KT acquires Epsilon for $145 million for global data market shift

South Korea’s largest telco KT Corp announced on Friday its acquisition of Epsilon for $145 million from Malaysian conglomerate Kuok Group, framing the South Korean operator to be the dominant stakeholder in the Singapore-based communication firm.

The acquisition’s terms gave KT’s partnership with Daishin Private Equity a 100 percent stake in Epsilon from Kuok Group. Following the acquisition, KT will hold majority control over 58 percent stakes of the Singapore-based telco, and Daishin Securities subsidiary will hold 42 percent.

The island-city telco provides a compilation of solutions, such as routing, cloud on-ramp, networking, and peering services. In addition to its data center in Singapore, the firm currently holds two data centers in London and New York and 260 PoPs (Point of Presence) across 41 cities in 20 counties, including mainland China.

PoP is a demarcation point, access point, or physical location of which two or more networks or communication devices share the same connection.

“Epsilon provides mission-critical networking for global digital transformation and maximizing the value of the cloud for enterprise customers. It has a tremendous mix of technology, teams, and innovation that are directly aligned with KT’s vision for enabling enterprises with digital platforms,” said KT CEO Dr. Hyeonmo Ku in a statement.

“Epsilon provides great value with its Infiny platform and global network, which offers customers an agile approach to global networking. Both companies share a vision for global digital transformation and the power that digital platforms have to change industries,” he added.

The power merger between Epsilon and KT will pave the way for integrated global networking with systems that supervise and control telecommunications networks and services. It will drastically augment sales capacity covering a gustier domestic Business-to-Business (B2B) base for both companies.

The acquisition will give KT the power to enrich its global data infrastructure from Asia to Europe, with enhanced PoP coverage in the U.S. by securing more customers in overseas markets and foreign firms aiming for Asian expansion. It will move South Korea on the right track to convert itself from a telco to a digital platform company.

Initially, the South Korean telco sales were 100 percent generated from the telecommunication business. However, acquiring Epsilon will weaponize the operator with the needed means to raise its services in non-communication areas by cultivating the sector to reach a 50 percent sale level in 2025.

In the past, the Singaporean firm mainly focused on transforming its line of business to a service-based unit. However, this acquisition will supply the operator with the right tools to deliver global access and data-center interconnection.

“There is an ever-increasing reliance on software in next-generation networks. This opens up new cases of serving customers through an end to delivery or modular approach. Whoever can crack this service-driven approach will increase engagement and loyalty among its customers,” said tech, media & telco Analyst at PP Foresight, Paolo Pescatore in a statement.

In 2020, the global data market stood at a $62 billion valuation, with an estimation of approximately reaching $86 billion by 2025.