Listen to this article
South Korea's KT Corp on Thursday said its chief executive Lee Yong-kyung would not seek a second term once his term expires in August.
KT said Mr Lee made the decision for the sake of the company's long-term progress, paving the way for a new leadership who will have to find ways of driving growth at the country's dominant fixed-line carrier and broadband service provider.
A number of candidates including Nam Joong-soo, head of KT's mobile unit KTF, are reportedly vying for the job. Mr Lee's successor will be selected at a shareholder's meeting in August.
?I am confident the new CEO will be someone who can transform KT further into a more competent telecoms company,? Mr Lee said in a statement. He added that he would not participate in a committee to nominate his successor in order to ensure transparency of the selection process.
Analysts said the incoming CEO would have to search for a new source of growth as fixed-line traffic continues to fall with customers switching to mobile phones and the broadband market nears saturation, with about 70 per cent of Korean households logged onto the high-speed internet.
?It is hard to expect substantial revenue growth at KT for the next three years, as it does not have any growth driver,? said James Yoon, a telecom analyst at BNP Paribas Peregrine.
KT is trying to boost revenues by developing new businesses such as a wireless broadband service dubbed Wibro, but demand for new packages has yet to pick up.
KT on Thursday signed a preliminary agreement with Intel to work together to accelerate the commercialisation of the Wibro service.
Moody's Investors Service recently raised its credit rating on KT by one notch, citing its lower liabilities and dominant position in the fixed-line sector. KT controls more than 90 per cent of the fixed-line market and half of broadband connections. The company reported a 7 per cent increase in first-quarter net income at Won365bn.