LG U+ looks for a non-telecom future

Amid the slowing growth in the traditional telecom sector, LG U+ is doubling down on its non-telecom businesses with a focus on subscription-based services and content.

LG U+ CEO Hwang Hyeon-sik speaks at a press conference about a new business strategy focusing on non-telecom businesses at the Ambassador Seoul-A Pullman Hotel in central Seoul Thursday. [LG U+]

Amid the slowing growth in the traditional telecom sector, LG U+ is doubling down on its non-telecom businesses with a focus on subscription-based services and content.

“We decided to come up with services that customers can spend more time with, and foster platforms that can be expanded based on such services,” said LG U+ CEO Hwang Hyeon-sik in a press conference Thursday at the Ambassador Seoul-A Pullman Hotel in central Seoul.

Hwang said LG U+ will focus on "platform services" that connect customers with service providers, a strategy named “U+ 3.0” by the company.

LG U+ has been “struggling to find a breakthrough” as it was “losing out to small and big platform companies in offering customer-centered services and understanding customers,” said Hwang.

“We concluded that … we need to forgo the way we had been doing things and start completely afresh.”

LG U+ has the smallest number of subscribers among the three telecoms in Korea. SK Telecom had a 41 percent market share in July, while KT had 23 percent and LG U+ 21 percent, according to the Ministry of Science and ICT.

LG U+ hopes to boost the non-telecom proportion of its revenues from last year’s 20 percent to 40 percent by 2027. The company also wants its enterprise value — the sum of market cap and net debt — to reach 12 trillion won ($8.6 billion) in five years, about double that of last year.

The new business plan consists of four pillars: a data-based lifestyle service; an entertainment and content service; a kid and education content service; and Web 3.0 businesses that involve such businesses as non-fungible tokens, the metaverse and start-up investments.

LG U+ introduced a subscription management service in July, which offers a discount for various subscription services to local customers when they subscribe to service providers through LG U+. The company hopes to expand such subscription-based lifestyle services into sectors such as healthcare, pet care and travel.

LG U+ plans to expand its video content line-up based on user data analysis, and also aims to come up with a subscription-based kid content service, a “kid’s Netflix.“

Other telecom companies are also eyeing non-telecom businesses for future growth. KT aims to increase the proportion of its non-telecom revenue from the current 41 percent to 50 percent by 2025. SK Telecom is running its own metaverse service named ifland, as well as subscription management and virtual assistant services.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]