KT has secured their next generation investment resources as they earned 904 million USD by selling KT Rental. It is expected that ‘Hwang Chang-gyu’s aggressive management’ will kick into high gear at last.

On March 12th, KT selected the Lotte group as their priority bidder for KT Rental, and made a 100% stock sales contract—58% of KT stocks holdings and 42% of other investors ownership—with Hotel Lotte. The sale price was 904 million USD. KT is to utilize the funds from this sale for the enhancement of financial soundness and ICT capacity.

Last year, KT achieved sales growth in the wireless business, and the media·contents and finance·rental sectors. However, due to the decrease in the number of subscribers and call volume, sales in the cable field dropped 7.2% compared with the previous year. Therefore, they are planning to focus on increasing the Average Revenue Per User(ARPU) for high-speed Internet, this year.

KT had announced their plan to increase capital spending by approximately 177 million USD more than last year (2.2 billion USD) at the annual results announcement earlier this year.

Newly secured funds are expected to be invested mainly in the cable sector such as the Giga Internet (What's GiGAtopia envisioned by Chairman Chang-gyu Hwang of KT?, KT launched GiGA Internet, Korea's first nationwide gigabit Internet service). Investment expansion is expected also for the Five Future Fusion Enterprises including energy and health care. In the wireless sector, investments on the installation of 2.1㎓ base stations for 3-band LTE-A  (LTE/LTE-A Commercialization in Korea)nationwide network expansion are to be made.

A business official said, “Secured funds are to be primarily invested in securing the soundness of financial statements, and also invested in Giga-infrastructure construction, 5G business, etc. Since KT has claimed being the pioneer of 5G (Korean big 3, getting ready for 5G (1): KT), 5G investments are especially to be made in earnest starting from this year.”

Whether KT will promote additional restructuring such as the disposal of affiliates is a hot issue. Chairman Hwang has emphasized the need for the disposal of noncommunications affiliates many times ever since his inauguration.

It is chairman Hwang’s management keynote to concentrate on the communication business, which is their regular trade, and grow to become a global enterprise. Although they have sold some small and mid-sized affiliates such as Sidus FHN, KTOIC, etc. last year, there are still 49 affiliates(confirmed on March 4th).

KT Capital, which is evaluated as the essence company and has an estimated sales price of 221 million USD also has its priority bidder selection ahead. Internal reorganization, including the merger of KT media hub, is in promotion, as well.

Omnidirectional work is in process for their take off as a ‘communication-centered’ company, not a recklessly diversified noncommunications business. As KT has succeeded in reversing atmosphere in the past year, they are expecting visible outcome this year.

A KT official explained, “We had concentrated on the noncommunications business for awhile, but in fact, we didn’t accomplish much, so we began to concentrate once more on the communication business, which is our core business. The results for the first quarter will come out soon, and this year, we will be able to show progress with visible figures.”

Meanwhile, Hotel Lotte, which has taken over KT Rental, is to undergo the Fair Trade Commission review and complete their takeover until May. KT Rental’s auto rental and car share businesses are expected to make high synergy with Lotte’s distribution network of more than 12000 distributors.