KT and LG U+ invest in homegrown app store

South Korea’s telecommunications firms KT and LG U+ said Wednesday they have invested a total of 26 billion won ($23.1 million) in the homegrown app market ONE store, a subsidiary of SK Telecom.

KT has spent 21 billion won to acquire a 3.1 percent stake in ONE store, while LG U+ has acquired a 0.7 percent stake with 5 billion won, according to a joint statement released Wednesday.

SK Telecom currently has a 50.1 percent stake, and local tech giant Naver has a 26.3 percent share in the company.

The investment in ONE store came as the local app platform prepares to go public this year. SK Telecom last year said that ONE store would be its first subsidiary to go public.

ONE store has seen a steady growth in its transactions as well. Last year, the app store saw a 34.4 percent increase in transaction amount, and the company turned a profit for the first time in five years.

ONE store was valued at around 1 trillion won when SK Telecom chose its underwriter for the initial public offering last September.

The latest investment also shows the local telecommunications firms’ efforts to ramp up growth of the homegrown digital distribution service as it works to gain footing against their foreign rivals Google Play and Apple’s App Store.

ONE store’s share in the local app market as of last August reached 18.3 percent, while its foreign competitor Google Play had a 71.2 percent share.

Industry sources said that ONE store‘s market share could further increase as it offers a lower commission rate at 20 percent, compared to Google Play, which recently received backlash over its decision to enforce its billing system that requires a 30 percent commission fee.

By Shim Woo-hyun (ws@heraldcorp.com)