The Telecommunications Industry's Focus on the Annual General Meetings of the Three Major Mobile Carriers

[Asia Economy Reporter Eunmo Koo] South Korea's three major mobile carriers are set to enhance their corporate value starting with their regular shareholder meetings this month. Attention is focused on SK Telecom CEO Park Jung-ho's remarks regarding the anticipated transition to an intermediate holding company structure. Meanwhile, KT CEO Koo Hyun-mo, entering his second year in office, is expanding new businesses and strengthening group restructuring. LG Uplus, under the leadership of Hwang Hyun-sik in his first year, is also drawing interest as to whether it will unveil concrete new business plans.

Will SKT Mention Plans for Transition to Intermediate Holding Company?

The biggest focus of SK Telecom's shareholder meeting scheduled for the 25th is its governance restructuring plan. Currently, SK Group's governance structure flows from Chairman Chey Tae-won and the owner family → SK Inc. → SK Telecom → SK Hynix. SK Telecom is highly likely to pursue a transition to an intermediate holding company by splitting into a business company and an investment company. Through this transition, SK Hynix can be elevated from a grandchild company under SK Inc. to a subsidiary, broadening its operational flexibility. Additionally, SK Telecom's investment company can enhance its value as an ICT (Information and Communication Technology) specialized company through subsidiary listings and other means.

Especially with the amendment to the Fair Trade Act raising the equity ownership requirement for listed companies' grandchild subsidiaries from 20% to 30% starting next year, SK Telecom must complete the transition to an intermediate holding company within this year. If delayed beyond this year, approximately KRW 9 trillion in funds would be required to increase the equity ratio based on current standards. Although this has not been officially listed as an agenda item for the shareholder meeting, there is keen interest in whether a more concrete message than in the past will be conveyed in some form.

Kim Hong-sik, a researcher at Hana Financial Investment, commented, "There is internal noise regarding the methods, making it difficult to reach a conclusion. If related discussions are not held within the first half of the year, it will be physically impossible to carry out a spin-off, making the timeline tight."

Quarterly dividends and stock options are also noteworthy. SK Telecom plans to amend its articles of incorporation at this shareholder meeting to establish the basis for quarterly dividends, allowing dividends four times a year, and will continue granting stock options to executives. These moves are interpreted as a demonstration of commitment to enhancing shareholder value and strengthening responsible management, as well as a strategic effort to secure shareholder support for future governance restructuring.

KT Expands New Businesses... Accelerates Restructuring

KT, whose shareholder meeting is scheduled for the 29th, is expanding new businesses while reinforcing group restructuring. Since his inauguration last year, CEO Koo Hyun-mo has expressed continuous intentions to enhance the competitiveness and corporate value of group companies through restructuring. To this end, KT has unveiled the B2B brand 'KT Enterprise' and the content-specialized corporation 'KT Studio Genie,' among other initiatives, to reorganize its business.

At this shareholder meeting, KT is expected to add 'freight transportation and freight forwarding (smart logistics)' and 'manufacture and sale of medical devices (bio)' to its business objectives, further supporting its transition to a digital platform company (Digico). Smart logistics is a business that introduces ICT into existing logistics operations and is managed by KT Labs, newly established under the AI·DX Convergence Business Division through an organizational restructuring last December. The bio business, based on AI and big data, is a healthcare business overseen by the Future Value Promotion Office.

Lee Seung-woong, a researcher at eBest Investment & Securities, evaluated, "Since KT has strengths in B2B, it is positive that they are opening possibilities and approaching various areas centered on the B2B market," but also pointed out the limitation that "immediate significant revenue generation and expansion into major business units are not expected."

Whether KT will formalize a media control tower is also a point of interest. As KT has consistently mentioned strengthening its media business, if a more advanced message than before is disclosed regarding the integration of scattered media organizations into one, it is highly likely that the overall valuation of KT's media business will rise.

LGU+ Welcomes New CEO, Focuses on Concrete New Business Plans

LG Uplus will appoint President Hwang Hyun-sik as CEO through its shareholder meeting on the 19th. If the agenda passes, President Hwang will officially assume the CEO position for a three-year term.

Previously, President Hwang expressed his intention to discover future growth engines by integrating new business-related organizations scattered across smart health, security, education, advertising, content, and data businesses. Amid evaluations that LG Uplus has not shown clear directions in non-telecom sectors compared to competitors, attention is focused on whether the shareholder meeting will announce concrete blueprints, such as the role of the newly established New Business Promotion Division responsible for new businesses.

Additionally, in accordance with the amended Capital Markets Act requiring at least one woman on the board of directors of large corporations, Yellowdog CEO Je Hyun-joo will be appointed as an outside director. CEO Je will provide advice on technology and industry trends based on her experience investing in startups.

This content was produced with the assistance of AI translation services.