KT, LGU+ join SKT's app market ONE Store in pre-IPO funding

South Korea’s KT and LG Uplus joined their wireless rival SK Telecom’s open app market ONE Store via equity investment to back the reinforcement of a local app store against multinationals and its bid for an IPO this year.

According to the telecommunication industry sources on Wednesday, KT invested 21 billion won ($18.6 million) for a 3.1 percent stake in ONE Store and LG Uplus 5 billion won for 0.7 percent.

The equity investments have raised the ownership of the nation’s three major telcos to 53.9 percent with SK Telecom holding 52.1 percent. The remaining 26.3 percent is owned by the country’s tech giant Naver and 18.6 percent by financial investors.

The three mobile carriers and Naver integrated their own app markets to ONE Store in 2016 to challenge the dominance of Apple’s App Store and Google’s Play Store. They will strengthen their cooperation and share responsibility in management to take on the foreign rivals that are accused of abusing their dominant power in the domestic market. Google faced strong criticism last year when it raised commission on app developers.

The new investments would also accelerate ONE Store’s initial public offering (IPO). It named KB Securities, NH Investment & Securities and SK Securities its underwriting team in September last year to go public within this year. Its largest shareholder SK Telecom is planning to list its subsidiaries - internet service unit SK Broadband, video streaming platform Wavve and e-commerce platform 11st Street, following the IPO of ONE Store.

ONE Store generated its first net profit in 2020 after running on a deficit for the previous four years.

The joining of the two mobile carriers as shareholders would bolster the cooperation of the three telcos, according to ONE Store CEO Lee Jae-hwan. “We will seek mutual growth with other players in the market and provide more benefits to customers to grow as a representative app market in Korea.”

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