Korea Telecom(KT) plans to review its business projects in Africa as its new CEO Hwang Chang-gyu wants to focus on bolstering the firm’s competitive edge in the domestic telecommunication business, said KT officials who are close to the matter, Thursday.
This means that the company will fold or scale down the company’s business in Rwanda and other countries on the continent, depending on the outcome of the review.
Under the leadership of outgoing Chairman Lee Suk-chae, the nation’s second-largest mobile carrier signed an agreement in March 2013 to invest $140 million in the African country to build a fourth-generation (4G) mobile network that will serve 95 percent of the country’s population.
After the signing of the agreement, the company has sought to expand business in other countries including Kenya and Uganda.
KT is now in talks with the Kenyan government to establish a joint venture to build a 4G LTE mobile broadband.
“One of the key priorities for the upcoming CEO is to recover KT’s telecommunications-related business. Synergy will be maximized only after realizing business structures that can generate profit in a stable manner regardless of market situations,” said one KT official.
“The new CEO will reexamine our African business projects from a zero-base,” he added.
Many parts of overseas projects are the legacy of the outgoing chairman who placed emphasis on two areas ― expanding the company’s overseas presence and diversifying its business portfolio ― to cut its heavy dependence on the domestic telecommunications market.
The review of the overseas projects came as many KT officials feel a sense of urgency in domestic market competition because its globalization efforts are seen to have sacrificed its competitiveness in the telecom market.
KT officials however made it clear that the review does not necessarily mean that it aims to reduce its overseas projects as new CEO Hwang understands the importance of overseas business.
Source: Korea Times