[INTERVIEW] KT to delve into global data market with Epsilon acquisition

The Korea Times

The Korea Times

Business

Sun, December 3, 2023 | 19:59

Tech

INTERVIEWKT to delve into global data market with Epsilon acquisition

Posted : 2021-09-09 16:38

Updated : 2021-09-10 13:53

Telecom firm's ICT capability expected to create synergy with new firm's network

By Kim Bo-eun

KT Vice President of Global Business Planning Park Se-zoo speaks during an interview at the company's office in central Seoul, Thursday. Courtesy of KT

KT has taken its first but meaningful step to enter the global data market, via the acquisition of data company Epsilon Global Communications.

The company hopes the acquisition will help the telecom firm level up group-wide capabilities in information communications technology (ICT) thanks to Epsilon's global infrastructure.

The global data market is growing rapidly in the digital era and the trend is being accelerated, ironically thanks to the continued spread of COVID variants as consumption of digital-based content has spiked. The market volume was worth 70 trillion won last year, but is expected to grow to 100 trillion won by 2025.

"The movement of global data is increasing but we lacked an overseas infrastructure," KT Vice President of Global Business Planning Park Se-zoo said in an interview, Thursday.

This is why KT decided to acquire Epsilon Global Communications, a data company owned by Malaysia's Kuok Group, he said. KT signed a stock purchase agreement to acquire all of Epsilon's shares for 170 billion won ($145 million), Wednesday.

Founded in London in 2003, Epsilon has more than 260 point of presence (PoP) data centers that support content delivery networks for services providers in 41 cities in 20 countries worldwide. The company operates three internet data centers in London, New York and Singapore. Epsilon's businesses bases also include Bulgaria and Hong Kong.

The executive said with the acquisition, KT will be entering the global connectivity business, currently dominated by telecom companies from Singapore, Hong Kong, Japan, Australia and the U.S. These companies are creating trillions of won in revenue from this business on an annual basis.

"Korean conglomerates with offices overseas have experienced difficulty because they have had to use the services of foreign firms," Park said. "But with the acquisition we will be able to connect Korean companies' overseas branches with their business in Korea."

The PoP data centers KT has secured will enable it to swiftly deal with problems that occur at the centers, he added.

Korean telecom firms have eyed this business sector as a major opportunity, but faced difficulties in securing a network of overseas PoP data centers, given they could only set up four to five centers a year, due to the regulatory process and investment costs.

The acquisition will enable KT to expand its global data infrastructure and increase clients to regions outside Asia, such as Europe and the U.S., the company said ― it plans to reach out to foreign customers via Epsilon. These will mainly be foreign companies entering Asian markets. KT said Epsilon will have stronger brand power through KT's acquisition, which will help it acquire new customers.

The takeover is part of the company's process to establish an infrastructure spanning point of presence (PoP) centers, cable capacity and content storage, on which additional businesses such as IT platform solutions will be built. KT does not have capabilities in these new business areas so it is continuing to look for possible acquisitions.

"We will continue to think about what kind of firms offering platform solutions will be appropriate for our business model," Park said.

The global data business infrastructure and services KT will be able to offer with the acquisition will propel the company's transformation, he added, along with services involving artificial intelligence and robots. KT projects the latest acquisition will serve as an impetus for further growth, which will in turn boost its share price.

"The movement of stocks depends on a company's growth potential, and we have opened the first chapter to enter the global market and this company we have acquired has immense potential so it will be able to contribute to revenue," Park said.

Epsilon received an award in the global consulting firm Frost & Sullivan's 2021 technology innovation leadership category this year.

bkim@koreatimes.co.kr