LGU+ Unveils New Business "30% Non-Telecom Revenue by 2025... Good News on Disney+ Expected"

CEO Hwang Hyun-sik Holds First Meeting Since Inauguration
Declares Customer-Centric 'Digital Innovation Company'

[Asia Economy Reporter Joselgina] "I will focus on the areas where we excel. The LG Uplus I want to create is a ‘digital innovation company that leads enjoyable changes in customers' daily lives.’"

The blueprint for new businesses that will secure LG Uplus's future growth has become concrete. CEO Hwang Hyun-sik has been personally overseeing this area since his appointment at the end of last year. While upgrading existing services such as the popular kids content ‘U+ Idle Nara’ to a platform business, the company is also accelerating its B2B (business-to-business) solution businesses including smart factories and mobility.

Through this, LG Uplus plans to expand the revenue share of non-telecom businesses to 30% by 2025 and transform into a ‘digital innovation company.’ Mergers and acquisitions (M&A) will also be pursued focusing on six core areas that will form the foundation of new businesses such as artificial intelligence (AI) and big data.

◆ Expanding Non-Telecom Revenue to 30%... Declaration as a ‘Digital Innovation Company’

On the 30th of last month, CEO Hwang held his first press briefing since taking office at the Yongsan headquarters in Seoul and stated, "Through new growth, we will expand the share of non-telecom revenue from the current 20% level to 30% by 2025."

Specifically, he emphasized ‘qualitative growth’ based on strengths. In the B2C (business-to-consumer) sector, new services and original content will be expanded centering on ▲U+ Idle Nara ▲U+ Idol Live ▲Augmented and Virtual Reality (AR·VR) ▲U+ Pro Baseball and U+ Golf, creating a virtuous cycle that strengthens services using data secured from these. In particular, U+ Idle Nara will be upgraded into a platform that can be used by parents and teachers as well.

CEO Hwang explained, "Rather than investing in our own online video service (OTT), we will focus on strengthening existing services and actively expand investment in original content." However, the specific scale of content investment has not been finalized.

In the ‘land of opportunity’ B2B sector, the plan is to maximize the capabilities held by LG Group. CEO Hwang said, "We will grow smart factories and mobility in connection with manufacturing affiliates within the group," adding, "We will also create new growth in cloud and AI customer centers."

The smart factory business is expected to show significant results starting next year. In mobility, synergy is anticipated in connection with LG Electronics' strengthening of its automotive parts business. He pointed out, "In the future, the biggest non-telecom business will be media areas like IPTV," and "In terms of growth rate, it will be B2B sectors such as smart factories and mobility."

LG Uplus carried out an organizational restructuring effective July 1 to align with this new business direction. The ‘New Business Promotion Division,’ established at the end of last year, was reorganized into the ▲Idle Nara Business Unit ▲Content & Platform Business Unit ▲Advertising Business Unit. A data-related organization was also established directly under the CEO. However, the head position to lead new businesses remains vacant. For the consumer division head, which was also vacant, LG Electronics MC Overseas Sales Group Head (Vice President) Jung Su-heon, formerly of the US telecom company Sprint, was recruited.

◆ Accelerating M&A in Six Core Areas... "Will Bring Good News on Disney+"

LG Uplus, which has been criticized for being passive in responding to market changes compared to competitors, clearly stated that it will engage in strategic investments and M&A going forward. The six core areas forming the foundation of new businesses are AI, big data, cloud, content, security, and B2B solutions.

CEO Hwang said, "We prioritize investments in AI solution companies that cover AI, big data, and B2B solutions." LG Uplus plans to expand related personnel from the current approximately 800 to around 4,000 by 2025 to secure capabilities in these six areas.

Currently, LG Uplus is also considering equity investments in companies related to the metaverse (3D virtual world). The focus is on introducing the metaverse into existing services rather than building a platform. However, CEO Hwang drew a line on cable TV M&A, saying, "Investments for quantitative growth are given a lower priority." Regarding the possibility of merging with LG HelloVision, he added, "It is not at a stage where it can be done yet, and it has not been reviewed internally."

On the same day, CEO Hwang expressed optimism about a partnership with the OTT giant Disney Plus, which is scheduled to enter the Korean market in the second half of the year, saying, "We are discussing in a positive direction." He said, "Once negotiations are completed, we will be able to share good news," and added, "Compared to competitors, we have advantages in three aspects: customer convenience, target segments, and marketing collaboration with overseas companies."

Regarding whether Huawei equipment will be used for the 28GHz 5G build, he responded, "It is not appropriate to say that we will or will not use equipment from a specific company," but added, "Huawei equipment is not used in the core network, and we are thoroughly addressing security issues through domestic and international consulting firms."

Regarding negotiations with CJ ENM, which recently escalated to a blackout (broadcast interruption) incident on mobile TV U+tv, he said, "We apologize for the inconvenience caused to customers," and added, "Both parties will negotiate with an open mind to ensure that customers are not harmed."

Since his appointment as CEO at the end of last year, CEO Hwang, who has emphasized the ‘true fan’ strategy and qualitative growth, cited the most encouraging achievement so far as "reducing customer pain points." He emphasized, "We will reduce customer pain points to zero," and said, "The truly important internal goal is to be ‘the company with the lowest churn rate.’"

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