KT has announced a plan to reorganize its management system, calling for spinning off future potential areas - media contents, satellite services, and real estate. 

The telecom provider’s announcement of the reorganization comes almost 10 years after it was privatized and three years after it integrated its fixed line and mobile telecom businesses. 

Public attention is being paid to the effect of the massive reorganization on KT’s stock price movements. Stock analysts said the reorganization would have the effect of enhancing its efficiency and predicted that it would have a positive effect on its stock price. 

KT filed with the stock exchange its intentions to spin off parts of the company into three separate entities of media contents, satellite services, and real estate businesses. 

The reorganization is construed as part of KT’s strategy to transform the telecom provider into a global media company. 

The reorganization involves the transfer of positions by 40 executives and about 20,000 staff. The existing individual customer division responsible for mobile phones and other wired service products and the existing home customer division charged with broadband services and fixed line service products will be merged before the reorganizing of management into the telecom & convergence (T&C) division and the customer division.  

The new T&C division, responsible for the developing of fixed line and mobile service products and strategies, will be headed by Pyo Hyun-myung, now president of the individual customer division, while Seo Yu-yeol, now president of the home customer division, will take the helm at the new Customer Division responsible for product sales, customer reception, and customer management. KT’s ethics management office will be expanded into the KT Group’s Ethics Management Office, to be headed by President  Jung Sung-bok, who was retained. 

KT’s existing 42 regional organizations, including fixed, and mobile, and incorporated bodies, will be integrated into 11 regional headquarters, to be placed under the umbrella of the new customer division, while KT will offer services to customers in an integrated fashion.

The integrating of telecom-related products and sales is likely to reduce that portion of the telecom business. A KT official said KT’s fixed line division and mobile business sectors will have a full-fledged chemistry after KT, a fixed line telecom provider, is merged with its mobile telecom subsidiary, KTF, and the integrating of new product planning and sales will have synergetic effects. 

KT will set up three different entities specializing in media content, satellite services, and real estate.

The official said media content, satellite services and real estate are considered to have a future potential for growth, but they have failed to have a competitive edge since they are placed under the direct control of KT, a telecom provider, which is normally under strict restraints from the government, and their spins-off from KT will have self-viability and self-sufficiency effects down the road.