The Magician’s Memorial - Chapter 461



Only Krnovel

461. Equity Participation (1)

Just a week.

Google, Facebook, Amazon, video platforms, and even OTT.

The contracts between Taewoo Telecom and various American IT companies have ended.

I was able to handle this quickly because it was an IT company in which I was the major shareholder.

“What are the reactions of other news agencies?”

“We are trying to apply pressure by moving the Korea Communications Commission. And we have also declared that it is absolutely impossible to renew the contract at the same price as Taewoo Telecom.”

Why would you want to kill the goose that lays the golden eggs?

What Taewoo Telecom did was an act of betrayal from the perspective of other telecommunications companies.

“What is the public sentiment?”

“There hasn’t been much response yet. The concept of network usage fees is so complicated, and since there have been no problems for users, it is just perceived as a dispute between companies.”

“There will be an explosive reaction soon. Other carriers will divert their access routes to Hong Kong.”

“What problem would arise then?”

The communications network was like a highway.

The fewer vehicles there were, the faster we could move.

Conversely, the more vehicles there are, the slower the speed.

“If you use a detour to connect to Hong Kong, it will cause a bottleneck and slow down the speed by more than three times.”

“You mean three times? This will completely turn the stomachs of impatient Koreans upside down.”

“Taewoo Communications’ market share was 40%? More than half of the users will experience inconvenience.”

“Is that okay? Public opinion may throw stones at us.”

“So, we need to wage a public opinion war. Use SNS and various portal sites to inform people about the problems with network usage fees. If information spreads that it is 10 times more expensive than in the US, wouldn’t people throw stones at other telecommunications companies?”

It wasn’t just the news agency’s problem.

Of course, it was a problem in which American IT companies also had to bear some responsibility.

My arms were bent inward, and I had no choice but to side with the IT company I was a major shareholder of rather than other telecommunications companies.

“Although there will be strong opposition from telecommunications companies, it seems like a good way to increase Taewoo Telecom’s market share.”

“If this situation continues for a long time, we may be able to increase our market share to over 50%. But I don’t think the telecommunications companies will just sit back and watch.”

“They will probably take issue with the interconnection notice. Since 2016, they have been charging traffic costs based on the amount of data transferred. Taewoo Telecom may have to pay a huge amount.”

Before 2016, there was no traffic cost.

However, as the traffic imbalance became more and more severe, a policy called interconnection notification was created.

In the case of telecommunication companies that have to pay a lot of costs, they were passing it on to IT companies under the concept of network usage fees.

“We don’t have to worry about what the telecom cartels are doing. We have the upper hand. If we have Internet that is three times slower for just one week, users will explode with anger.”

“But is there no problem if we use a roundabout route? In the past, Facebook also used a roundabout route, and is currently in a lawsuit with the Korea Communications Commission.”

“A lawsuit takes a long time, but public opinion can explode in a week. The longer we delay, the better it is for us. So we just have to wait until the other carriers figure out a way to do it.”

Vice Chairman Han scratched his head.

It seemed as though time was not on our side.

“The size of the telecommunications cartel is too large for Taewoo Telecom to handle alone.”

“Of course, Taewoo Telecom will not take on the task alone. In order to fight against the telecommunications cartel, we will also need to form an alliance.”

“Are you planning on forming alliances with small and medium-sized regional carriers? It would help, but even then, you’re too small to fight the telecom cartels.”

“Surely I will join hands with small and medium-sized telecommunications companies? Just wait and see, I will form an alliance that can suppress the telecommunications cartels.”

I contacted David to find an ally.

Only then did Vice President Han feel relieved and leave the office.

He realized that the alliance he was trying to form was not a domestic alliance but an international alliance.

***

It’s been a week since the bypass connection started.

The speed of most IT companies frequently used by Korean Internet users has significantly slowed down.

Complaints exploded on social media and portal sites, and naturally, the media covered the issue of network usage fee disputes in great detail.

Some media outlets even reported that Taewoo Telecom had signed a risky contract.

It was clear that the telecommunications cartel was trying to shift the blame to Taewoo Telecom, but they didn’t care.

The argument wasn’t important right now.

It was time to move to solve the fundamental problem.

That is why I made an appointment with Chairman Son Jeong-woo of Shopbank through David, and was able to visit Japan today and meet Chairman Son Jeong-woo in person.

“It’s been a while. How have you been?”

“It is an honor to meet you again. I hope you have been well, Chairman.”

“Thanks to Chairman Kim, it’s great. Together Work’s corporate value is increasing day by day.”

Together Work, a shared office business.

It was a business that was well-received now, but it fell into the abyss the moment the Corona era arrived.

It was Chairman Son Jeong-woo who came out to meet me with a smile, not knowing that fact.

I couldn’t help but cough in vain and smile awkwardly.

“I heard that the value of Together Work has increased. Shouldn’t you take profit now?”

“It’s still a long way to go. It’s funny to say this in front of Chairman Kim, but investing is like a long-term race. You can only achieve all the glory when you cross the finish line.”

I certainly gave advice.

Sell ​​Together Work now.

If it were now, before the Corona era, we could have made a lot of money.

But the timing of the sale was entirely up to him, so there was nothing I could do.

“I respect the Chairman’s opinion.”

“Do you have any other good business ideas? Any business ideas that Chairman Kim suggests are always welcome.”

“This time, I came here not to propose a business idea, but to collaborate.”

“Collaboration? I don’t think you’re talking about finance. Are you talking about collaboration in the communications field?”

Chairman Son Jeong-woo was a man known for his investments.

However, Shopbank, of which he was the chairman, was one of the leading telecommunications companies in Japan.

“I understand that construction is underway on a submarine cable linking Japan and the United States.”

“We made some investment through Shopbank. It cost about $300 million.”

“Taewoo Group is also very interested in the submarine cable business.”

“Is that so? Hehe, if we start a new submarine cable business, I will definitely tell Chairman Kim.”

Korean telecommunications companies have not shown much interest in the submarine cable business.

This was the reason why Chinese and Japanese telecommunications companies were able to rise to become global tier 1 telecommunications companies, but there were no tier 1 telecommunications companies in Korea.

“I would like to make a suggestion.”

“Are you proposing a submarine cable business? We don’t have the resources to start a new submarine cable business.”

“I can help you with your financial resources. I would like to purchase a portion of the shares in an existing submarine cable. And I would like to provide a loan using the shares held by Shopbank as collateral.”

The fund managed by Chairman Son Jeong-woo is worth over 30 billion dollars.

Who would have ever offered to lend money to Chairman Son Jeong-woo?

“Huh, this is the first time I’ve been offered a loan. I’d like to hear more details.”

“We would like to provide a loan using the 3% stake in Nvidia held by Shopbank as collateral.”

American semiconductor company Nvidia.

It was a company that mainly produced graphic cards, and Chairman Son Jeong-woo owned more than 3% of the shares.

“I don’t really plan on taking out a loan, but I’d like to hear how much you’re willing to lend.”

“I understand that Nvidia’s current stock price is around $25. I think it is worth $2 billion at the most. Taewoo Group is willing to lend it at a higher price of $3.5 billion.”

“Are you saying you will lend money based on future value?”

“I don’t think Nvidia’s future value is that great. That’s why I’m making this offer. You can think of it as a loan-type equity acquisition.”

There was a reason I made this suggestion.

Before his return, Chairman Son Jung-woo had made several huge mistakes, one of which was selling Nvidia stock.

He didn’t value Nvidia highly.

That’s why I sold Nvidia’s stock at a relatively low point.

The Nvidia stocks that were sold off in that way soared more than fivefold.

“So you mean to say you’re going to buy Nvidia stock at a high price to get into the submarine cable business?”

“I am making this proposal because I think Taewoo Group might be greedy for Nvidia’s shares. If the stock price rises, you only need to repay the loan, but if the stock price falls, Taewoo Group will bear all the losses.”

“Haha, I’ve received many offers so far, but this is the first time I’ve received such a refreshing offer.”

How good are the conditions?

What investors were most concerned about was risk.

But if they had just accepted the offer, it would have completely eliminated the risk and given them $3.5 billion to spend right away.

“Certainly, if we had $3.5 billion, we could start a new submarine cable project.”

“We will also provide interest-free loans. We hope you will realize that Taewoo Group is serious about submarine cables.”

“New submarine cables are possible, but existing submarine cables are not something I can decide on my own.”

“We have received approval from Google, with whom we co-invested.”

Shopbank was not the only one pursuing the submarine cable business.

It was a submarine cable project that was carried out simultaneously by American telecommunications companies, Google, and Chinese companies.

“Hmm, if we can get approval from China, we could consider selling our stake.”

“We will soon be setting up a meeting with China, and we can easily obtain their approval.”

“Then, I will accept the offer to sell the shares of the existing submarine cable. How can I refuse it when Chairman Kim comes this far?”

We have gained an alliance called Shopbank.

Taewoo Telecom will acquire a stake in the submarine cable that is scheduled to open this year, a deal that will mark the beginning of a new global telecommunications alliance.

***

The next day.

When I returned to Korea, I told Vice Chairman Han about the story with Chairman Son Jeong-woo.

“Are you saying you’re going to lend me $3.5 billion interest-free? And you’re going to use $2 billion worth of Nvidia stock as collateral?”

“NVIDIA stock is only worth $2 billion now, but it will be worth over $10 billion in five years. That’s why I made this offer.”

Only then did Vice President Han nod his head.

Realizing that he had done five times the business, he continued speaking with a bright smile.

“I was able to buy Nvidia stocks at a low price and even acquire shares in a submarine cable as a bonus! As expected from the Chairman. You know that I have always respected you, right?”

“Respect, you piece of shit. Instead, get ready to start building a new submarine cable. We’re going to start building a submarine cable that will directly connect Korea and the US, in partnership with Google, Amazon, and Facebook.”

It was a vice president whose expression immediately hardened at the mention of the submarine cable.

His eyes were rolling around as if he was calculating in his head.

“Just hearing the story, the construction costs must not be small.”

“It is said that the direct submarine cable between Japan and the US cost 300 million dollars, so it will cost a little more than that. If we split the cost with American IT companies, the construction cost should be less than 100 million dollars.”

“For that amount of money, Taewoo Telecom can easily afford it on its own. I will give instructions to Taewoo Telecom right now!”

It may be a little late, but it was something that needed to be started now.

By securing submarine cables, Taewoo Telecom was able to widen the gap with other telecommunications companies.