KTF seeks to bolster its global business

I recently read an article announcing KTF’s global business. It told me that KTF is now seeking to bolster its global business by investing its money and operating its service in emerging markets with high growth potential. It is certainly a good idea of the company because firms operating in our nation will not manage to survive unless they seek and develop markets outside of this country.

KTF is the nation’s second largest mobile carrier. According to a statistical resource in 2007, KTF has 12772526 members out of 39703210 in market total. Simply thinking, KTF is a successful company and it is making lots of money by its mobile service. In addition, a new kind of service brand ‘SHOW’ has brought lots of new customers to KTF. It is sure that KTF is doing well and it won’t lose its position unless it makes some critical mistakes. However, the situation isn’t that simple. Although it is performing its service pretty well and it is making its profits quite good, there are some difficulties. Frankly speaking, KTF is not the only one who is facing some uncontrollable difficulties. Mobile carriers in Korea – KTF, SKT, LGT – is now facing a situation pretty much alike to a war. Because the domestic market is already been saturated, it is really difficult to make a new customer. For example, If there are 90 people who can use mobile phones out of 100 and the competing firms has already made 88 customers in total, it is impossible to make new customers. It is simply true in mobile service market in Korea. There aren’t any left spaces that the competing firms can take over. Consequently, this brought a war among the companies. They’ve been having ad-wars, trying to attract customers of other firms to change their suppliers. Also, they’ve been persuading customers of other companies to use their service, providing new cellphones in low price. But, this is non-sense. It doesn’t make any difference. Even though one company successes to steal other firms customers, it won’t be so profitable to them. They’ll have to pay the cellphone price for their new customers, and they’ve already used lots of money in advertisements and sales promotion. Simply, the only way to get out of this bloody environment is to expand its service areas to overseas. From this point of view, KTF’s movement is quite wise and appropriate.


KTF has not mad any significant actions in global business. The only impressive movement it has made is the major investment abroad with the acquisition of Malaysian 3G startup U Mobile with Japan’s NTT DoCoMo, both investing a combined $200 million for a 33 percent stake in U Mobile. However, even though its movement is not that big, it will bring some positive effects. The thing is, KTF actually performed an overseas investment, not just having ideas about it. This really is a good sign. They’ve actually tried to find a way out of the red ocean, domestic market. Furthermore, if KTF successes its venture in overseas, other competitors – SKT and LGT – will try to expand their service areas to overseas as well. This will somewhat reduce the tightness in domestic market, which is a positive effect. In addition, if these three companies make success in outside of Korea, they will be able to get revenues from outside of Korea, which means they have outer sources of money to provide quality services in Korea, and which means the service fees will eventually decline. This is why most of mobile customers in Korea is welcoming KTF’s adventure.


Reference : http://news.naver.com/main/read.nhn?mode=LSOD&mid=sec&sid1=108&oid=044&aid=0000072041


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