Korea Telecom
Encyclopedia
KT Corporation is a South Korea
South Korea
The Republic of Korea , , is a sovereign state in East Asia, located on the southern portion of the Korean Peninsula. It is neighbored by the People's Republic of China to the west, Japan to the east, North Korea to the north, and the East China Sea and Republic of China to the south...

n integrated wired/wireless telecommunication
Telecommunication
Telecommunication is the transmission of information over significant distances to communicate. In earlier times, telecommunications involved the use of visual signals, such as beacons, smoke signals, semaphore telegraphs, signal flags, and optical heliographs, or audio messages via coded...

 service provider. KT has an information & communications business, and has the largest portion of the South Korean local telephone
Telephone
The telephone , colloquially referred to as a phone, is a telecommunications device that transmits and receives sounds, usually the human voice. Telephones are a point-to-point communication system whose most basic function is to allow two people separated by large distances to talk to each other...

 and high-speed Internet
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...

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, paving the way to the convergence of fixed and mobile services. KT seeks to provide its customers with advanced wired and wireless services via ubiquitous digital devices. Existing as a telecom operator under Korea’s Telecommunications Business Act, KT is subject to the monopoly regulations and Fair Trade Act, and thus, cannot in any way misuse the authority it holds as the dominant player in the Korean telecommunications market. The company has a well-distributed shareholder structure under which the National Pension Service(NPS) is the largest shareholder(8.26%), but NPS holds no managerial rights over the company. Under the current shareholder structure, no controlling shareholder exists.

Business Philosophy & Direction

KT has four basic business philosophies, which is to become a company that can think outside the box (innovative management), realize customers’ dreams (future-oriented management), read customers’ thoughts (communication-based management) and excite customers(offering services that are truly moving).

Vision

Global ICT Convergence Leader – This business vision of KT portrays the company’s commitment to make a huge leap forward based on the convergence of innovative technology. KT has a “3.3.7 Plan,” which is to raise its revenue by 3 trillion won to 27 trillion won, the KT Group operating profit margin by 3%p to 11.4% and its FMC* subscriber count by 7-folds to 2.1 million by the year 2012. KT, which plays a central role in promoting the growth of the KT Group as a whole, plans to use its convergence business to further expand its business, thereby achieving a revenue of 22 trillion won and an operating profit of 2.6 trillion won by 2012.

Credit Rating

S&P Rating “A” (Nov.26, 2010)
As of the end of December 2010, KT received an “A” rating from the global credit rating agency S&P. S&P’s “A” rating is given to companies evaluated as being of “Investment Grade” status, and applies to the 6 highest levels among the 23 rating categories at S&P.

Before Privatization

  • September 28, 1885: Telephone facilities set up between the cities Hansung and Incheon
  • December 1981: KTA established
  • 1984: 10th in the world to develop the electronic switch TDX-1
  • 1987: Completed nationwide installation of phone automation service
  • 1991: Company renamed Korea Telecom
  • 1993: Total of approx. 20 million telephone lines installed (only 4.5 million existed in 1982), thereby establishing the basis for advancement to the information society
  • 1995: Mugunghwa Satellite No.1 launched
  • 1996: Mugunghwa Satellite No.2 launched
  • 1996: PCS and CT-2 license acquired. KT Freetel (mobile business) founded.
  • 1997:Status changed from organization which has 50%+ state funding to one with a state funding of smaller scale (below 50%)
  • October 1, 1997: The new Public Corporation Business Structure Improvement & Privatization Act applied to KT (no longer exempted owing to the change in company status)
  • 1998: Headquarters relocated from Chongro-gu, Seoul to Bundang-gu, Gyeonggi Province
  • December 1998: Newly listed on stock exchange
  • 1999: Mugunghwa Satellite No.3 launched
  • June 2000: Managerial rights of Hansol M.com acquired
  • December 2000: IMT-2000 license acquired
  • Apruk 2001: Caller ID(CID) service launched

After Privatization

  • May 2001: Plans for privatization announced. Celebrated 20th anniversary and changed CI from Korea Telecom to KT. KT’s telephone offices restructured into regional branch offices. “Let’s” launched as the new company slogan.
  • 2002: Privatization of company completed.
  • 2005: According to the Fair Trade Commission data, KT as a corporate group that holds 12 subsidiaries and total assets of 29.315 trillion won, ranked 8th among Korea’s conglomerates.
  • December 28, 2005: Launched inter-Korean telecommunication services and opened KT branch office in North Korea’s Gaesung Industrial Complex
  • January 2009: Six days after inauguration as the new Chairman of KT, Suk-Chae Lee announced plans for KT-KTF merger at press conference
  • March 2009: Received conditional approval from Korea Communications Commission (KCC) on KT-KTF merger
  • April 2009: QOOK, new brand for home services, launched. The existing broadband internet service Megapass renamed as QOOK Internet, and Mega TV renamed as QOOK TV.

After KT-KTF Merger

  • June 1, 2009: KT and its mobile subsidiary KTF merged to form a new unified KT
  • July 2009: Previous company slogan “All New” replaced with “Olleh Management,”and “Olleh KT” officially launched as the new CI
  • November 2009: Launched KT’s FMC service, QOOK & SHOW, and forecasted advent of the smartphone era
  • November 2009: Became first local carrier to launch Apple’s iPhone in Korean market
  • December 2009: Launched the first 3W (Wi-Fi, WiBro, WCDMA) phone “Show Omnia” in Korean market
  • June 2010: Launched KT’s cloud storage service, “Ucloud” service
  • August 2010: Company’s FMC service relaunched under new brand name “Olleh” in alignment with company slogan
  • August 31, 2010: KT included as Dow Jones Sustainability World Index company
  • September 10, 2010: Launched Apple’s iPhone 4 in Korean market and unlimited 3G data plan
  • November 11-12, 2010: As the official telecommunications service provider for the G20 Seoul Summit provided the heads of states with powerful IT communication services.
  • January 25, 2011: KT’s brand name for its fixed line services “QOOK” and wireless services“SHOW” consolidated and renamed under the brand name “Olleh”. Renamed as “olleh HOME” and “olleh MOBILE.”
  • February 10, 2011: Acquired 20.05% of BC Card shares, emerging as the 2nd largest shareholder.

Corporate Governance

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.

Board of Directors

KT’s Board of Directors(BOD) is composed of a total of 11 directors, three of whom are inside directors and eight of whom are outside directors (as of Mar.2011). Outside directors are nominated by the Outside Director Nomination Committee, composed of all the existing outside directors and one inside director. The Committee’s aim is to find candidates with the required professional expertise and business leadership skills. Outside directors serve a maximum term of three years. The BOD chairman is selected from among the outside directors and serves for a term of one year. The BOD consists of five standing sub-committees and two ad-hoc sub-committees. If required, additional sub-committees may be set up. Currently the three inside directors are Suk-Chae Lee (KT Chairman & CEO), Hyun-Myung Pyo and Sang-Hoon Lee, and the eight outside directors are Eung-Han Kim(BOD Chairman), Chun-Ho Lee[14], Jeung-Soo Huh, Jong-Hwan Song, Hae-Bang Jung, Chan-Jin Lee, Hyun-Rak Lee, and Byung-Won Park.

CI

Brand Color
Red & Black Story. kt had its brand color changed from the previous blue to the red and black color combination. The red color is meant to signify passion, innovation, youth and feelings of warmth and caring toward customers, while black is meant to signify legitimacy, collectedness and trust. The dual color combination is used in the new kt brand to imply a new story of growth and development for the company, one in which kt supposedly embarks on a journey to achieve key values and undergo positive changes.

Brand Image

The change in the lettering of “KT” to lowercase letters and incorporation of the image of a fluttering flag supposedly represent kt’s resolve to break away from its somewhat rigid corporate image and to become a more customer-oriented, friendly company with a warm, inviting image. While the flag is usually used as an identifier and a data symbol, in this case, it is meant to portray kt’s commitment to become “a global company venturing wide into the world with its flag flying high.”

Brand Identity (BI)
“olleh” is the integrated brand name used to collectively represent all the kt services, including the fixed line as well as the fixed and mobile convergence products and services. It is allegedly an embodiment of KT’s business vision and philosophy, which is to enable customers to use communication services anytime anywhere based on an optimal network infrastructure, and to ultimately enrich customers’ lives by offering them more innovative products and services.

Leader of the Smartphone/Pad Computer Market

Through the active promotion of smartphones and pad computers in the Korean consumer market, kt has been leading a new trend in the mobile industry, and has been promoting the “smart device revolution” across society in general. kt was the first operator in Korea to introduce the iPhone, the phone that triggered the global smartphone fever, into the Korean market in November 2009. Then, within just four months since the launch of iPhone 4 in September 2010, kt successfully recorded a sales of over 1 million iPhones, effectively leading the way into the smartphone era. This explosive demand for iPhone 4 was all owing to the high customer satisfaction of the existing iPhone 3GS users, the wide range of application offerings which added up to be over 300 thousand, iPhone’s scalability based on continuous upgrades, kt’s competitive tariff plans through which customers are offered 3G+ unlimited WiFi data services, and the favorable views held towards the 50 thousand kt Olleh WiFi zones. With the launch of the iPad thereafter in November 2010, kt further promoted the large scale consumption of contents via advanced media devices and paved the way to innovative changes in consumers’ digital lifestyle.

Smart Home Service

In the first half of 2011, kt launched the “Kibot,” a robot specially developed for the education and entertainment of children, which has value-added features, such as more advanced versions of functionalities found on the existing video and Internet phones. In the second half of the year, kt plans to expand beyond voice services by actively pursuing Smart Home services, centering around a rich array of contents.

uCloud Service

In June 2010, kt launched the uCloud service, a service that offers users access to a wide range of IT resources (i.e. infrastructure, platform, software), out of which users can selectively use and pay for just the resources they need. The uCloud service is an online storage service available via both fixed line and wireless networks. The attractiveness lies in that the service can be accessed anywhere via portable devices, such as tablet PCs and laptops, enabling users to download large data from where ever they are. “uCloud” is the name coined for kt’s cloud service, with the “u” standing for “ubiquitous” and simultaneously referring to customers in the second person as “you.”

Mobile TV

kt is also seeking to expand the media service, mostly viewed through the TV in the past, so that the service can be enjoyed anytime anywhere on various types of devices. As part of these efforts, kt launched the Mobile TV app service, which enables customers to view live IPTV shows and VOD contents on their smartphones and tablet PCs. Using Mobile TV as the starting point, kt is now making multimedia services available to customers via PCs and 3rd party devices and creating a new culture for N-screen media services by offering connections to a wide range of contents such as e-books and online games.

Mutual Growth with Partners

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 endeavoring to have the benefits of higher supply costs shared with these second-tier partner companies as well.

Smart Working

As part of its initiative to establish kt as a great workplace, kt played a pioneering role in the Korean market by adopting the Smart Working system, a system that allows the employees the flexibility to choose their physical workplace. By adopting this innovative way of doing business, the company aims to help its female employees who struggle to maintain a balance between their childcare and work responsibilities. Working moms who apply for Smart Working are given the flexibility of working from their homes. Male employees can also sign up for Smart Working, and work at the KT office nearest to their home. As a means of further promoting this initiative, in September 2010 kt opened the Smart Working Center in its Bundang office, equipping the space with high definition video conference facilities and personal work spaces. As of 2011, there are a total of nine Smart Working Centers being operated. kt plans to increase this number to 35 by the year 2013.

KT-Sponsored Sports Teams

  • Busan KT Sonicboom Basketball Team
  • KT Rolster
  • KT Shooting Team (Korean National Shooting Team)
  • KT Hockey Team
  • KT Golf Team
  • Main Sponsor of National Football

IT Supporters

The "IT Supporters" launched in 2007, is kt’s employee social volunteer service group established to transfer IT knowledge and provide a wide range of people with the benefits of IT services. IT Supporters, which offer their IT expertise and knowledge on a pro bono basis, is regarded as an exemplary case that created a huge paradigm shift in the area of corporate social volunteer services. The group, composed of 23 teams spread across Korea and 200 kt employees, carry out activities aimed at bridging the information technology gap that exists in society and enhancing the quality of life for citizens by promoting the benefits of advanced IT services.

KT Volunteer Corps of Love

KT Volunteer Corps of Love was founded in March 2001 to promote greater efficiency by integrating KT employees' volunteer activities, which had been conducted individually, into a systematic, companywide movement. The Corps consists of 700 teams with roughly 31,000 employees donating their time to various causes, such as supporting local childcare centers, the underprivileged, providing disaster relief, extending a helping hand to the farming and fishing communities, children’s education and scholarship programs.

Volunteer Fund

kt’s Volunteer Fund is a fund created in 2003 by the company and employees to support the corporate social responsibility programs, and consists of the employee donations and a matching grant provided by the company. The company contributes a grant that corresponds to the amount collected by the employees and this is used to fund the various volunteer activities. In 2010, thanks to the voluntary participation of 73% of the employees, a fund amounting to 1.74 billion won was created. This is being used to support the numerous volunteer work being conducted across the country by the volunteer teams. The matching grant made by the company is used to fund kt’s mid-to-long term volunteer programs, such as the supporting of hearing-impaired children and the local childcare centers. The Fund is used in accordance with the operation regulations established by the Volunteer Fund Operation Committee, a committee composed of members from both the labor and management side. To ensure the transparent management of the fund, the fund usage details and supporting documents have to be registered on the KT Volunteer Corps of Love website.

Support for Hearing Impaired Children

Since 2003, KT has been carrying out a project to help hearing-impaired children and teenagers from low income families recover their hearing. As of the end of 2010, KT has funded artificial cochlea implants and rehabilitation treatment to 126 children, while 172 have been provided with digital hearing aids. In 2010, the support was further expanded to include the funding of auditory brainstem implants.

olleh Square

Olleh Square, located on the 1st floor of the kt Kwanghwamun Office, is an multi-functional IT exhibition hall spanning across an area of 3,300㎡set up to provide customers with a wide range of pleasurable experiences. The former KT Art Hall was renovated and rebuilt into the Olleh Square in May 2010, after which the space was reopened under the name “Olleh Square.” Olleh Square is now recognized as Korea’s leading cultural space where visitors can come to relax and enjoy a culture respite. Visitors can stop by to try out recently released IT devices and services for free, leisurely hang out at the café or enjoy concerts held in the Dream Hall. The space has been used to host various events, such as the 62nd Armed Forces Day celebration and the iPhone 4 and iPad launching ceremonies. It is also a popular spot visited during field trips for those interested in viewing cutting edge IT technology. Since the opening of the Olleh Square on May 24, 2010, the total cumulative number of visitors as of the end of 2010 is 527, 333.

KT Chamber Hall

In May 2009, the KT Chamber Hall was opened inside the KT Mokdong ICC in Seoul after some remodeling, as part of the company’s cultural program pursued to promote more active communication with customers. As the name suggests, the venue is designed to stage chamber music performances.

Responding to Climate Changes

KT seeks to achieve a 20% reduction in CO2 emissions by 2013 (compared to 2007 emission level) through conservation of the existing energy sources, using alternative eco-friendly energy, improving the communication and IT infrastructure and adopting green technology in the work environment.

Real Time Monitoring of Energy Consumption

During the course of implementing the government-supported new product development initiatives, kt developed a real time energy consumption monitoring device to efficiently micro manage the energy usage in buildings. This system also supports features such as target level management, measurement, reporting and verification of the energy consumption and CO2 emissions. The system is currently being applied at kt’s office buildings that particularly consume large amounts of energy, such as KT Mokdong ICC(Internet Computing Center).

Smart Grid Business Investment

Kt is currently involved in the Jeju Smart Place test bed project led by Korea’s Ministry of Knowledge Economy(MKE) which is being pursued for the purpose of testing and developing Smart Grid business models. The project is being conducted on six thousand households in Jeju island’s Gujwa-eup area, and is scheduled to be conducted over a period of 42 months from May 2009 to May 2013. The aim of the project is to provide an integrated energy management service and achieve the means for efficient energy usage by adopting renewable energy sources and energy storage devices. The project is being executed by the kt Consortium, which is composed of kt and 14 other companies, including Samsung SDI, Hyosung, Samsung Electronics, and 4 contractors, with the focus being to conduct demonstration tests on electric power-communication convergence business models.
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