[2022 Hot IT Companies⑥] LG Uplus Expands Non-Telecom New Businesses to Soar as a 'Digital Innovation Company'

Fostering New Businesses in Six Key Sectors Including AI
Expanding Non-Telecom Business Revenue to 30% by 2025
Focusing on Content Partnerships and Production

[Asia Economy Reporter Eunmo Koo] LG Uplus is gearing up for a strong drive to transform into a ‘digital innovation company’ in the second year of CEO Hwang Hyun-sik’s tenure next year. To this end, the company plans to enhance the execution of core strategies and operate an agile organization. In the increasingly important content business, it aims to boost competitiveness through a two-track approach of partnerships and production.

Hwang Hyun-sik, CEO of LG Uplus

Next Year’s Management Keyword: ‘New Growth Business’

At the event on the 25th of last month marking the launch of the ‘28 GHz 5G-based subway Wi-Fi and rural 5G shared network pilot commercialization,’ CEO Hwang responded to a question about next year’s management keyword by saying "fostering new growth businesses." At his first press briefing in June, he also stated, "By 2025, we will expand the revenue share of non-telecom business sectors from the current 20% to around 30%," identifying artificial intelligence (AI), cloud, big data, security, business-to-business (B2B) solutions, and content as six new non-telecom business sectors.

Next year, LG Uplus plans to strengthen its B2B sector in line with the telecom industry’s recent trend of ‘de-telecom.’ In particular, it will maximize the use of LG Group’s capabilities in manufacturing and system integration (SI) based on it, and actively partner with leading operators to create new growth engines in smart factories, smart mobility, cloud, and AI customer centers.

Recently, the company carried out an organizational restructuring. While maintaining the overall business division structure, it established new detailed business groups to enhance expertise. The technology division was renamed CTO. The CTO will strengthen agile service development and support for business organizations through innovation in development methods to quickly reflect consumer demands. Executive Director Lee Sang-yeop, head of the technology development group, leads the organization as CTO.

The consumer division was reorganized into business and service groups. The goal is to strengthen the qualitative growth of the consumer business and provide consumers with new experiences through service differentiation. Under the consumer division, a Digital Commerce Business Group was newly established by integrating digital-related organizations. This group is tasked with providing new digital customer experiences, mainly targeting the MZ generation. The consumer division’s competitiveness is led by Executive Vice President Jung Soo-heon, who was appointed in July.

Content Business: Targeting with Two-Track Strategy of Partnerships and Production

In the recently spotlighted content business, LG Uplus is also aiming to secure leadership through partnerships and production. First, its own content will focus on areas necessary to strengthen AR (augmented reality) and VR (virtual reality) services related to Kid’s Land, professional baseball and golf, and idols. The recent appointment of Lee Sang-jin, who joined LG Uplus last year after working at CJ ENM and HYBE, as Senior Manager in charge of content business, and the designation of Chief Strategy Officer (CSO) Park Jong-wook as head of the Kid’s Land business unit are seen as part of the company’s commitment to expanding competitiveness in the content business.

For content such as movies, dramas, and entertainment shows, LG Uplus plans to broaden consumer choices through partnerships with Disney+ (which launched service last month), Netflix, YouTube, and others. Minha Choi, a researcher at Samsung Securities, evaluated, "With an exclusive IPTV contract with Disney+, LG Uplus can offer diverse content, and by strengthening kids’ content services such as Kid’s Land, it has created an opportunity to increase market share through new customer inflow in the pay-TV market."

LG Uplus’s profitability is also expected to steadily improve. This year, operating profit is expected to exceed 1 trillion KRW for the first time since its founding. According to financial information firm FnGuide, LG Uplus’s operating profit consensus (average estimate) for this year is 1.0393 trillion KRW, a 17.3% increase from last year. Next year, it is forecasted to continue double-digit growth, recording an operating profit of 1.1152 trillion KRW. Revenue, expected to grow 3.0% year-on-year to 13.8102 trillion KRW this year, is also projected to increase further to 14.5019 trillion KRW next year.

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