Values more than numbers… Additional 5G frequency acquisition, content and B2B achievements this year Hwang Hyun-sik, CEO of LG Uplus, celebrated his first year in office. LG U+, led by him, recorded the highest operating profit in history last year thanks to the growth of 5G subscribers and the growth of new businesses that are being fostered for de-communication.
It is predicted that this year, the operating profit will exceed 1 trillion won, breaking the record for the highest performance. Among them, there is the task of securing additional 5G frequencies and producing tangible results in new industries such as content & #12539; corporate infrastructure.
Hwang Hyun-sik, CEO of LG Uplus, who attended MWC2022, attended a press conference held in Barcelona, Spain. [Photo=LGU+]
According to LG U+ on the 17th, CEO Hwang has been emphasizing the steaming fan since he was officially appointed at the regular shareholders meeting on the 19th of last year, and it is evaluated that he has implemented customer-oriented management.
◆ Focus on customer value… XR Content Export Performance
After joining the LG Group, CEO Hwang spent most of his career in the telecommunication sales field. He served as a sales executive at LG Telecom, the predecessor of LG U+, and then in charge of consumer business just before becoming CEO. With the realization that came from experience as well, he always emphasized customer-centeredness. To this end, he also declared that he would focus on customer value rather than financial performance or efficiency.
At the first press conference held since taking office, LG U+ aims to be a company that continuously innovates based on digital technology, but considers customer value more important than technology itself. Even if there is a burden on the company, he emphasized that he wants to give priority to providing meaningful value to customers.
Therefore, qualitative growth rather than numerical achievement was suggested as the goal. If you put the numbers first, you will forget your customers. CEO Hwang set the target for the company with the lowest churn rate.
His management philosophy is also reflected in the way the organization operates. After his official inauguration, he showed his will for responsible management by repurchasing treasury stocks, and then underwent organizational restructuring, reorganizing the business-to-consumer transaction sector, and ubiquitous content and data-related sectors, which will be the basis for growth, under the direct control of the CEO.
B2C is producing results by exporting extended reality contents. So far, it has exported a cumulative $24 million worth of XR contents ・ solutions, and LG U+ signed a business agreement with three global telecommunication companies at MWC2022, the worlds largest mobile telecommunication fair, which I recently visited.
In addition, CEO Hwang hired Lee Duk-jae, a former CJ ENM executive vice president, as the chief content officer to strengthen content planning and production capabilities. As the head of the content ・platform business unit and CCO, Lee is promoting the platform business including XR, Idol Live, Sports, and Smart Home, and planning & producing content for LG U+. Leading the platform business. Executive Vice President Lee is planning fandom-based content, and has aspirations to start producing results from the second half of this year.
He also paid attention to enhancing shareholder value. Last year, the dividend payout ratio was 35%, and the dividend per share was set at 550 won, up 22.2% from the previous years 450 won. This year, we raised the dividend payout ratio to 40%. The ESG committee was established within the board of directors, and for the first time since its inception, it has promoted the purchase of treasury stock worth about 100 billion won and the introduction of an interim dividend system.
◆ Securing 5G spectrum and increasing the proportion of new businesses
CEO Hwang, who led the leap of LG U+, also has challenges. We need to make an additional allocation of 5G frequencies, which was not completed earlier this year. The Ministry of Science and ICT was originally scheduled to allocate the 20 MHz width of the 3.5 GHz band 5G frequency requested by LG U+ in July last year at an auction, but it was temporarily postponed due to opposition from SK Telecom and KT. In the first 5G auction, LG U+ is only servicing at 80 MHz, which is 20 MHz wider than the two carriers. LG U+ continues to insist on the need for this allocation, but there is hardly any progress.
New growth businesses should also produce tangible results. CEO Hwang selected fostering new growth businesses as a management keyword to focus on this year. LG U+ aims to achieve 30% by 2025, but there are views that it is not as active as its competitors. CEO Hwang proposes six new non-communication businesses such as artificial intelligence, big data, cloud, B2B solution, and content, and in particular, plans to strengthen the smart factory and mobility fields by combining with LG Groups manufacturing capabilities.
Another concern is to convert U+Mobile TV, which is its own mobile OTT in the online video service trend, into a service that is useful to customers beyond a simple mobile additional service. At first, it was trying to focus on strengthening the content service provided through IPTV rather than developing its own OTT, but domestic operators as well as overseas OTT are actively entering the market, so it is impossible to wait and see. However, it plans to approach it in a different way than the existing OTT strategies for securing their own content.
LG U+ is expected to rank on the 1 trillion won club in annual operating profit this year. Based on the nationwide 5G network, subscribers are expanding and performance in new businesses such as content and B2B solutions is expected to begin in earnest.