contract to build a Mobile WiMAX (or WiBro) network in Rwanda.25 In 2008, KT signed a deal with the Rwandan government to build the backbone its new telecommunication network.26 In December 2012, KT conducted a national information security project in Rwanda with Korea Internet & Security Agency (KISA).27 In March 2013, KT signed a contract with the Rwandan government to establish the joint venture to build a nationwide mobile LTE network.28

Poland

In March 2013, KT, Daewoo International Corporation, and the Korea Trade-Investment Promotion Agency (KOTRA) signed a contract to establish high-speed Internet network in Podlaskie, Poland.29

Mutual growth with partners

Continuous efforts have been made by kt to cultivate an environment where collaboration is encouraged by preventing detrimental effects caused by lowest-bid price evaluations, raising maintenance fees, helping promising SMEs to build up on their competitiveness, and promoting more cash payments and acquiring additional financing.

In July 2010, in the spirit of promoting collaboration with SMEs, kt announced the “Three No Policy”. This in essence represents KT’s commitment to refrain from practices that hinder the growth of SMEs, such as taking action that causes them to waste their valuable resources, stealing away their technology and ideas or going up against SMEs as a competitor. kt aims to not only implement policies promoting collaboration, but to also help such partners apply their sustainable business policies to other partner companies of their own. To this end, KT is encouraging partners to adopt the cash payment policy more in the partners’ dealings with their own partner companies, and is also endeavoring to have the benefits of higher supply costs shared with these second-tier partner companies as well.citation needed

Smart working

As part of its initiative to establish kt as a great workplace, kt played a pioneering role in Korea by adopting the Smart Working system, a system that allows the employees the flexibility to choose their physical workplace. By adopting this innovative way of doing business, the company aims to help its female employees who struggle to maintain a healthy work-life balance. Working moms who apply for Smart Working are given the flexibility of working from their homes. Male employees can also sign up for Smart Working, and work at the KT office nearest to their home. As a means of further promoting this initiative, in September 2010, kt opened the Smart Working Center in its Bundang office, equipping the space with high-definition video conferencing and personal work spaces. As of 2011, there are a total of nine Smart Working Centers being operated. kt plans to increase this number to 35 by the year 2013.

KT-sponsored sports teams

Social contributions

IT Supporters

The "IT Supporters" program launched in 2007, is kt’s employee social volunteer service group established to transfer IT knowledge and provide a wide range of people with the benefits of IT services.33 IT Supporters, which offer their IT expertise and knowledge on a pro bono basis, is regarded as an exemplary case that created a huge paradigm shift in the area of corporate social volunteer services. The group, composed of 23 teams and 200 kt employees, carry out activities aimed at bridging society's IT gap and enhancing quality of life by promoting the benefits of advanced IT services.

KT Volunteer Corps of Love

KT Volunteer Corps of Love was founded in March 2001 to promote greater efficiency by integrating KT employees' volunteer activities, which had been conducted individually, into a systematic, companywide movement. The Corps consists of 700 teams with roughly 31,000 employees donating their time to various causes, such as supporting local childcare centers, the underprivileged, providing disaster relief, extending a helping hand to the farming and fishing communities, children’s education and scholarship programs.

Volunteer Fund

kt’s Volunteer Fund is a fund created in 2003 by the company and employees to support the corporate social responsibility programs, and consists of the employee donations and a matching grant provided by the company. The company contributes a grant that corresponds to the amount collected by the employees and this is used to fund the various volunteer activities. In 2010, thanks to the voluntary participation of 73% of the employees, a fund amounting to 1.74 billion won was created. This is being used to support the numerous volunteer work being conducted across the country by the volunteer teams. The matching grant made by the company is used to fund kt’s mid-to-long-term volunteer programs, such as the supporting of hearing-impaired children and the local childcare centers. The Fund is used in accordance with the operation regulations established by the Volunteer Fund Operation Committee, a committee composed of members from both the labor and management side. To ensure the transparent management of the fund, the fund usage details and supporting documents have to be registered on the KT Volunteer Corps of Love website.

Hearing-impaired children

Since 2003, KT has been helping hearing-impaired children and teenagers from low-income families to recover their hearing. As of the end of 2010, KT has funded artificial cochlear implants and rehabilitation treatment for 126 children, while 172 have been provided with digital hearing aids. In 2010, the support was further expanded to include the funding of auditory brainstem implants.

olleh Square

Olleh Square, located on the first floor of the kt Gwanghwamun office, is an multi-functional IT exhibition hall that is 3,300 square meters.

The former KT Art Hall was renovated and rebuilt into the Olleh Square in May 2010, after which the space was reopened under the name “Olleh Square”. Olleh Square is now recognized as Korea’s leading cultural space where visitors can come to relax and enjoy a culture respite. Visitors can try out new IT devices and services for free, hang out at the café, or enjoy concerts at the Dream Hall. The space has been used to host various events, such as the 62nd Armed Forces Day celebration and the iPhone 4 and iPad launch events. It is also popular with people interested in cutting-edge IT technology. Since the opening of the Olleh Square on May 24, 2010, the total cumulative number of visitors as of the end of 2010 is 527,333.

KT Chamber Hall

In May 2009, the KT Chamber Hall opened inside the KT Mok-dong ICC in Seoul after remodeling, as part of the company’s cultural program pursued to promote more active communication with customers. As the name suggests, the venue is designed to stage chamber music performances.

Sustainability

Responding to climate change

KT seeks to achieve a 20% reduction in CO2 emissions by 2013 (compared to 2007) through conservation of the existing energy sources, using alternative eco-friendly energy, improving the communication and IT infrastructure and adopting green technology in the work environment.

Real-time monitoring of energy consumption

During the course of implementing the government-supported new product development initiatives, kt developed a real-time energy consumption monitoring device to efficiently micromanage energy usage. This system also supports features such as target-level management, measurement, reporting and verification of the energy consumption and CO2 emissions. The system is currently being applied at kt’s office buildings that consume especially large amounts of energy, such as KT Mok-dong ICC (Internet Computing Center).

Smart grid investment

Kt is currently involved in the Jeju Smart Place test bed project led by Korea's Ministry of Trade, Industry and Energy, which is being pursued for the purpose of testing and developing smart grid business models. The project is being conducted on 6,000 households in Jeju island’s Gujwa-eup area, and is scheduled to be conducted over a period of 42 months from May 2009 to May 2013. The aim of the project is to provide an integrated energy management service and achieve the means for efficient energy usage by adopting renewable energy sources and energy storage devices. The project is being executed by the kt Consortium, which is composed of kt and 14 other companies, including Samsung SDI, Hyosung, Samsung Electronics, and four contractors, with the focus being to conduct demonstration tests on electric power-communication convergence business models.

References

  1. ^ "[About kt] Sustainability report - :: Enabling Transformation - Global ICT Convergence Leader ::". Kt.com. 2013-09-05. Retrieved 2013-09-30. 
  2. ^ "[투자정보] 사업보고서 - :: 사랑 받는 국민기업 - Global ICT Convergence Leader ::". Kt.com. Retrieved 2013-09-30. 
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  6. ^ Hussain, Tariq (2006). “Diamond Dilemma.” Translated by Lee Se-Min, Random House Korea, p.135. ISBN 89-5986-333-5
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  9. ^ Components – DJSI WORLD and DJSI WORLD EX USdead link
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  14. ^   (2012-01-02). "KT aims for 4 million LTE subscribers". Koreaherald.com. Retrieved 2013-09-30. 
  15. ^ "Sustainability Indexes - Review". Sustainability-indexes.com. Retrieved 2013-09-30. 
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  17. ^ "Korean Mobile frequency as of 27 Sep 2012". slowtime. Retrieved 30 October 2012. 
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  19. ^ "KT will add LTE 900 by end of 2012 in seoul". Retrieved 30 October 2012. 
  20. ^ "[kt Business] Global Investment - :: Enabling Transformation - Global ICT Convergence Leader ::". Kt.com. 2013-09-05. Retrieved 2013-09-30. 
  21. ^ "Operational Overview - Annual Results 2012 - Financial - Telkom Investor Relations". Secure1.telkom.co.za. Retrieved 2013-09-30. 
  22. ^ "[kt Business] Global Investment - :: Enabling Transformation - Global ICT Convergence Leader ::". Kt.com. 2013-09-05. Retrieved 2013-09-30. 
  23. ^ "MK News - KT to export earthquake early warning system to Mongolia". News.mk.co.kr. Retrieved 2013-09-30. 
  24. ^ "The Korea Herald-mobile". M.koreaherald.com. 2012-12-20. Retrieved 2013-09-30. 
  25. ^ "KT Leads Telecom Industrys Globalization". Koreatimes.co.kr. 2007-11-29. Retrieved 2013-09-30. 
  26. ^ "KT wins contract to build Rwanda`s backbone network : 네이버 뉴스" (in (Korean)). News.naver.com. 2008-10-09. Retrieved 2013-09-30. 
  27. ^ Eden Estopace (2013-01-03). "KT to help strengthen Rwanda's IT security". Telecom Asia. Retrieved 2013-09-30. 
  28. ^ "KT to build LTE network in Rwanda". Koreatimes.co.kr. 2013-03-10. Retrieved 2013-09-30. 
  29. ^ "KT Corp and Daewoo International Corp Get KRW 23 Billion Broadband Project in Poland-Dow Jones". Reuters. 
  30. ^ "sports.kt.com". sports.kt.com. 2012-10-30. Retrieved 2013-09-30. 
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