[Asia Economy Reporter Park So-yeon] KT, which declared its transformation from a telecommunications company 'Telco' to a digital platform company 'Digico,' has been strengthening its new business portfolio through large-scale strategic investments over the past two years.
According to the investment industry on the 24th, KT has made a total of 13 investments worth 3.475 trillion KRW over two years since CEO Koo took office to secure new growth engines. CEO Koo, who took office in March 2020, declared that KT's identity would shift from a traditional telecommunications company to a digital platform company.
Accordingly, CEO Koo focused investments on the transition to a platform company. Notably, investments in future growth sectors such as artificial intelligence, robotics, media content, and digital finance stood out.
The first investment was made in a robotics company. In June 2020, KT invested 50 billion KRW to acquire a 10% stake in Hyundai Robotics, the leading company in the domestic robotics market.
In October, through media subsidiaries such as KT Skylife, KT acquired Hyundai HCN (491.1 billion KRW) and Hyundai Media (29 billion KRW), becoming the number one pay-TV operator since the second half of last year. As of the first quarter of this year, KT maintains its leading position with an overwhelming market share of 35.58%, more than 10 percentage points ahead of the second-ranked company.
In March last year, KT Studio Genie was established by consolidating content and platform affiliates scattered within the KT Group through a capital of 25 billion KRW and an in-kind contribution worth 27.8 billion KRW. In September of the same year, KT Studio Genie conducted a paid-in capital increase by investing 175 billion KRW. KT Studio Genie serves as the intermediate holding company for KT Group's content and media division.
In April, KT acquired a 7.6% stake in the financial platform BankSalad for 25 billion KRW through its financial affiliates K-Bank and BC Card. While BankSalad is a representative fintech company targeting financial consumers, KT also invested in fintech groups specializing in corporate clients. In June, KT invested a total of 23.6 billion KRW in three companies of the corporate fintech specialist Webcash Group: Webcash, Bizplay, and Roome IT.
Investments in digital broadcasting and online video service businesses were also made. In April, KT acquired 100% ownership of Altimedia, a digital broadcasting software solution company, for 22 billion KRW. In May, KT spun off its online video service (OTT) platform KT Season, investing 182.6 billion KRW.
Global mergers and acquisitions were also pursued. In September, KT acquired Epsilon, a global data specialist owned by Malaysia's Kuok Group, for 170 billion KRW. The acquisition of Epsilon is considered a clear example of KT's direction as an artificial intelligence and digital platform company. KT aims to enter the global data market and cultivate mid- to long-term growth value.
Additionally, KT strengthened its identity as a digital platform by acquiring the reading platform Millie's Library for 46.4 billion KRW. This year, KT further enhanced cooperation between companies holding customer data by exchanging shares worth 437.5 billion KRW with Shinhan Bank. Considering Shinhan Bank is unlisted, KT acquired about 437.5 billion KRW (approximately 2.08%) worth of Shinhan Financial Group shares, while Shinhan Bank acquired KT shares worth 437.5 billion KRW (5.46%) previously held by NTT Docomo. In March this year, KT spun off its cloud internet data center (IDC) business, contributing in-kind assets worth 1.6 trillion KRW and 150 billion KRW in cash.
A KT official said, "KT declared its transformation from a telecommunications company 'Telco' to a digital platform company 'Digico' and is actively pursuing a strategy to lead the platform and B2B (business-to-business) industries through strategic investments in artificial intelligence, big data, and cloud, instead of competing in the stagnant telecommunications market."
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