KT and Softbank wed in the cloud

Two years after the merger of Korea Telecom with KTF, the group claims 27% of its turnover in the "non-communication sectors", and targets 45% by 2015. "Non-communication" covers "convergence, IT service/media and global operations", which have something to do with communication but nevermind :
- 'Communication' means wired and wireless comms + call centers (KRW 18 Tn in 2010, 22 in 2015).
- 'IT service/media' stretches over 'SI/NI, cloud, solutions, contents', so typically Software as a Service (SaaS)... (evolution 2010-2015 : KRW 2 to 6 Tn).
- 'Convergence' includes 'communication-finance convergence' (KT will absorb BC Card and challenge more directly Hana SK Card or the duo SK Telecom - Hana Card), 'car' (KT Rental), 'security', 'ad/commerce' (evolution 2010-2015 : KRW 4 to 8 Tn).
- 'global operations' collects the rest : 'investment, IT and communication' (!), and probably real estate (evolution 2010-2015 : KRW 1 to 4 Tn)

In this last category, KT intends 'to expand its global markets for Smart City, Cloud, and ICT Solutions', and 'to secure more than ten new business items, such as Smart Home, Smart City and Digital Signage', or to 'develop globally competitive products and services and consider expanding its business worldwide from the launch of a project, as in the case of KT Kibot and CCC'. For your information : KT Kibot is a cute robot.

CCC means, of course, Cloud Communication Center. And that's where Korea Telecom and Softbank decided to create a 51/49 Joint Venture next September : a huge cloud data center will be created in Busan, with a back-up system in Seoul. A smart risk management move from ethnic Korean Masayoshi Son : the March 11 earthquake + tsunami followed by Fukushima meltdowns caused major business disruptions and massive energy shortages. This center will start with a 6 MW capacity (the equivalent to 700,000 PCs or 10,000 servers according to KT), and quickly reach 20 MW. A dedicated 10 GW line will secure the traffic and that's another reason why Korea's second biggest city was chosen : it's very and one of the closest to Japan (210 km or 130 miles), with all the right IT and human connections.

Yet. If Korea is spared by tsunamis and earthquakes, it is frequently attacked by North Korean hackers, and that's the reason why mobile banking and finance, a traditional strong point in the country, is not booming as fast as smartphone sales.

NFC-based Google Wallet* will have to overcome even more resistance there considering the company's image in Korea these days and the intense lobbying campaign from local netcos against its potential dominant position.


mot-bile 2011

* see "Coming soon: make your phone your wallet"

Communication-finance convergence: KT joins SKT

Seems like SK Telecom's debuts as a credit card operator (see previous posts about the SKT-Hana Bank deal) spurred the competition. Korea Telecom announced yesterday that their participation in BC Card, the national leader, would increase from 1.98 to 35.83% after purchases from Woori Bank (20%) and Shinan Bank (13.85%). KT also negociates a further 4.03% participation with Busan Bank.

Lucky Koreans MNO: they can become content majors or financial institutions just by signing checks. And they formed a common lobby with other financial institutions to promote mobile banking in Korea (SK Telecom and KT with Mastercard, Shinhan Card, Samsung Card).

"Finance-communications convergence" comes handy as MNOs need to completely revamp their business models : voice revenues keep decreasing, and the data equation went crazy.

Significantly, KT is now insisting on Wifi coverage in its smartphones advertising campaigns, and promoting uCloud for consumers also as an IPTV service (Smart TV tomorrow I guess). Remaining a leader in cloud computing is an absolute must... and it sure beats car rentals as diversification (KT are also campaigning about that peripheric service of theirs).

mot-bile 2011