The new CEO of Korea Telecoms, Hwang Chang-gyu, intends to focus on its domestic telecommunications business so as to increase his company’s competitive edge at home. In light of this, the nation’s second-largest mobile carrier intends to review its strategy and business projects for Africa.
The outgoing Chairman Lee Suk-chae had already signed an agreement in March 2013 to invest $140 million to build a $G mobile network in Rwanda that will serve 95% of the country’s population.
“The new CEO will reexamine our African business projects from a zero-base,” he said.
KT is also in talks with the Kenyan government to establish a joint venture to build a 4G LTE mobile broadband.
In fact, many parts of overseas projects are the legacy of the outgoing chairman who placed emphasis on two areas ― expanding the company’s overseas presence and diversifying its business portfolio ― to cut its heavy dependence on the domestic telecommunications market.
While market leader SK Telecom was passive in bolstering its international profile, KT was spending “billions of dollars” to export its telecom solutions to countries in Africa and the former Soviet Bloc.
The review of the overseas projects came as many KT officials feel a sense of urgency in domestic market competition because its globalization efforts are seen to have sacrificed its competitiveness in the telecom market.
“It’s pity that we are fighting with LG Uplus, the smallest local carrier, not the leader SK Telecom in the heated race for the long-term evolution (LTE) market. The number of our customers was falling and it’s fair to say corporate profitability isn’t so good,” said another KT official, stressing its management needs to find balances between telecom and non-telecom businesses.
But KT officials made it clear that the review does not necessarily mean that it aims to reduce its overseas projects as new CEO Hwang understands the importance of overseas business. Hwang didn’t respond to calls for comment from The Korea Times.
