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Saturday, 21 September 2013

Searching Network Provider in Korean Republic, Part II: Korea Telecom (KT)

KT Corporation also known as kt (Korean: 주식회사 케이티; formerly known as Hankook Tongshin/한국통신 or Korea Telecom) is a South Korean integrated wired/wireless telecommunication service provider. Its headquarters is located at 90 Buljeong Avenue/Buljeongno, Jeongja 3-dong 206-beonji, Seongnam Bundang-gu, Gyeonggi Province. The current CEO of KT Corp is Lee Suk-chae/이석채 (2013).

KT focuses on information & communications business, and it has the largest portion of the South Korean local telephone and high-speed Internet business. Originally founded in 1981 as a public corporation, KT actively led Korea’s transition to the information era and played a key role in promoting the growth of Korea into a globally recognized IT superpower. In 2009, KT merged with its mobile subsidiary KTF (Korea Telecom Freetel), paving the way to the convergence of fixed and mobile services. Since KT initially introduced iPhone to South Korea, it constantly seeks new business area, such as media, virtual goods, and global business with its domestic businesses experiences. The company has a well-distributed shareholder structure under which the National Pension Service (NPS) is the largest shareholder (6.81% as of December 31, 2012), but NPS holds no managerial rights over the company. Under the current shareholder structure, no controlling shareholder exists.

KT has adopted most of the corporate governance recommendations that comply with global standards, such as implementing the professional management system and operating an independent board of directors. By separating the roles of the CEO and BOD chairman, KT has effectively established an objective and independent governance system, and is constantly endeavoring to improve its corporate governance structure, as reflected in its actions such as the issuing of the “KT Corporate Governance Charter” and establishment of a Corporate Governance Committee. KT was awarded the Hall of Fame Award (2007–2008) and Grand Prize (2010) by the Corporate Governance Service (CGS) in the CGS-hosted corporate governance evaluation.

Continuous efforts have been made by KT to cultivate an environment where collaboration with partners is encouraged by pursuing measures such as attempting to prevent detrimental effects caused by lowest bid price evaluations, raising the maintenance fee payments, helping promising SMEs to build up on their competitiveness, and seeking to promote more cash payments and acquiring additional financing. In July 2010, in the spirit of promoting collaboration with SMEs, KT announced “the Three No Policy.” This in essence represents KT’s commitment to refrain from practices that hinder the growth of SMEs, such as taking action that causes them to waste their valuable resources, stealing away their technology and ideas or going up against SMEs as a competitor. KT aims to not only implement policies promoting collaboration with partners, but to also help such partners apply their sustainable business policies to other partner companies of their own. To this end, KT is encouraging partners to adopt the cash payment policy more in the partners’ dealings with their own partner companies, and is also endeavouring to have the benefits of higher supply costs shared with these second-tier partner companies as well.