KT Corporation (NYSE:KT) Q3 2023 Earnings Call Transcript

And recently, with the popularization of the digital transformation among corporates, the AI, big data and cloud capabilities are essential. And we have all of these capabilities. And based on our capabilities, we are developing custom-wise services for corporates and this is enabled by the various corporate products that we have. We will be continuously expanding our B2B business, taking advantage of the strength of the company and the digital transformation trend of the industry. We have the most extensive network in the company — in the industry. And based on our IT fundamental capabilities, we will be developing differentiated services to further gain competitiveness. We will also be working to reform our cost structure to enhance profitability.

And based on the extensive coverage that I mentioned earlier, we will be leveraging the skills that we have in terms of providing stable services and the data security and the overall network security skills. And we will be working to provide end-to-end services that can enhance the customer convenience to strengthen customer satisfaction. We have key skills in telco, AI, big data, IDC and cloud. And based on these skills, we have the capability to enhance customer value. And for example, we can use telco AI and big data capabilities to offer targeted marketing services and targeting advertising services. And we can leverage the skills that we have in the telco and IT businesses to make unlimited offers to strengthen customer value. And with the telco business becoming more of a platform business, we will be working to change the paradigm in this area.

For example, by combining telco, messaging and intelligent networks, we can offer and build platforms for our customers so that our customers came up with new business opportunities. We also have launched Flexline which offers flexible plans and flexible frequencies so that they can develop the own services that can be satisfying for their own customers. So, we are continuously making efforts to develop new values for our customers. With the 5G specialized network and other various capabilities of the company, we will be able to come up with the most optimal services that can satisfy the needs of each industry and customer. And in the AICC business, we can leverage some of the mobility technology and services that we have. And these technologies and capabilities can help the company to drive internal quality growth of our DX services.

We will also be focusing on some of the service subscription offers that we have to further generate growth here. Lastly, we have along with cloud and IDC, we have large AI service. And we are working to pioneer this new market in Korea. We have extensive experience in the Public Cloud segment. And based on this extensive track record, we will be expanding into the Corporate Cloud segment. We also have experience in the SaaS and the public sector as well. So, we can leverage this experience and combine it with the services offered by KT Cloud and other KT subsidiaries to generate synergy and further penetrate this market. And we will be continuously evolving in this area with our large AI medium to propose and offer customized LLM models for the public finance manufacturing sectors.

And in conclusion with the advancement of technology and the digital transformation trend among our customers, we have — I believe that we have the key capabilities that can take advantage of the growth of this segment. And in that sense, our B2B business should continue to show robust growth. Combining our telco and IT, such as AI, big data and cloud capabilities, we will be able to offer various services that are required to satisfy the needs of our customers, thereby becoming the digital innovation partner that is solved out by our main customer base.

Seung-Hoon Chi: Thank you. We can move on to the next question.

Operator: The following question will be presented by Jisoo Jeong from Meritz Securities.

Jisoo Jeong: Good afternoon. My name is Jisoo Jeong from Meritz Securities. And I have 2 questions. First, if you look at the results of your competitors, inflationary pressures, such as the utility cost and electricity cost seems to have been a burden this quarter. So, what was the inflationary pressures like for KT? And second, AI competition among telcos in Korea is quite intensive at the moment. Can you give a little bit more color on your business strategies and your goals in the AI segment?