BARCELONA, Spain ― KT chairman Lee Suk-chae on Tuesday stressed the need for his company to transform from a telecommunications firm into an information communications technology company to deal with the trading of broadband-based virtual goods.

“There is no future if we only cling to network traffic fees. We must create a global common market for distribution of virtual goods,” he said in a keynote session at the Mobile World Congress.

“KT is directly entering the virtual goods market and transforming from a traditional telecom to a global information and communications technology convergence corporation.”

Local telecoms have been striving to go beyond their network-operating businesses in recent years as the market has already become saturated with most people already owning a handset running on the networks of the nation’s three mobile carriers ― SK Telecom, KT and LG Uplus.

Stating that the importance and value of traditional communication business would diminish further in the broadband era, virtual goods projects that sell for a fee in the marketplace like digital content, applications, IT solutions, e-learning and e-health are becoming more important, according to Lee.

“Telecoms must now become virtual goods manufacturers or virtual goods store distributors like Apple’s App Store,” he said.

He also said in a separate press conference ahead of the keynote speech on Tuesday that this was not a matter that could be ironed out by complaining about the stiff competition coming from numerous businesses such as mobile messenger Kakao Talk.

“We have to think about how we can produce profit and innovation, and create value in cyberspace other than by using telecom services,” said Lee.

“KT’s struggles today will be the exactly the future of what global telecoms will be faced with,” he said. “Telecoms need to transform themselves into broadband-based virtual goods players, go beyond local markets and collaborate to create a global common market.”

By Cho Ji-hyun, Korea Herald correspondent
(sharon@heraldcorp.com)