Oct. 14, 2009 (The Korea Times) -- By Kim Yoo-chul
Staff Reporter
KT Corp. said it will introduce fixed mobile convergence (FMC) products for households.
The FMC service combines landline, Internet and mobile communications.
Subscribers can make calls via the Internet in wireless-fidelity (WiFi)-connected areas at a cheaper price, while they can get mobile services via a handset outside WiFi-designated areas.
According to KT officials, FMC subscribers could save 88 percent in data charges and 34.8 percent in voice calls on a monthly basis.
Although telecom service companies are expected to be hit by a decline in profits from their voice call services in the short term, the converged products will help them secure long-term subscribers and boost the wireless Internet business, analysts and company officials say.
Attracted by the merits, SK and LG are planning to introduce similar services soon.
Related to this, KT Chairman Lee Suk-chae has calmed possible worries over a setback in profits stemming from aggressive pushes for its FMC products for households, citing the huge growth potential in the FMC segment.
"KT may suffer from a decline in profits caused by its new strategy for FMC-related businesses. But we could offset this as KT is set to grow the volume of the products in the telecom market," Lee said during a press conference held at the company's headquarters in Seoul, Wednesday.
He was speaking on the sidelines of a launching event for KT's first-ever FMC products for general consumers.
"I can say the successful launching of such products comes from the merger with KTF."
"KT will put more focus on the FMC-related businesses to maintain sustainability amid the telecom industry's convergence moves. The new segment matches KT's growth strategy and next business model," the chairman said.
Lee has expected the data telephony market to rapidly boom up, helping the company increase the number of subscribers in FMC services and seeks additional profits from data downloading business such as App Store.
KT plans to introduce two sets of FMC-only handsets from Oct. 20.
As for a back-up plan to put the service on the right track, KT is moving to open its Wi-Fi zone to other companies, but not for free.
Asked about another new growth engine that KT was seeking, Lee said nurturing its financial services is one of the options.
"A combination of financial services and telecommunication services would create a synergy to strengthen our core values," he said.
KT's financial business KT Capital is looking at buying a majority stake in BC Card.
The company is exploring a number of options to spur its growth in the financial services industry and could, alternatively, start its own business.
Rival SK Telecom (NYSE:SKM) is in talks with Hana Financial Group (OOTC:HNFGF) to buy its credit card business.
On a question over the timing of Apple's (NASDAQ:AAPL) iPhone debut in the South Korean market, Lee said KT and Apple have been in detailed talks for an early introduction.
