KT-Hyundai Motor Group, 750 Billion KRW Equity Swap... Future Mobility Alliance (Comprehensive)

Next-Generation Communication Infrastructure and ICT Comprehensive Cooperation
Realizing MECA Including Connectivity
Enhancing Execution and Continuity Through Treasury Stock Exchange

The interior concept model of the eVTOL (electric vertical takeoff and landing aircraft) unveiled for the first time by Hyundai Motor Group at the Farnborough International Airshow held in the UK last July.

[Asia Economy Reporter Cha Min-young] KT announced on the 7th that it will expand its strategic partnership with Hyundai Motor Group to lead the future mobility market. This includes advancing vehicle technology in the connectivity sector, actively collaborating to realize MECA (Mobility service·Electrification·Connectivity·Autonomous).

KT has been promoting strategic alliances to expand the base of DIGICO (digital platform companies) in various fields such as finance and media through cooperation with Shinhan Financial Group, CJ, and others. Through its partnership with Hyundai Motor Group, KT has also solidified its position in the mobility sector.

KT and Hyundai Motor Group Exchange Shares Worth 750 Billion KRW

On the 7th, KT held a board meeting and approved a share exchange agenda to enhance the execution and continuity of future cooperation with Hyundai Motor Group. KT and Hyundai Motor Group will acquire mutual shares by exchanging approximately 750 billion KRW (7.7%) of KT treasury shares for Hyundai Motor shares worth about 445.6 billion KRW (1.04% stake) and Hyundai Mobis shares worth about 300.3 billion KRW (1.46% stake).

The exchange of treasury shares between the two parties aims to strengthen their business alliance partnership in the mid to long term and complement collaborative execution capabilities by becoming mutual shareholders. Both KT and Hyundai Motor Group have disclosed their share investment purpose as 'simple investment.'

Comprehensive Cooperation in Telecommunications and ICT... Leading the Future Mobility Market

KT and Hyundai Motor Group will first cooperate proactively to secure future autonomous driving technology. They plan to jointly develop 6G communication standards optimized for autonomous vehicles to secure next-generation breakthrough technology. Through demonstration projects and advanced joint research, they aim to develop next-generation 6G communication-based autonomous driving technology capable of processing large volumes of data at faster speeds.

KT and Hyundai Motor Group will also work on establishing satellite-based AAM (Advanced Air Mobility) communication infrastructure. KT will build essential control and communication networks for AAM operations linked with its own communication satellites, while Hyundai Motor Group will take charge of aircraft development and vertiport (vertical takeoff and landing site) construction.

In addition to long-term advanced joint research, they will expand business alliance areas based on existing core competencies. They plan to expand EV charging infrastructure by utilizing KT’s idle spaces and networks nationwide. The high accessibility is expected to help in the early establishment and spread of the charging ecosystem.

They will also consider developing new services such as streaming to meet data demand in the connected car era. KT, the leading paid broadcasting subscriber in Korea, will enhance customer experience through high-quality content acquisition, diverse big data analysis, and integration of vehicle and mobile data.

New businesses based on data and software will also be explored. They are reviewing the operation of a future technology fund for ICT technology development cooperation such as big data, and planning technological collaboration in the security communication module field essential for future business expansion. Additionally, they will conduct autonomous shuttle demonstration operations centered on KT’s future-oriented new office building. They will also cooperate diversely in ESG (environment, social, governance) areas such as joint response to RE100.

Strengthening Connectivity Cooperation to Lead the MECA Era

KT and Hyundai Motor Group have agreed to focus on advancing vehicle technology in the connectivity sector, which is the foundation for realizing MECA. Connectivity is a core element of MECA, requiring a high-quality and stable communication network to enable smooth technology operation. To this end, the global automotive industry is fiercely competing to secure related technologies through alliances and share exchanges with leading telecommunications companies.

KT possesses extensive high-quality communication infrastructure, including the largest number of Internet Data Centers (IDCs) in Korea and communication satellites that can complement shadow areas in autonomous driving and AAM communication networks. Hyundai Motor Group, as a leading global automotive company, is expected to maximize mutual synergy.

Since September 2020, KT and Hyundai Motor Group have formed a consortium to participate in the government-led Korean UAM (Urban Air Mobility) project, aiming for commercialization by 2025. They have also maintained a close cooperative relationship centered on future mobility by jointly participating in the board of the Korea Autonomous Driving Industry Association.

Meanwhile, both parties plan to establish and operate a 'Business Cooperation Committee (tentative name)' to promote continuous collaboration from a mid- to long-term perspective and to activate future new businesses and advanced research that require core competency exchange.

A Hyundai Motor Group official stated, “Through the organic combination of the capabilities held by both groups, we expect to enhance future mobility competitiveness and innovate customer experience throughout the entire lifecycle of future EV connected cars.”

A KT official said, “To expand the DIGICO business area, we have decided to pursue comprehensive cooperation with Hyundai Motor Group. Through this partnership, we will lead the future mobility market together with Hyundai Motor Group and leap forward as a global tech company through global market expansion.”