KT Skylife Explores Entry into Budget Phone Market
Increased Tension with Existing Budget Phone Operator Emobile
KT CEO Koo Hyun-mo Mentions "Group Restructuring"
Independent Survival Among Affiliates to Secure Profitability Expected to Intensify
[Asia Economy Reporter Koo Chae-eun] KT Skylife (hereinafter Skylife) has entered the MVNO (Mobile Virtual Network Operator) market, starting an "uncomfortable coexistence" with its group affiliate KT M Mobile (hereinafter M Mobile). As the two companies have to compete in the MVNO market, some of M Mobile's personnel supporting Skylife's operations have caused tensions between them.
According to industry sources on the 5th, Skylife formed a task force (TF) team to enter the MVNO business and requested operational support from M Mobile, with M Mobile personnel participating in the support. M Mobile is a specialized MVNO company with about 700,000 subscribers, holding a 10% market share. As M Mobile has been responsible for the MVNO business within the KT Group, Skylife's entry into the MVNO market is far from welcome, and the atmosphere has become unsettled with rumors such as "some employees have moved" during the process of supporting Skylife's operations.
Regarding this, Skylife explained, "There was no formal personnel transfer; it was merely operational support received from M Mobile for the MVNO business." The official emphasized that they are "planning to enter the business in the form of bundled products targeting satellite broadcast subscribers" and that they are not in a competitive relationship with M Mobile.
As of last year, M Mobile had 734,000 MVNO subscribers (9.1% market share), slightly behind LG HelloVision (762,000 subscribers, 9.40%) but ahead of SK Telink (696,000 subscribers, 8.6%). It ranks third among all MVNO providers and second among mobile carriers.
Skylife's entry into the MVNO market, having been a satellite business operator, is interpreted as a choice to secure profitability. Skylife's paid broadcasting market share declined from about 10.53% in the first half of 2017 to 10.19% in the first half of 2018, 9.87% in the first half of last year, and 9.56% in the second half. With the paid broadcasting market being reorganized around Internet TV (IPTV), there are limitations to relying solely on satellite broadcasting, leading to the industry's interpretation that Skylife is entering the MVNO market.
This controversy is also seen as a reflection of the situation where the 42 KT affiliates are "each surviving on their own" under the leadership of KT CEO Koo Hyun-mo. In March, at a meeting with major domestic securities analysts, CEO Koo mentioned that he would "restructure the group companies" to boost stock prices and secure profitability.
Meanwhile, KT holds a 49.99% stake in KT Skylife, and a 100% stake in KT M Mobile.
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