KT Corporation (KT) is Korea's incumbent fixed-line carrier. The firm was partially owned by the Korean government before its full privatization in 2002. With approximately 20 million fixed-line subscribers, it is Korea's dominant provider of traditional telephony services including local and long distance calling and pre-paid phone cards. The company controls an estimated 92.1% of the local phone market (in terms of subscribers) and 85.6% of the domestic long distance market in Korea (in terms of revenues). In addition, KT Corporation is a leading provider of next-generation broadband and wireless services. The company's next-generation services include high-speed Internet access, offered under the Megapass (xDSL) and NESPOT (wireless LAN) brands. With over 6.5 million digital subscriber line (DSL) subscribers, KT leads in the Korean broadband market with an estimated market share of 45%. KT's wireless business consists of its 52.2% ownership stake in KT Freetel as well as a smaller wireless resale business operating at the parent company level. KT Freetel is the second-largest wireless operator in Korea with nearly 13 million subscribers as of December 31, 2006. Freetel is a market leader in wireless data services and is growing at a healthy pace, despite the high wireless penetration rate (over 83.1%) in Korea.
Consolidated revenues by business segment were as follows in 2006: Fixed-line Telephone services (36.0%), Internet access services (22.8%), Land-to-Mobile Interconnection (14.7%), Wireless Services (11.5%), Data services (10.5%), and Other Services (4.5%). In accordance with Korean GAAP, which differs from U.S. GAAP, consolidated revenues and expenses include the operations of KT Freetel and any other subsidiary where KT is the largest shareholder and controls more than 30% of the unit.