Merged LGT looks outside telecom for growth

LG Telecom will seek growth outside the telecom sector to become the "eye of the storm" within the market, the company`s new CEO Lee Sang-chul said yesterday.

Lee, the first to lead LG Telecom following the absorption of LG Dacom and LG Powercom on Friday, said that the telecom industry is at a critical time and that the company will seek new business models to fuel future growth.

"The three telecom firms spend more than 8 trillion won ($7 billion) a year as subsidies, focusing solely on such things will lead to the downfall of all," Lee said.

"Moving beyond the boundaries is critical. Now is the time to change the basic mindset about the telecom sector."

As part of its plans, Lee said that the company would launch 20 projects that go beyond the industry`s boundaries within the year, and transform itself into a "personal value provider" that provides `smart services` suited to each and every subscriber.



"In a desert a glass of water has incredible value, but when it`s raining giving someone a glass of cold water is meaningless," Lee said. Lee said that the 20 projects will be reviewed and launched in time.

"One thing can`t be used to satisfy all the consumers. In the end, true value is in providing the means for the consumers to create value for themselves."

Concerning the lead KT Corp. and SK Telecom have over LGT in industrial convergence Lee said that the company may in fact have an edge over the rivals and that the company has the means to make the necessary investments. According to Lee the merged LGT`s debt ratio stands at about 80 percent.

He added that adopting an open structure that brings in other parties that have components necessary for the new business such as content will allow new businesses to be started without heavy investment.

"In order to truly go outside the telecom industry, one must abandon the old self. In this we have an edge, since we do not have much to discard," Lee said. He added that in seeking such new business models, the company will collaborate not only with LG Group affiliates but also with their rivals as such methods will be beneficial to all concerned and lead to rediscovering Korea`s "lost IT kingdom."

"The most important thing in convergence is the business model. If a convergent service is used simply as a means for attracting subscribers, it becomes meaningless. Applying a new business model in creating a new industry, this is what I think of as meeting of different industries."

(cheesuk@heraldm.com)



By Choi He-suk