KT logo (left) and IDIS logo. (Photo = KT)
KT sells KT Powertel, a subsidiary in the radio business, to IDIS, a digital security equipment manufacturer. It is a signal of the reorganization of KT’s subsidiary company, Jae-Mo Lee, to convert KT from an existing telecommunications company to a digital platform company.
KT selected IDIS as the preferred negotiator for the sale of KT Powertel on January 11th. Afterwards, it was decided to sell the entire 44.85% stake in KT Powertel through negotiation procedures. Accordingly, IDIS announced on the 22nd that it would take over 77,711,418 of KT’s shares held by KT for 40.6 billion won.
KT Powertel is expanding its business area to the Internet of Things (IoT) such as gas detection system, driver assistance system (ADAS), and location control service, centering on digital radios. KT Powertel’s digital radio was mainly used in industrial sites. The company recorded 127 billion won in annual sales in 2010. However, as the spread of smartphones expanded and the communication method evolved from 4G to 5G, the demand for digital radios decreased. Therefore, the company’s annual sales in 2019 decreased to 66.2 billion won.
It is analyzed that KT’s sale of KT Powertel reflects Koo’s will to convert the company from existing telecommunications to a digital platform company. At a press conference held in October 2020, CEO Koo said, “We will become a digital platform company with competitiveness such as artificial intelligence (AI), big data, and cloud, escaping from conventional communications.” He also emphasized new growth through the transition to a digital platform company at the online New Year’s ceremony held on the 4th of this month.
KT plans to reorganize the group portfolio focused on growth businesses such as finance, media, and contents with the financial resources prepared from the sale of KT Powertel. KT and IDIS plan to conclude the contract by the end of March through KT Powertel shareholders’ meeting and regulatory agency approval.
Koo’s work to improve the company’s constitution is expected to continue after the sale of KT Powertel. He said at a press conference in October last year, “I have grown up as an M&A expert and know how to (grow the company through M&A),” he said.