Introduction
In the world of telecoms, where connectivity is paramount, there’s a remarkable story that stands out—one of transformation, innovation, and diversification. Among these trailblazers stands KT Corp, a telco that has not just embraced change but has also redefined the rules of the game.
The genesis of transformation: from government-owned to industry leader
KT Corp’s remarkable journey of transformation began with privatization, marking a shift from a government-owned entity to a global leader. This process unfolded between 1987 and 2002.
Initially, the Korean government opposed privatizing KT due to concerns about losing control of the telecom industry. However, after privatization, KT noted tangible growth.
- It made substantial R&D investments, diversifying into mobile communications, broadband internet, and cutting-edge technologies.
- KT embarked on international expansion, forging partnerships with global telecom firms and venturing into new markets.
Power of beyond connectivity
While connectivity remains essential, KT Corp decided to explore beyond traditional boundaries. The telco ventured into uncharted territories, diversifying its services into content media, OTT platforms, financial and payment services, Cloud, IoT, AI, and commerce-related services.
Among the 50 telcos we’ve analyzed in the Asia-Pacific region, KT Corp emerges as one of the most diversified telco in the region.
What’s truly astonishing is that the contribution from these beyond connectivity services to total revenue surged from 54.4% in H1 2022 to 59.9% in H1 2023, amounting to ~USD 6 billion (KRW 7.8 trillion) in revenue. The beyond connectivity revenue grew 13.7% YoY in H1 2023 (adding ~USD 723 million in incremental revenue)
Exhibit 1: Contribution of beyond connectivity revenue to total revenue, H1 2023 (%)
Content is king: KT Corp shines with producing original content
KT Corp’s foray into the media and entertainment sector is nothing short of spectacular. IPTV growth was fueled by a high ARPU subscriber base. Subsidiaries such as KT Studio Genie and Sky TV produced seven original dramas and five entertainment programs in the first half of the year, solidifying their presence in the media market.
What’s truly captivating is KT’s comprehensive approach, including in-house content production studios, an OTT platform, involvement in music production and distribution, etc. In an era where content is king, the telco is dedicated to produce engaging content for the Korean and international audience.
Exhibit 2: KT Corp content and media value chain
In our analysis of 50 telcos, KT Corp leads with the highest revenue contribution from content and media. While determining the exact figures may be challenging due to the diverse subsidiaries, our analysis reveals that content and media accounted for over 16% of their total revenues in H1 2023, surpassing others in the region.
KT Cloud and financial services business
KT Cloud, established just one year ago, is now South Korea’s leading DX (Digital Transformation) company with a valuation of USD 3.2 billion (KRW 4 trillion).
In the realm of financial services, BC Card, a leading South Korean financial services company under the KT Corp umbrella, recorded a revenue of ~USD 839.4 million (KRW 1,049.2 billion) in Q2 2023
The KT Corp ecosystem
What also sets KT Corp apart is the extensive list of KT’s subsidiaries. According to KT’s document as of September 30, 2021, they had well over 65 subsidiaries. What’s even more compelling is that a significant portion of these subsidiaries was engaged in beyond connectivity services.
KT has successfully created an ecosystem where each component complements the other. This ecosystem is a testament to its vision of holistic growth. From a government-owned entity to a global telecommunications powerhouse. KT Corp’s journey serves as a beacon of inspiration for telcos worldwide.
Read the full article: Top APAC telcos to ace Beyond Connectivity revenues in H1 2023
Explore our content on Telecoms