KT CEO Koo Hyun-mo: "Find the Best Business Partners in Each Field"

KT Forms Strategic Alliance with Hyundai Motor
Stock Swap with Hyundai Motor Following Shinhan and CJ

[Asia Economy Reporter Lim Hye-seon] KT CEO Koo Hyun-mo (photo) is strengthening strategic partnerships to leap forward as a digital platform company (Digico). The strategy is to expand KT's lacking non-telecom business areas by forming alliances through equity swaps with industry leaders possessing unparalleled competitiveness. Kim Hoe-jae, a researcher at Daishin Securities, analyzed, "Collaboration between KT, which leads 5th generation (5G) mobile communications, and the global top-tier Hyundai Motor Group will greatly contribute to the activation of autonomous driving and urban air mobility (UAM) markets."

On the 7th, KT announced that it will strengthen future mobility business cooperation by exchanging shares worth 750 billion KRW with Hyundai Motor Group. This is the fourth 'big deal' this year following Shinhan Bank, CJ ENM, and Megazone Cloud. As a result, KT's major shareholders are the National Pension Service with 10.87%, Hyundai Motor Group with 7.79% (Hyundai Motor 4.69%, Hyundai Mobis 3.1%), and Shinhan Bank with 5.58%, among others.

Building alliances through equity swaps and investments is an action included in the roadmap that CEO Koo ordered the management team to follow. CEO Koo's philosophy is that the relationship should be established in a way that provides the best support for mutual growth through equity swaps, rather than the previously loose forms of partnerships. KT explained, "None of the companies we have partnered with have formed exclusive relationships with KT," adding, "KT can also maintain various business partnerships." KT's plan is to instill the perception that KT is the strategic partner for the future.

The first area to form an alliance was finance. In January, KT exchanged shares worth 437.5 billion KRW with Shinhan Financial Group. Shinhan Bank secured a 5.48% stake in KT, and KT acquired a 2.08% stake in Shinhan Financial Group, the parent company, on behalf of the unlisted Shinhan Bank. KT and Shinhan Financial Group have embarked on joint projects focusing on future finance digital transformation (DX) and platform new businesses.

CEO Koo's next target was the cloud sector. KT, aiming to grow a digital transformation specialized company with sales of 2 trillion KRW within four years, invested 130 billion KRW in Megazone Cloud, the largest cloud management service provider (MSP) in Korea, becoming the second-largest shareholder in February. Subsequently, KT split its cloud and internet data center (IDC) business units to launch an independent corporation, 'KT Cloud.'

To strengthen competitiveness in the content sector, KT Studio Genie attracted an investment of 100 billion KRW from CJ ENM, and in July, decided to merge its online video service (OTT) Season with CJ ENM's TVING. KT Studio Genie will acquire shares in the merged entity, securing the position of the third-largest shareholder.

CEO Koo is broadening the portfolio for the 'KT of 20 years later.' Since his inauguration in 2020, he has planned to expand the business areas centered on wired and wireless communications into digital transformation businesses focused on artificial intelligence (AI), big data, and cloud. To this end, media content, finance, commerce, healthcare, real estate, robotics, and cloud are being nurtured as core growth businesses. Consequently, KT's non-telecom business ratio has increased from 3% immediately after privatization in 2002 to 41% currently.

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