Woongjin Capital and KT Corp. agreed to form a private equity fund worth more than 1 trillion won ($830,000) as early as October to invest in domestic smartphone business, the companies said.

KT, the country’s exclusive seller of Apple’s iPhone, and Woongjin Capital signed an agreement Wednesday on the strategic alliance.

As an initial step, Woongjin will establish a fund dubbed “Mobile Korea Renaissance Fund,” which seeks to make investments in smartphone hardware and software development as well as new technologies.

KT will offer professional technology consultations involving how to make investments based on its accumulated experience in the fixed-line and wireless markets.

The telecom service provider is also looking to sign cooperation agreements with other information and telecommunication firms located overseas, which would be willing to contribute in fund management.

“This move will ultimately create new values and synergy for it is a joint effort carried out by two different firms which are equipped with large infrastructure and consumer figures,” said KT chairman Lee Suk-chae.

The number of smartphone users for KT has jumped to 1.1 million in June, up from 28,000 in June of last year. It introduced Apple’s iPhones for the first time in November last year.

Since then, the company has built 27,000 wireless Internet zones across the nation as of July 14 and it is planning to provide the Wi-Fi roaming service in 98 different countries starting this month.

By Cho Ji-hyun(sharon@heraldcorp.com)