KT Chairman expects synergy to boost sales
KT Chairman Lee Suk-chae remains upbeat about the outlook of Korea’s largest fixed-line operator, saying that the country is now seeing synergy between its telecommunication and non-telecommunication businesses.
He believes that synergy will help boost the firm’s revenue in the near future.
Sending a congratulatory letter to all the employees Thursday to celebrate the three-year anniversary of the merging of KT and KTF (formerly separate telephone and wireless firms, respectively, now combine to KT), which fell on June 1, the chairman stated the recent rise of the firm’s non-telecommunication sectors was a positive sign.
“Experts are putting us at second place for highest revenue expectations among the 50 top (domestic firms),” Lee wrote in the letter. “What this means is that (the experts) expect a boost in operating profits from the synergy between telecommunication and non-telecommunication areas.”
KT is suffering from decline in profits from its telecommunication businesses due to the saturation of the market. The firm is also having trouble seeing returns for the large investment it put into 3G (third generation) technology, and was the latest of the three domestic mobile carriers to join the LTE (long-term evolution) market.
Amid the struggle, the only area that gave KT hope was its non-mobile businesses. Subsidiaries BC Card, SkyLife and KT Rental were the only businesses that saw a rise in profit for the first quarter of this year, and market analysts say the solid performances is increasing the expectations for those areas by the market.
Despite the hardship, Lee stresses in the mail that KT has kept its promises with investors to seeing an operating profit of 2 billion won for last year. The company marked 449.1 billion won operating for the first quarter this year, while analysts expect the numbers to rise per quarter throughout this year.
The chairman also took the occasion to slam government organizations for pressing the firm to decrease its service fees “unreasonably”: Korea Communications Commission (KCC) and Fair Trade Commission have slapped fines on mobile companies for price fixing, and continue to press them to decrease subsidiary prices.
Lee, though not mentioning Samsung Electronics and Apple by name, said “two large companies” have ridden its network for free and the firm lost possible revenue unjustifiably.