Korea Telecom’s latest move in its country’s endless game of broadband one-upmanship is to announce plans to invest KRW4.5 trillion ($4.38bn) in its ‘Giga Internet’.
This will aim to make gigabit-plus access a near-universal service by combining fixed fiber and wireless LTE-Advanced technologies, according to local media reports. Riding on the network will be enhanced services in areas like over-the-top HDTV, smart energy and personalized health applications.
However, analysts were lukewarm about the plan, which is the centrepiece of a heavy investment strategy outlined by KT chairman Hwang Chang-gyu to chase arch-rival SKT and to improve recent poor performance in some core businesses and in overall management. His recovery plan sits on five foundations ‘ gigabit internet, media content, energy, security and healthcare.
KT backers have high hopes of the new chairman, who is a global name in semiconductors and the architect of Samsung’s leadership in memory. He coined ‘Hwang’s Law’, which states that flash-type transistor memory doubles every year. As reported by Korea Times, he said of his new role: “I expect KT’s telecommunications capability in terms of speed and capacity will advance, outliving my own Hwang’s Law.”
However, analysts were disappointed that there weren’t more solid details and new ideas in his presentation, and that many of the new strategies did not promise short term profits. Choi Nam-kon, an analyst with Tong Yang Securities, said: “Both Hwang and the company need more time to come up with results to speak of. He talked about new Internet technologies and the internet of things (IoT). But both are nothing new and success is not yet certain.”
And other analysts questioned whether even the giga internet would enable KT to escape the country’s price war in broadband services, especially with SKT already active in many of the same areas.
Hwang said the company plans to restructure its operations to improve its capabilities in five areas, and also to address the sectors where it lacks competitiveness. Just after he took over in January, he announced that KT would reduce its executive workforce by up to 27% following a recent steep drop in profits.