KT Saenojo "Among the 3 Telecom Companies, Only KT Experiences Revenue Decline"

Operating Profit Growth Rate Low... Wireless Competitiveness Down

[Asia Economy Reporter Minyoung Cha] KT Saenoso announced on the 28th that it received a 'D' grade, the fourth overall rating, as a result of conducting the 2020 management evaluation.

The main evaluation items include management performance assessments such as sales and profits, as well as ESG (Environmental, Social, and Governance) performance evaluations including ethical management, labor rights, and sustainable management. These are comprehensively rated on a scale of six grades from A to F.

KT Saenoso pointed out that KT was the only one among the three major telecom companies whose sales decreased in 2020. KT's sales in 2020 were 23.9167 trillion KRW, a 1.7% decrease compared to the previous year. SK Telecom increased by 5.0%, and LG Uplus increased by 8.4%. During the same period, KT's operating profit growth rate was only 2.1%, while SK Telecom and LG Uplus grew by 21.8% and 29.1%, respectively.

In the core telecommunications business, KT's wireless market share dropped to 24.7%, down 1.6 percentage points from 26.3% at the end of 2019. It was pointed out as problematic that the gap with the first-place SK Telecom widened, while the difference with third-place LG Uplus narrowed. In the wired market, where KT has strengths, such as high-speed internet, the market share also decreased by 0.1 percentage points to 41.1%, making KT the only one among the three telecom companies to experience a decline in market share.

Criticism was also raised that the non-telecom strategy is insufficient to be considered a future growth engine. Based on the combined sales of corporate lines, corporate IT/solutions, and AI/DX sectors within KT Group's B2B sales, the sales amounted to 2.7741 trillion KRW, a 2.0% increase from the previous year. This accounts for about 11.6% of consolidated sales.

Regarding ESG, labor, and corporate culture, criticism was divided into ethical management, telecommunications public interest, working methods and internal innovation, and labor rights aspects.

In response, KT stated, "The evaluation of company-wide management performance is conducted transparently and fairly according to established policies and is approved by the board of directors," adding, "An evaluation conducted by a small number of people on some items is unlikely to have credibility or reliability."

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