In 1981, the Government established us under the Korea Telecom Act to operate the telecommunications services business that it previously directly operated. Under the Korea Telecom Act and the Government-Invested Enterprises Management Basic Act, the Government exercised substantial control over our business and affairs. Effective October 1, 1997, the Korea Telecom Act was repealed and the Government-Invested Enterprises Management Basic Act became inapplicable to us. As a result, we became a corporation under the Commercial Code, and our corporate organization and shareholders’ rights were governed by the Government’s privatization laws and the Commercial Code. Among other things, we began to exercise greater autonomy in setting our annual budget and making investments in the telecommunications industry, and our shareholders began electing our directors, who had previously been appointed by the Government under the Korea Telecom Act. Prior to 1993, the Government owned all of the issued shares of our common stock. From 1993 through May 2002, the Government disposed of all of its equity interest in us, and the privatization laws ceased to apply to us in August 2002. We amended our legal name from Korea Telecom Corp. to KT Corporation in March 2002. Before December 1991, we were the sole provider of local, domestic long-distance and international long-distance telephone services in Korea. The Government began to introduce competition in the telecommunications services market in the early 1990’s. As a result, there are currently three local telephone service providers, five domestic long-distance carriers and numerous international long-distance carriers (including voice resellers) in Korea, including ourselves. In addition, the Government awarded licenses to several service providers to promote competition in other telecommunications business areas such as mobile telephone services and data network services. In June 2009, KT Freetel Co., Ltd. (“KTF”), a subsidiary providing mobile telephone services, merged into KT Corporation, with KT Corporation surviving the merger, with the objective of maximizing management efficiencies of our fixed-line and mobile telecommunications operations as well as more effectively responding to the convergence trends in the telecommunications industry. There are currently three mobile telephone service providers in Korea. See “—Item 4.B. Business Overview—Competition.” We are a corporation with limited liability organized under the laws of Korea, and our legal and commercial name is KT Corporation. Our principal executive offices are located at KT Gwanghwamun Building East, 33, Jong-ro 3-gil, Jongno-gu, 03155, Seoul, Korea, our telephone number is +82-70-4193-4036 and the address of our English website is https://corp.kt.com/eng/. The SEC maintains a website (http://www.sec.gov), which contains reports, information statements and other information regarding issuers that file electronically with the SEC. Item 4.B.  Business Overview We are the leading integrated telecommunications and platform service provider in Korea and one of the most advanced in Asia. We plan to transform ourselves into an AI-driven information and communication technology (“ICT”) company that integrates AI and information technology into our existing communication technology business and expands into new businesses that utilize AI. In addition, we will continue to pursue innovation in our other major business areas, including media and content services, Internet data centers and cloud services, real estate operations and financial services. In line with our strategic direction under our new management, we are pursuing a vision to become an “AX (AI Transformation) platform company,” leveraging our core connectivity infrastructure and data capabilities to support next-generation platforms and services. Our principal services include: •mobile voice and data telecommunications services based on 5G, 4G LTE and 3G W-CDMA technology; 18 Table of Contents •fixed-line services, which include: Ø(i) fixed-line telephone services, including local, domestic long-distance and international long-distance services, (ii) Voice over Internet Protocol (“VoIP”) telephone services (i.e., provision of communication services over the Internet, and not over the fixed-line PSTN) and (iii) interconnection services to other telecommunications companies; Øbroadband Internet access services; and Ødata communication services, including fixed-line and satellite leased line services and dedicated broadband Internet connection service to corporate and other institutional customers; •media and content services, including IPTV, satellite TV, media content creation and distribution services, digital music services, e-commerce services, online advertising consulting services and web comics and novels services; •financial services, including credit card processing and other financial services offered primarily through BC Card; •other business activities, including information technology and network services and rental of real estate by KT Estate Inc. (“KT Estate”); and •sale of goods, primarily sale of handsets related to our mobile services and miscellaneous telecommunications equipment, as well as sale of residential units and commercial real estate developed by KT Estate. Leveraging our dominant position in the fixed-line telephone services market and our established customer base in Korea, we have successfully pursued new growth opportunities and obtained strong market positions in each of our principal lines of business. In particular: •in mobile services, we had approximately 29.0 million subscribers, consisting of 20.6 million MNO mobile subscribers and 8.4 million MVNO mobile subscribers. We achieved a market share of 28.9% with approximately 13.6 million MNO mobile phone subscribers as of December 31, 2025; •in fixed-line and VoIP telephone services, we had approximately 10.9 million subscribers, consisting of 7.7 million PSTN subscribers and 3.2 million VoIP subscribers as of December 31, 2025. As of such date, our market share of the fixed-line local telephone and VoIP services was 51.7%; and •we are Korea’s largest broadband Internet access provider with approximately 10.2 million subscribers as of December 31, 2025, representing a market share of 40.3%. For the year ended December 31, 2025, our operating revenue was W28,548 billion, our profit for the year was W1,825 billion and our basic earnings per share was W7,074. As of December 31, 2025, our total assets were W43,050 billion, total liabilities were W23,633 billion and total equity was W19,417 billion. 19 Table of Contents Our Services The following table sets out our operating revenue by principal product categories and the respective percentage of total operating revenue in 2023, 2024 and 2025. For the Year Ended December 31, 2023 2024 2025 Products and services Billions ofWon % Billions ofWon % Billions ofWon % Mobile services ₩ 7,140 26.8 % ₩ 7,318 27.4 % ₩ 7,586 26.6 % Fixed-line services: Fixed-line and VoIP telephone services 1,249 4.7 1,188 4.4 1,116 3.9 Broadband Internet access services 2,579 9.7 2,634 9.9 2,684 9.4 Data communication services 1,315 4.9 1,335 5.0 1,392 4.9 Subtotal 5,142 19.3 5,158 19.3 5,192 18.2 Media and content services 3,207 12.1 3,107 11.6 3,085 10.8 Financial services 3,968 14.9 3,743 14.0 3,474 12.2 Others 3,846 14.5 4,025 15.1 4,346 15.2 Sale of goods (1) 3,293 12.4 3,374 12.6 4,865 17.0 Total operating revenue ₩ 26,595 100.0 % ₩ 26,724 100.0 % ₩ 28,548 100.0 % _______________________ (1)Primarily related to sale of handsets for our mobile service and miscellaneous telecommunications equipment, as well as sale of residential units and commercial real estate developed by KT Estate. Mobile Services We provide mobile services based on 5G, 4G LTE and 3G W-CDMA technology. We have made extensive efforts to continually develop advanced technologies as well as to provide a variety of new mobile services with enhanced speed, latency and connectivity. We commercially launched our next generation 5G mobile services in April 2019 and completed the expansion of our coverage nationwide in April 2024. We believe that the faster data transmission speed and lower latency of the 5G network enables us to offer significantly enhanced wireless data transmission with faster access to multimedia contents. We began offering 4G LTE services in the Seoul metropolitan area in January 2012, and we completed the expansion of our coverage nationwide in October 2012. Revenue related to mobile services accounted for 26.6% of our operating revenue in 2025. The following table shows selected information concerning the usage of our network during the periods indicated and the number of our mobile subscribers as of the end of such periods: As of or for the Year Ended December 31, 2023 2024 2025 Average monthly revenue per subscriber (1) ₩ 33,965 ₩ 34,524 ₩ 35,180 Total number of mobile subscribers (in thousands) 24,897 26,132 28,985 MNO mobile subscribers (in thousands) (2) 17,759 18,950 20,618 MNO mobile phone subscribers: LTE mobile phone subscribers 3,659 2,870 2,419 5G mobile phone subscribers 9,724 10,402 11,156 W-CDMA mobile phone subscribers 134 97 68 Sub-total 13,517 13,369 — 13,643 Subscribers of miscellaneous devices (3) 4,242 5,581 6,974 MVNO mobile subscribers (in thousands) (4) 7,138 7,182 8,368 _______________________ (1)The average monthly revenue per subscriber is computed by dividing total monthly fees, usage charges and value-added service fees for the period by the weighted average number of subscribers (other than MVNO subscribers and subscribers of miscellaneous IoT services) and dividing the quotient by the number of months in the period. (2)Represents the number of mobile subscribers who directly subscribe to mobile services provided by us. 20 Table of Contents (3)Includes tablets and other IoT devices. (4)Represents the number of mobile subscribers served by MVNOs (consisting of third-party companies as well as subsidiaries and affiliates of KT Corporation), which lease network access from us to provide mobile services. We compete with SK Telecom, a mobile service provider that has a longer operating history than us, and LG U+ which began its service at around the same time as KTF. As of December 31, 2025, we had approximately 13.6 million MNO mobile phone subscribers, or a market share of 28.9%. We market our mobile services primarily through independent exclusive dealers located throughout Korea. In addition to assisting new subscribers to activate mobile service and purchase handsets, authorized dealers are connected to our database and are able to assist customers with their accounts. Although most of these dealers sell exclusively our products and services, sub-dealers hired by exclusive dealers may sell products and services offered by other mobile telecommunications service providers. Authorized dealers are entitled to a commission for each new subscriber registered, as well as ongoing commissions for the first five years based primarily on the subscriber’s monthly fee, usage charges and length of subscription. In response to the diversification of our customers’ demands and their increasing sophistication, we have also selectively engaged in opportunities to expand our internal sales channels. We operate customer plazas in key areas that engage in mobile service sales activities as well as provide a one-stop shop for a wide range of other services and products that we offer. We also operate a website to promote and advertise our products and services to the general public and in particular to younger customers who are more familiar with the Internet. We conduct the screening process for new subscribers with great caution. A potential subscriber must meet all minimum credit criteria before receiving mobile service. The procedure includes checking the history of non-payment and credit information from banks and credit agencies such as the National Information and Credit Evaluation Corporation. Applicants who do not meet the minimum criteria can only subscribe to the mobile service by using a pre-paid card. Fixed-line Services We provide a variety of fixed-line services, including various telephone services, broadband Internet access and data communication services. Fixed-line and VoIP Telephone Services We utilize our extensive nationwide telephone network to provide fixed-line telephone services, which consist of local, domestic long-distance, international long-distance services and land-to-mobile interconnection services. Our fixed-line telephone network includes exchanges, long-distance transmission equipment and fiber optic and copper cables. We also provide VoIP telephone services that enable VoIP phone devices with broadband connection to make domestic and international calls. These fixed-line and VoIP telephone services accounted for 3.9% of our operating revenue in 2025. In recent years, the proliferation of mobile phones, as well as the availability of increasingly lower wireless pricing plans, some of which include unlimited voice minutes, has led to significant decreases in our domestic long-distance call minutes and local call pulses. 21 Table of Contents The following table shows selected information concerning our fixed-line telephone network and the number of PSTN and VoIP subscribers as of the end of the periods indicated as well as their engagement levels during such periods. As of or for the Year Ended December 31, 2021 2022 2023 2024 2025 Total Korean population (thousands) (1) 51,639 51,439 51,325 51,217 51,117 PSTN and VoIP lines in service (thousands) 13,096 12,581 12,035 11,475 10,890 PSTN lines in service 9,905 9,376 8,820 8,264 7,717 Local lines in service 8,937 8,430 7,892 7,347 6,808 Group lines in service 968 946 928 917 907 VoIP lines in service 3,191 3,206 3,215 3,211 3,173 Fiber optic cable (kilometers) 896,076 917,114 937,146 953,183 968,465 Domestic long-distance call minutes (millions) (2) 500 395 321 242 201 Local call pulses (millions) (2) 554 463 363 294 265 _______________________ (1)Based on the number of registered residents as published by the Ministry of the Interior and Safety of Korea. (2)Excluding calls placed from public telephones. Our domestic long-distance cable network is entirely made up of fiber optic cable and can carry both voice and data transmissions. Compared to conventional materials such as coaxial cable, fiber optic cable provides significantly greater transmission capacity with less signal fading, thus requiring less frequent amplification. All of our lines are connected to exchanges capable of handling digital signal technology. A principal limitation of the older analog technology is that applications other than voice communications, such as the transmission of text and computer data, require either separate networks or conversion equipment. Digital systems permit a range of voice, text and data applications to be transmitted simultaneously on the same network. In recent years, the volume of our incoming international calls has significantly exceeded the volume of our outgoing international calls. The agreed settlement rate is applied to the call minutes to determine the applicable net settlement payment. The following table shows the number of minutes of international long-distance calls recorded by us and network service providers utilizing our international long-distance network in each specified category for each year in the three-year period ended December 31, 2025: Year Ended December 31, 2023 2024 2025 (In millions of billed minutes) Incoming international long-distance calls 615.8 518.3 436.3 Outgoing international long-distance calls 31.5 27.5 23.5 Total 647.3 545.8 459.8 _______________________ (1)Includes incoming traffic of application-to-person correspondence. Under the Telecommunications Business Act, we are required to permit other service providers to interconnect to our fixed-line network. Currently, the principal users of this interconnection capacity include affiliates of SK Telecom and LG U+ (offering local, domestic long-distance and international long-distance services, and transmitting calls to and from their mobile networks). We recognize as land-to-mobile interconnection revenue the entire amount of the usage charge collected from the landline user and recognize as an expense the amount of interconnection charge paid to the mobile service provider. Broadband Internet Access Services Leveraging our nationwide network of 968,465 kilometers of fiber optic cables as of December 31, 2025, we have achieved a leading market position in the broadband Internet access market in Korea. We 22 Table of Contents believe we have a competitive advantage over other broadband Internet access service providers because, unlike our competitors, we can utilize our existing networks nationwide to provide broadband Internet access service. Our principal Internet access services are offered under the “KT Internet” and “KT GiGA Internet” brand names. We also offer WiFi services under the “KT WiFi” brand name, which is designed to integrate fixed-line and wireless services by offering high speed wireless Internet access to laptops and smartphones in hot-spot zones and KT Internet service in fixed-line environments. Our broadband Internet access services accounted for 9.4% of our operating revenue in 2025. As of December 31, 2025, we had approximately 10.2 million broadband Internet subscribers, including approximately 7.1 million KT GiGA Internet service subscribers with enhanced data transmission speeds. We also sponsored approximately 78 thousand hot-spot zones nationwide for wireless connection as of December 31, 2025. Our KT Internet services primarily utilize ADSL technology, which is a technology that converts existing copper twisted-pair telephone lines into access paths for multimedia and high-speed data communications. ADSL transforms the existing public telephone network from one limited to voice, text and low-resolution graphics to a system capable of bringing multimedia to subscriber premises without new cabling. The asymmetric design optimizes the bandwidth by maximizing the downstream speed for downloading information from the Internet. We are continually upgrading our broadband network to enable better FTTH connection, which further enhances data transmission speed and connection quality. FTTH is a telecommunication architecture in which a communication path is provided over optical fiber cables extending from the telecommunications operator’s switching equipment to the boundary of home or office. FTTH uses fiber optic cable, which is able to carry a high-bandwidth signal for longer distances without degradation. FTTH enables us to deliver enhanced services that require high bandwidth, such as IPTV, and other digital media contents with higher stability. Data Communication Services Our data communication services involve offering exclusive lines that allow point-to-point connection for voice and data traffic between two or more geographically separate points. As of December 31, 2025, we leased 320,496 lines to domestic and international businesses. We provide dedicated and secure broadband Internet connection service to institutional customers under the “Kornet” brand name. We provide high-speed connection to our Internet backbone network, as well as rent to our customers and install necessary routers to ensure reliable Internet connection and enhanced security. We provide discount rates to qualified customers, including small- and medium-sized enterprises, businesses engaging in Internet access services and government agencies. Data communication services accounted for 4.9% of our operating revenue in 2025. Through our wholly owned subsidiary KT Sat Co., Ltd., we also provide transponder leasing, broadcasting, video distribution and data communication services through satellites periodically launched by us. We also lease satellite capacity from other satellite operators to offer satellite services to both domestic and international customers. Media and Content Services We offer a variety of media and content services, including IPTV, satellite TV, media content creation and distribution services, e-commerce services, digital music services, online advertising consulting services, web comics and novels services and media content creation and distribution services. Media and content services accounted for 10.8% of our operating revenue in 2025. In addition, in September 2021, KT Skylife, in which we held a 50.3% interest as of December 31, 2025, acquired a 100.00% interest in KT HCN, which is Korea’s fifth largest cable TV operator. See “Item 5. Operating and Financial Review and Prospects—Item 5.A. Operating Results—Overview—Acquisitions and Disposals of Interests in Subsidiaries and Joint Ventures.” IPTV We offer high definition video-on-demand and real-time broadcasting and ultra-high-definition (“UHD”) IPTV services under the brand name “Genie tv.” Our IPTV service offers access to an array of digital media contents, including broadcast channels, movies, sports, news, educational programs and TV replay, for a fixed monthly fee or on a pay-per-view basis. Through a digital set-top box that we rent to our customers, our customers are able to browse the catalogue of digital media contents and view selected media streams on their 23 Table of Contents television. A set-top box provides two-way communications on an IP network and decodes video streaming data. We had approximately 9.5 million IPTV subscribers as of December 31, 2025. We are also leveraging our big data analytics capabilities and AI technology to further enhance our IPTV services. We offer AI-based “GiGA genie” service to our IPTV subscribers through a voice recognition speaker that also serves as the IPTV’s set-top box, which enables us to take advantage of big data analytics and enhance our product offerings as well as operate a more effective automated customer service center. Satellite TV We offer satellite TV services with features similar to our IPTV services through KT Skylife. As of December 31, 2025, we had approximately 3.2 million subscribers for our satellite TV services, including Genie tv Skylife combination services. Digital Music Services We operate Genie, our platform for music contents as well as subscription-based access to digital music streaming and downloading services, through our subsidiary KT Genie Music Corporation, in which KT Studio Genie Co., Ltd. (“KT Studio Genie”) held a 36.0% interest as of December 31, 2025. Genie offers a broad selection of Korean and international music, both in streaming and download formats, as well as a variety of features designed to enhance the experience of users. In addition, we provide a variety of original audio contents through Genie, including audio books and novels. We offer Genie services in various formats that are specifically designed for mobile and other connected devices, PCs, TVs and automobiles. KT Genie Music Corporation also provides online streaming of live music performances through STAYG platform. E-commerce Services Through KT alpha Co., Ltd. (“KT alpha”), in which we held a 73.0% interest on a consolidated basis as of December 31, 2025, we offer TV home shopping and mobile gift voucher distribution services. Furthermore, we offer a variety of consumer products and food items on our IPTV and satellite TV platforms. We also secure rights to digital entertainment contents such as movies, animations and TV series and distribute such contents to other media platforms. We also offer mobile gift card services through KT alpha under the brand name “giftishow” and other mobile advertising solutions to corporate customers. Online Advertising Consulting Services We provide strategic advertising consulting services for the online advertising industry through our subsidiaries KT Nasmedia, Co., Ltd. (“KT Nasmedia”), in which we held a 43.1% interest as of December 31, 2025. We provide a variety of services for advertising agencies, online media companies and their clients, ranging from market studies to advertising campaign planning as well as analysis of such campaign’s effectiveness. Our proprietary data analysis tools enable us to define specific advertising targets for the clients as well as to evaluate the effectiveness of various marketing channels to provide an optimal advertising campaign strategy. Web Comics and Novels Services StoryWiz, which was established in February 2020 and in which KT Studio Genie held a 100.0% interest as of December 31, 2025, specializes in producing and distributing web comics and web novels. StoryWiz operates a platform called Blice for web novels and web comics. Through Blice, numerous writers distribute their web novels and web comics, and we support them in various ways, including holding contests and providing funding for new and promising writers. Blice also offers a diverse selection of genres including comedy, romance, action and fantasy. We strive to further expand our intellectual property to movies and dramas. 24 Table of Contents Media Content Creation and Distribution Services We engage in media content creation and distribution services through KT Studio Genie, in which we held a 90.9% interest as of December 31, 2025. KT Studio Genie produces and sells a wide range of media contents, including multi-episode drama series, to traditional media channels and OTT services. KT Studio Genie also serves as a distribution agency of media contents produced by third-parties. Financial Services As part of our overall strategy, we selectively pursue new business opportunities in the financial sector that complement our telecommunications business. In October 2011, we acquired a controlling interest in BC Card, a leading credit card solutions provider in Korea in which we held a 69.5% interest as of December 31, 2025. As of such date, BC Card held a 33.7% interest in Kbank, an Internet-only bank that began its commercial operations in April 2017. Revenue from our financial services, which consist primarily of revenue from BC Card, accounted for 12.2% of our operating revenue in 2025. BC Card Through BC Card, we offer various credit card processing and related financial services. We operate the largest merchant payment network in Korea as measured by transaction volume. We also provide outsourcing services to a wide range of financial institutions for their credit card and check card business operations, including production and delivery of new credit cards, the preparation of monthly statements, management of merchants and other ancillary services. BC Card also offers its own credit cards as well as financial services including card loans and consumer loans to individuals, corporate loans and real estate project finance loans. In recent years, BC Card has been focusing on lending activities secured by collateral assets. BC Card offers services in select countries in Asia, including Korea, China, Indonesia and Vietnam. A minority interest in BC Card is owned by various financial institutions in Korea, many of which are member companies that enter into co-branding agreements with us and issue credit cards and check cards under the “BC Card” brand. Our member companies that issue co-branded credit or check cards include NH Card, Industrial Bank of Korea and Standard Chartered Bank Korea. We engage in joint marketing efforts to promote cards issued pursuant to our co-branding agreements. However, we typically do not assume credit risks related to the inability of cardholders to make payments on their card usage, which are typically assumed by the member companies. We also provide ancillary outsourcing services to various other banks, securities companies and financial institutions that do not issue co-branded cards with us. We charge commissions for merchant fees paid by merchants to credit card companies for processing transactions. Merchant fees vary depending on the type of merchant and the total transaction amounts generated by the merchant. In addition to merchant fees, we receive commissions related to nominal interchange fees for international card transactions, as well as service fees from financial institutions that outsource their credit card business operations. Kbank Kbank is one of three Internet-only banks in Korea. Internet-only banks generally operate without branches and conduct their operations primarily through electronic means, which enable them to minimize costs and offer customers higher interest rates on deposits as well as lower lending rates. As of December 31, 2025, Kbank had approximately 15.5 million account holders, with total deposits of W28.4 trillion and outstanding loans of W18.4 trillion. Other shareholders of Kbank include Woori Bank, a leading bank in Korea. Pursuant to the Act on Special Cases Concerning Internet-Only Banks, starting from January 2019, a company with its ICT assets comprising more than 50% of its total assets (such as us) may obtain up to a 34.0% interest in an Internet-only bank, and is required to obtain approval from the FSC in order to become its largest shareholder. 25 Table of Contents Other Businesses We also engage in various business activities that extend beyond telecommunications and financial services, including real estate development. Our other businesses accounted for 15.2% of our operating revenue in 2025. Information Technology and Network Services Digital transformation has increased in recent years. Leveraging our (i) data communications networks, (ii) infrastructure operational know-how and (iii) big data analytics capabilities, we believe that we are well-positioned to take advantage of the attractive opportunities in this era of digital transformation. We offer a broad array of information technology and network services to our corporate and other institutional customers under our “KT Enterprise” brand. Our range of systems integration services includes consulting, designing, building and maintaining systems and communication networks that satisfy the individual needs of our customers in the public and private sectors. We also provide one-stop global ICT services specifically targeting multinational corporations and international agencies, which range from ICT infrastructure design and buildout to operational solutions that address their multinational needs. In addition, we provide consulting services to optimize energy consumption by corporate and other institutional customers, as well as security surveillance services ranging from buildout of monitoring systems to dispatching of security personnel. We also offer a wide range of “KT AX platform” services for our corporate and other institutional customers that provide customized and integrated digital transformation services that address their technical infrastructure, platform and solution needs. Information Data Center and Cloud Services We operate Internet data centers located throughout Korea and provide a wide range of computing services to companies that need servers, storage and leased lines. In April 2022, we completed a vertical spin-off of our Internet data centers business and established a wholly-owned subsidiary, kt cloud Co., Ltd., (“kt cloud”) to more effectively promote the growth of our Internet data center and cloud operations. As of December 31, 2025, we held an 86.3% interest in kt cloud. Data centers are facilities used to house, protect and maintain network server computers that store and deliver Internet and other network contents. kt cloud’s data centers are designed to meet international standards, and are equipped with temperature and humidity control systems, regulated and reliable power supplies, mechanical equipment, fire detection and suppression equipment, security monitoring and wide-bandwidth connections to the Internet. kt cloud’s data center businesses include (i) colocation services (provision of infrastructure services necessary for clients’ server operations), (ii) interconnection services (direct private connections of counterparties, including global cloud service providers), (iii) DBO (design, build and operation) services for clients’ data centers and (iv) managed service provider offerings (operation and maintenance of information technology equipment). kt cloud also provides a wide range of cloud services that are tailored to address specific needs of its customers in public and private sectors. kt cloud’s cloud businesses include (i) customized cloud infrastructure services for government institutions and major enterprises, (ii) CDN (content delivery network) services offering geographically distributed and interconnected servers for enhanced data traffic and content delivery, (iii) private cloud computing services with infrastructure dedicated to a single customer and (iv) marketplace platform services that enable users to access SaaS (software as a solution) services of various partners of kt cloud. Real Estate Development We own land and real estate in various locations throughout Korea. Technological developments have enhanced the coverage area of telecommunications facilities, which enable us to better utilize our existing land and other real estate holdings. Through our wholly-owned subsidiary KT Estate, we engage in the planning and development of residential complexes and commercial buildings on our unused sites, as well as in the leasing of buildings we own. Under the “Remark VILL” brand, we also lease units in residential complexes developed by us in urban areas such as Seoul and Busan. 26 Table of Contents Sale of Goods We recognize revenue related to sale of goods, primarily handsets sold to subscribers of our mobile services as well as miscellaneous telecommunications equipment sold to vendors and other telecommunications companies and sale of residential units and commercial real estate developed by KT Estate. We purchase handsets primarily from Samsung Electronics and Apple. Sale of goods accounted for 17.0% of our operating revenue in 2025. Our Rates We offer various service plans for our mobile, fixed-line and media and content services. For our individual customers, we offer rate plans targeting specific customer segments that aim to address their individual needs. We also offer bundled rate plans that provide discounts for subscribing to a combination of our services, as well as family plans that provide discounts for multiple line subscriptions under one household. For many of our services, we provide additional discounts for customers who commit to extended subscription periods. We provide an online tool designed to help our customers select a plan that is customized to their needs. Our service rates are typically charged on a monthly basis and are due at the end of the month. Our customers are also assessed a 10.0% VAT, which is included in the monthly subscription rates that we charge to our customers. Our rates for business customers are tailored to the specific needs of the business customers. Mobile Services We offer a wide range of mobile service plans that vary depending, among others, on mobile technology (5G, LTE or W-CDMA), mobile device (mobile phone, tablet or other WiFi device) and age category, under which we offer plans based on usage volume for voice calling, data transmission and text messaging as well as addition of value-added services. Our premium packages offer unlimited voice calling, data transmission and text messaging as well as additional media content. We also provide plans specially designed for elderly and young subscribers as well as special discounts to subscribers with physical disabilities or on welfare programs. We do not charge an activation fee for our mobile services. For mobile service plans that offer unlimited data transmission, we typically decelerate data transmission speeds after a subscriber reaches a set data usage threshold. For usage-based data transmission plans, our subscribers are typically charged additional data transmission fees if usage exceeds the applicable quota. However, for many of our plans, we provide our subscribers the ability to carry over unused data transmission quota of the current month to the following month, or borrow quota allocated to the following month if the current monthly quota have been exhausted. We also subsidize the purchase of new handsets by our qualifying subscribers who agree to use our service for a predetermined service period and purchase handsets on an installment basis. The following table summarizes the terms of our representative 5G and LTE mobile service plans that we currently offer: Plan MonthlyRate VoiceCalls VideoCalls Data Transmission Additional Features 5G Premium Choice ₩130,000 Unlimited 300 min. Unlimited • Unlimited data roaming at 3 Mbps•Handset insurance using reward points• No service fee for additional smart device• Free benefits (subscribers can choose one benefit from each category: 1) Tving / Netflix / YouTube Premium / Disney / Samsung / Electronics Subscription; and 2) Music / E-book / Webtoon) 27 Table of Contents Plan MonthlyRate VoiceCalls VideoCalls Data Transmission Additional Features 5G Special Choice ₩110,000 Unlimited 300 min. Unlimited • Unlimited data roaming at 100 kbps• Handset insurance using reward points• No service fee for additional smart device• Free benefits (subscribers can choose one benefit from each category: 1) Tving / Netflix / YouTube Premium / Disney / Samsung / Electronics Subscription; and 2) Music / E-book / Webtoon) 5G Special ₩100,000 Unlimited 300 min. Unlimited •Unlimited data roaming at 100 kbps•Handset insurance using reward points• No service fee for additional smart device 5G Basic Choice ₩90,000 Unlimited 300 min. Unlimited • Unlimited data roaming at 100 kbps•Free benefits (subscribers can choose one benefit among Tving / Netflix / YouTube Premium / Disney / Samsung / Electronics Subscription) 5G Basic ₩80,000 Unlimited 300 min. Unlimited •Unlimited data roaming at 100 kbps 5G Simple 110 GB ₩69,000 Unlimited 300 min. Unlimited, but decelerate to 5 Mbps after 110 GB 5G Simple 90 GB ₩67,000 Unlimited 300 min. Unlimited, but decelerate to 1 Mbps after 90 GB 5G Simple 70 GB ₩65,000 Unlimited 300 min. Unlimited, but decelerate to 1 Mbps after 70 GB 5G Simple 50 GB ₩63,000 Unlimited 300 min. Unlimited, but decelerate to 1 Mbps after 50 GB 5G Simple 30 GB ₩61,000 Unlimited 300 min. Unlimited, but decelerate to 1 Mbps after 30 GB 5G Slim 21 GB ₩58,000 Unlimited 300 min. Unlimited, but decelerate to 1 Mbps after 21 GB 5G Slim 14 GB ₩55,000 Unlimited 300 min. Unlimited, but decelerate to 1 Mbps after 14 GB 5G Slim 10 GB ₩50,000 Unlimited 300 min. Unlimited, but decelerate to 400 kbps after 10 GB 5G Slim 7 GB ₩45,000 Unlimited 300 min. Unlimited, but decelerate to 400 kbps after 7 GB 5G Slim 4 GB ₩37,000 Unlimited 300 min. Unlimited, but decelerate to 400 kbps after 4 GB Data On Premium ₩89,000 Unlimited 300 min. Unlimited •Handset insurance using reward points• No service fee for additional smart device•Media package offering music, e-book and audio books. Data On Video Plus ₩69,000 Unlimited 300 min. Unlimited, but decelerate to 5 Mbps after 110 GB LTE Basic ₩33,000 Unlimited 50 min. 1.4 GB with an option to transfer data from and into the next month’s usage In addition to our mobile service plans, we offer value-added services for additional monthly fees that can be added to the subscription such as media packages, mobile TV packages, additional data transmission packages, caller ID, music service packages and ring tone services and usage reporting services. We also offer fixed-rate international roaming plans that provide data roaming services in various countries around the world, which may be scheduled or automatically activated upon access from an overseas location. 28 Table of Contents Our mobile services also generate interconnection charges and expenses. For a call initiated by a mobile subscriber of one of our competitors to our mobile subscriber, the competitor collects from its subscriber its normal rate and remits to us a mobile-to-mobile interconnection charge. In addition, for a call initiated by our mobile subscriber to a mobile subscriber of one of our competitors, we collect from our subscriber our normal rate and remit to the competitor a mobile-to-mobile interconnection charge. The following table shows the interconnection charge per minute (exclusive of VAT) for mobile to mobile calls, which are uniform across the three mobile operators (us, SK Telecom and LG U+): Effective Starting January 1, 2023 January 1, 2024 January 1, 2025 ₩ 9.2 ₩ 8.6 ₩ 8.2 Fixed-line Services Fixed-line Telephone Services Local and Domestic Long-distance. Our standard usage-based fixed-line telephone service plan consists of a base monthly rate of ￦5,720 and usage fees for local and domestic long-distance calls, as well as calls to VoIP phones and mobile phones. We charge ￦42.9 per three-minute increment for local calls, ￦15.95 per ten second increment for domestic long-distance calls, ￦53.9 per three-minute increment for calls to VoIP phones and ￦15.95 per ten second increment for calls to mobile phones. All usage-based fees are subject to discounts during certain low-usage periods of the day and on national holidays. The rates we charge for local calls are required to be reported to the MSIT, which has 15 days to object to such changes. For our subscribers who are initiating fixed-line telephone services, we charge a one-time nonrefundable activation fee of ￦36,000. Calls to mobile phones are not included in the free 50 hours, and we charge ￦14.50 per ten second increment for such calls. For a premium plan with a base monthly fee of ￦16,500 (or ￦11,550 for a three year subscription commitment), calls to KT mobile subscribers are included as part of the free 50 hours. International Long-distance. For our international long-distance services, fees for out-going calls vary based on the destination country and whether the user has subscribed to an international long-distance services plan, which can be customized based on the type of telecommunication device (mobile or fixed-line), destination countries and other customer preferences. Usage is typically measured in one-second increments. We pay a settlement fee to the relevant foreign carrier for such calls under a bilateral agreement with the foreign carrier. For incoming calls (including those placed in Korea by customers of the foreign carriers for home country direct-dial services), we receive settlement payments from the relevant foreign carrier at the applicable settlement rate specified under the relevant bilateral agreement. Land-to-mobile Interconnection. We provide other telecommunications service providers, including mobile operators and other fixed-line operators, interconnection to our fixed-line network. For a call initiated by a landline user to a mobile service subscriber, we collect from the landline user the land-to-mobile usage charge and remit to the mobile service provider a land-to-mobile interconnection charge. We recognize as land-to-mobile interconnection revenue the entire amount of the usage charge collected from the landline user and recognize as expense the amount of interconnection charge paid to the mobile service provider. The MSIT periodically issues orders setting the interconnection charge calculation method applicable to interconnections with mobile service providers. The MSIT determines the land to mobile interconnection charge by calculating the long run incremental cost of mobile service providers, taking into consideration technology development and future expected costs. The following table shows the interconnection charge we paid per minute (exclusive of VAT) to mobile operators for landline to mobile calls: Effective Starting January 1, 2023 January 1, 2024 January 1, 2025 ₩ 9.2 ₩ 8.6 ₩ 8.2 29 Table of Contents Land-to-land and Mobile-to-land Interconnection. For a call initiated by a landline subscriber of our competitor to our fixed-line user, the landline service provider collects from its subscriber its normal rate and remits to us a land-to-land interconnection charge. In addition, for a call initiated by a mobile service subscriber to our landline user, the mobile service provider collects from its subscriber its normal rate and remits to us a mobile-to-land interconnection charge. The following table shows such interconnection charge per minute collected for a call depending on the type of call, as determined by the MSIT: Effective Starting January 1, 2023 January 1, 2024 January 1, 2025 Local access (1) ₩ 6.3 ₩ 6.2 ₩ 6.0 Single toll access (2) 7.2 6.9 6.7 Double toll access (3) 10.1 9.1 9.1 _______________________ Source: The MSIT. (1)Interconnection between local switching center and local access line. (2)Interconnection involving access to single long-distance switching center. (3)Interconnection involving access to two long-distance switching centers. VoIP Telephone Services Our VoIP telephone services offer rate plans that charge generally lower base monthly rates and usage-based fees compared to our fixed-line telephone services. For our subscribers who are initiating VoIP telephone services, we charge a one-time nonrefundable activation fee of ￦36,000, which may be waived if the subscriber opts for self-installation. Broadband Internet Access Services We offer various broadband Internet access service plans based on data transmission speed and data usage thresholds and offer discounts based on length of commitment that are applied for periods of up to four years. Most of our plans also include WiFi routers that enable our subscribers to create a WiFi environment in their residences. We charge our customers a one-time installation fee per site of ￦27,500. We also charge a modem rental fee ranging from ￦4,400 to ￦22,000 per year that varies depending on the type of model required for the service plan, which is also subject to discounts and waivers based on length of subscription commitment period. The following table summarizes the terms of our representative broadband Internet access service plans that we currently offer. Plan Monthly Rate Rate with 3 Year Term Maximum Speed Max SpeedDaily Limit (1) Additional Features Internet Super Premium ₩ 110,000 ₩ 88,000 10 Gbps 1000 GB 2 WiFi routers included. Internet Premium Plus ₩ 82,500 ₩ 60,500 5 Gbps 500 GB 2 WiFi routers included. Internet Premium ₩ 60,500 ₩ 44,000 2.5 Gbps 250 GB Discount on 1 WiFi router rental. Internet Essence ₩ 55,000 ₩ 38,500 1.0 Gbps 150 GB Internet Slim ₩ 39,600 ₩ 22,000 100 Mbps None _______________________ (1)Data transmission speed is reduced to 100 Mbps if data usage exceeds the specified maximum speed daily limit. Media and Content Services Our IPTV and satellite TV service plans vary based on the package of media channels provided, availability of UHD channels and the inclusion of other value-added services. In addition to monthly rates for subscription, we charge a one-time installation fee of ￦34,100 per set-top box and a digital set-top box rental fee ranging from ￦7,700 to ￦22,000 that varies depending on the type of set-top box required for the service 30 Table of Contents plan, which is also subject to discounts and waivers based on length of subscription commitment period. We also offer various video-on-demand contents for streaming and downloading for a fee. The following table summarizes the terms of our representative IPTV service plans that we currently offer: Plan Monthly Rate Rate for 3 Year Term Channels (UHD) Additional Features Genie tv NETFLIX Choice UHD ₩42,300 ₩35,480 266 (6) • Genie tv Essence and NETFLIX premium service NETFLIX Choice HD ₩38,800 ₩31,980 266 (6) • Genie tv Essence and NETFLIX standard service Disney+All G ₩36,630 ₩28,100 250 (6) • Genie tv All G and Disney+ service SuperPack Choice ₩36,300 ₩29,480 266 (6) • Genie tv Essence and free movie, drama and animation contents VOD Choice ₩31,020 ₩24,816 266 (6) • Genie tv Essence and monthly coupon of ￦10,000 for video-on-demand Essence Plus ₩28,160 ₩22,484 266 (6) • Genie tv Essence and monthly coupon of ￦5,000 for video-on-demand All G ₩26,730 ₩21,340 250 (6) • Free VOD contents and movie Essence ₩25,300 ₩20,240 266 (6) Lite ₩19,800 ₩15,840 240 (3) Basic ₩18,150 ₩14,740 236 (3) Slim ₩16,500 ₩13,200 220 (3) Genie tv skylife Entertainment ₩31,020 ₩24,816 228 (6) • Monthly coupon of ￦10,000 for video-on-demand. Slim ₩16,500 ₩13,200 220 (6) Bundled Rate Plans In order to provide our customers with additional value and further promote our marketing efforts to cross sell our various services, we provide our customers with various bundled rate plans that provide discounts for subscribing to a combination of our services, as well as family plans that provide discounts for multiple line subscriptions under one household. The majority of our subscribers participate in our bundled rate plans. Fixed-line Packages We offer substantial discounts to customers who subscribe to two or more of our fixed-line and TV services consisting of fixed-line telephone, VoIP telephone, broadband Internet access, IPTV and satellite TV services. Subscription payments collected pursuant to our bundled rate plans are allocated to each service. Mobile Packages For our mobile services, we offer family plans that provide monthly discounts of up to ￦22,110 per mobile phone subscription. Up to five members of a household may participate in our family plans. Fixed-line and Mobile Combination Packages We also offer various bundled rate plans that combine our fixed-line and TV services with mobile services, for both households and single subscribers. For households that subscribe to broadband Internet access as well as mobile services, our premium family plan provides discounts of approximately 50% for broadband Internet access subscription as well as for mobile services of each additional family member (up to four additional members). 31 Table of Contents Competition We face significant competition in each of our principal business areas. In the markets for mobile services, fixed-line services and media and content services, we compete primarily with SK Telecom and LG U+ (including their affiliates). Over time, considerable consolidation in the telecommunications industry has occurred, resulting in the current competitive landscape comprising three network service providers that offer a wide range of telecommunications and data communications services. In recent years, each of our primary competitors has acquired a leading cable TV operator in Korea to significantly increase their market shares in the pay TV market, which has further intensified competition. To a lesser extent, we also compete with various value-added service providers and network service providers as classified under the Framework Act on Telecommunications and the Telecommunications Business Act, including MVNOs that lease mobile networks and offer mobile services, VoIP service providers that offer Internet telephone services, cable TV operators, text messaging service providers (particularly Kakao) and voice resellers, many of which offer competing services at lower prices. We also face changes in the evolving landscape of the market for media and content services arising from the increasing popularity of global OTT media services such as Netflix. In January 2023, the MSIT announced plans to encourage a fourth service provider to enter the Korean mobile service market by awarding a bandwidth license for the use of the 28 GHz spectrum and provide various measures to support the competitiveness of the new market entrant. In January 2024, Stage X, a consortium led by Stage Five, won the auction for 800 MHz of bandwidth license on the 28 GHz spectrum. However, in July 2024, the MSIT revoked Stage X’s bandwidth allocation, citing its failure to meet certain regulatory requirements for the license, and announced plans to facilitate the entry of new service providers in the future. We compete primarily based on our service performance, quality and reliability, ability to accurately identify and respond to evolving consumer demand, and pricing. Mobile service providers also grant subsidies or subscription discount rates to subscribers who purchase new handsets and agree to a minimum subscription period, and we compete also based on such amounts. The repeal of the Mobile Device Distribution Improvement Act may have a material impact on the competitive landscape of the mobile telecommunications industry, as mobile service providers are given more flexibility to offer handset subsidies or discounts, which may in turn increase expenses. See “Item 3.D. Risk Factors—Risks Relating to Our Business— The Korean telecommunications and Internet-related industries are subject to extensive Government regulations, and changes in Government policy relating to these industries could have a material adverse effect on our operations and financial condition.” We and SK Telecom have been designated as market-dominating business entities in the local telephone and mobile markets, respectively, under the Telecommunications Business Act. Under this Act, a market-dominating business entity may not engage in any act of abuse, such as unreasonably interfering with business activities of other business entities, hindering unfairly the entry of newcomers or substantially restricting competition to the detriment of the interests of consumers. In addition, changes in our local telephone rates and mobile rates of SK Telecom are required to be reported to the MSIT, which has 15 days to object to such changes. The KMCC has also issued guidelines on fair competition of the telecommunications companies. In line with these guidelines, from May to September 2024, the KMCC conducted its first compliance review of network usage agreements between telecommunications carriers and value-added service providers. As of the date hereof, we have not received any feedback or indication that any further action will be taken as a result of the review. In the financial services market, our credit and check cards issued under the “BC Card” brand pursuant to co-brand agreements with member companies compete principally with cards issued by other leading credit card companies in Korea with their own merchant payment networks, such as Shinhan Card, Hyundai Card and Samsung Card. Our member companies that issue co-branded credit or check cards include NH Card, Industrial Bank of Korea and Standard Chartered Bank Korea. We also compete with service providers that provide outsourcing services related to business operations of credit card companies. Competition in the credit card and check card businesses has increased substantially as existing credit card companies, consumer finance companies and other financial institutions in Korea have made significant investments and engaged in aggressive marketing campaigns and promotions for their credit and check cards, as well as investing in operational infrastructure that may reduce the need for our outsourcing services. 32 Table of Contents The following tables show the market shares in our principal markets in terms of subscribers as of the dates indicated: Mobile Services Market Share (%) (1) KT Corporation SK Telecom LG U+ December 31, 2023 28.5 48.4 23.1 December 31, 2024 28.2 48.7 23.1 December 31, 2025 28.9 47.3 23.8 _______________________ Source: The MSIT. (1)Calculated in terms of the number of MNO mobile phone subscribers (not including MVNO mobile subscribers and subscribers of miscellaneous devices such as tablets and other IoT devices). Fixed-line Local Telephone and VoIP Services Market Share (%) KT Corporation SK Broadband LG U+ Others December 31, 2023 (1) 54.2 15.7 17.0 13.1 December 31, 2024 (1) 53.7 15.8 16.7 13.8 December 31, 2025 (1) 51.7 15.6 16.5 16.2 _______________________ Source: Korea Telecommunications Operators Association. (1)Calculated in terms of an aggregation of the retail and corporate subscribers of (i) the three major network service providers and (ii) other fixed-line telecommunications service providers that co-use our fixed-line telecommunications infrastructure. Broadband Internet Access Services Market Share (%) KT Corporation SK Broadband LG U+ Others December 31, 2023 40.8 28.7 21.4 9.1 December 31, 2024 39.8 28.6 22.6 9.0 December 31, 2025 40.3 28.7 22.1 8.9 _______________________ Source: The MSIT. IPTV Services Market Share (%) KT Corporation (1) SK Broadband LG U+ December 31, 2023 43.6 31.2 25.2 December 31, 2024 43.3 31.2 25.5 December 31, 2025 43.3 30.6 26.1 _______________________ Source: Investor relations report of each company. (1)Includes market share of IPTV services offered by KT Skylife. 33 Table of Contents Regulation Under the Framework Act on Telecommunications, the Telecommunications Business Act, the Broadcasting Act and the Radio Waves Act, the MSIT has comprehensive regulatory authority over the telecommunications industry and all network service providers. The MSIT has primary policy and regulatory responsibility for matters such as: (i) registration of network service providers and licensing of select services (the KMCC authorizes the licensing of IPTV service providers); (ii) regulation of mergers and acquisitions, as well as license suspension and termination of network service providers; (iii) providing oversight on foreign ownership ratios in network service providers; and (iv) reviewing telecommunication matters as they relate to the public interest and approving ancillary telecommunication business activities. Additionally, the MSIT is responsible for a broad range of other policy and regulatory matters, including the administration and supervision of regulatory reporting by telecommunications companies, examination and analysis of accounting and business management practices in the industry, establishment and administration of policies governing telecommunications service fees, value-added service providers and network service providers, as well as supervision of reporting requirements of standard telecommunications service/user contracts. The KMCC’s overall policy role is to play a key role in regulatory activities aimed at protecting service users in the broadcast and telecommunications market and it continues to be responsible for investigations and sanctions regarding violations by telecommunications companies, as well as for mediating disputes between service providers and users. The KMCC is established under the direct jurisdiction of the President of Korea and is comprised of seven commissioners, including one Chairperson, one Vice Chairperson, one standing commissioner and four non-standing commissioners. Commissioners of the KMCC are appointed by the President, and the appointment of the Chairperson must be approved at a confirmation hearing at the National Assembly. Under the Personal Information Protection Act, telecommunications service providers are also required to protect personal information of their customers. Generally, when a telecommunications service provider intends to collect or use its customer’s personal information, such telecommunications service provider, with certain exceptions, must notify and receive the customers’ consent in relation to the purpose of collection, the use of the collected personal information, types of personal information collected and period during which the personal information will be possessed and used. Certain exceptions for collecting or using personal information without consent came into effect on September 15, 2023 under the amended Personal Information Protection Act, which relaxed the regulations to some extent. Under the Personal Information Protection Act, any enterprise, including Korean telecommunications providers, may not use their customers’ personal information for any purpose other than the purpose their customers have consented to. In addition, there are various internal processes that the telecommunications providers are mandated to install in order to collect and handle personal information of their customers. The KMCC also has the authority to regulate the pay TV market, including IPTV services. Under the Internet Multimedia Broadcasting Services Act, anyone intending to engage in the Internet multimedia broadcasting business must obtain a license from the KMCC. The ownership of the shares of an Internet multimedia broadcasting company by a newspaper, a news agency or a foreigner is limited. Rates Under current regulations implementing the Telecommunications Business Act, a network service provider may set its rates at its discretion, although it must report to the MSIT the rates and the general terms and conditions for each type of network service provided by it. However, the MSIT may object to the rates set by a market-dominating business entity within 15 days from the date of receipt of such report if there is a high risk of (i) harming the users’ interests (including unfair discrimination against specific users based on contract length and usage volume with such service provider), (ii) harming fair competition (including the provision of telecommunication services at unfair rates compared to the wholesale price offered by other telecommunications service providers) or (iii) unreasonably limiting the liability for damages without justifiable grounds. In 1997, we and SK Telecom were designated as market-dominating business entities for local telephone service and for mobile service, respectively, which currently remains in effect. As a result, changes in our local telephone rates and in the mobile rates of SK Telecom are required to be reported to the MSIT, which has 15 days to object to such changes. The form of our standard agreement for providing local network service and each agreement for interconnection with other service providers must also be reported to the MSIT. 34 Table of Contents The repeal of the Mobile Device Distribution Improvement Act was passed on January 21, 2025, and became effective on July 22, 2025. Prior to its repeal, the Mobile Device Distribution Improvement Act permitted subscribers to choose between a designated handset subsidy for the purchase of a recently released mobile phone or a designated discount on the mobile service subscription rate. Following the repeal, the obligation for mobile carriers to disclose handset subsidies, as well as the regulation limiting additional subsidies provided by retailers to within 15% of the disclosed subsidy, have been abolished. As a result, mobile service providers are permitted to offer greater subsidies to subscribers who switch service providers, based on specific criteria designated by the KMCC, such as estimated profit margins and subscriber switching costs. The repeal of the Mobile Device Distribution Improvement Act may have a material impact on the competitive landscape of the mobile telecommunications industry, as mobile service providers are given more flexibility to offer handset subsidies or discounts, which may in turn increase expenses. In addition, the MSIT may periodically announce policy guidelines that telecommunications companies are recommended to take into consideration in their telecommunications and Internet-related businesses. Other Activities A network service provider, such as us, must obtain the permission of the MSIT in order to: •modify its licenses; •discontinue, suspend or spin off all or a part of the business for which it is licensed; •transfer or acquire all or a part of the business of another network service provider; or •enter into a merger with another network service provider. By submitting a report to the MSIT, a network service provider may enter into arrangements for services to be furnished to its customers by a different telecommunications service provider and, in connection therewith, may provide its telecommunications services to, or authorize the use of all or a portion of its telecommunications facilities by, such other telecommunications service provider. The MSIT can revoke our licenses or order the suspension of any of our businesses if we do not comply with the regulations of the MSIT under the Telecommunications Business Act. The responsibilities of the MSIT include: •drafting and implementing plans for developing telecommunications technology; •fostering and providing guidance to institutions and entities that conduct research relating to telecommunications; and •recommending to network service providers that they invest in research and development or that they contribute to telecommunications research institutes in Korea. In addition, all network service providers (other than regional paging service providers) are obligated to contribute toward the supply of “universal” telecommunications services in Korea. Telecommunications service providers designated as “universal service providers” by the MSIT are required to provide universal telecommunications services such as local services, local public telephone services, broadband services, discount services for persons with disabilities and for certain low-income persons, telecommunications services for remote islands and wireless communication services for ships. We have been designated as a universal service provider. The costs and losses recognized by universal service providers in connection with providing these universal telecommunications services, except for discount services for persons with disabilities and for certain low-income persons, will be shared on an annual basis by all network service providers (other than regional paging service providers), including us, on a pro rata basis based on their respective net annual revenue calculated pursuant to a formula set by the MSIT. As for the costs and losses recognized by a universal service provider in connection with providing discount services for persons with disabilities and for certain low-income persons, such costs and losses will be borne by such universal service provider. 35 Table of Contents Prior to April 2018, in accordance with the MSIT’s determination that we possessed essential infrastructure, we were required to permit other fixed-line communications service providers to co-use our fixed-line telecommunication infrastructure, upon the request of such other fixed-line telecommunications service providers. Subsequently, to facilitate expedient establishment of 5G mobile services infrastructure, the Government amended the co-use system as follows: (i) we should permit not only fixed-line telecommunications service providers, but also mobile service providers such as SK Telecom and LG U+ to co-use our telecommunications infrastructure necessary for provision of 5G mobile services, (ii) the Government determined that we, SK Telecom, SK Broadband and LG U+ possessed essential infrastructure with respect to the interval between the cable entry at a building and the initial occurrence of connection within the building and required that the three companies share such infrastructure throughout buildings in Korea with each other, and (iii) fixed-line telecommunications service providers and mobile service providers are required to participate in joint efforts to construct additional fixed-line and mobile network architecture. For more information on our mobile network architecture, see “Item 4.D. Property, Plant and Equipment—Mobile Networks.” In addition, we are required to lease to other companies our fixed-lines that connect subscribers to our network. This system, which is called local loop unbundling, is intended to prevent excessive investment in local loops. This system requires us to lease the portion of our copper lines that represent our excess capacity to other companies upon their request at rates that are determined by the MSIT based on our cost, and taking into consideration an appropriate rate of return, to enable them to provide voice and broadband services. Revenue from local loop unbundling, if any, are recognized as revenue from other businesses. All telecommunications service providers must also provide compensation to their users in the following cases: (i) damage is caused to the user in connection with the service provider’s provision of telecommunication services (including from disruptions in service) and (ii) damage is caused to the user due to the reasons stated in such user’s complaint addressed to the service provider or a delay in the service provider’s processing of such complaint. However, if damage to a user is caused by force majeure, or if damage is caused intentionally by, or due to the negligence of, the user, the service provider’s liability for any compensation to such user is mitigated or absolved. In cases where the provision of telecommunication services is disrupted, the service provider must inform its user of the disruption as well as the standards and procedures for obtaining compensation for any damages. In addition, if the number of users and the network traffic of a value-added service provider exceeds a certain threshold set by the MSIT, such value-added service provider must secure adequate measures to provide stable services to its users, which may require cooperation with other network service providers. According to an amendment to the Telecommunications Business Act effective July 2023, a value-added service provider that (i) averages greater than one million domestic users per day during the last three months of the preceding year and (ii) records domestic communication traffic volume equivalent to at least one hundredth (1/100) of the total average daily domestic traffic volume transmitted over information and communications networks used by facilities-based telecommunications service providers to provide internet services during the same three-month period of the preceding year is obligated, among other things, to submit to the MSIT information regarding the status and its plans on measures to provide stable services, on an annual basis. Furthermore, the amended Enforcement Decree of the Telecommunications Business Act, which took effect on February 12, 2026, imposes additional obligations on value-added service providers that meet the above criteria, including: (i) operating both an online and a telephone automated response system, (ii) processing user requests in real-time and in Korean during business hours, and (iii) if real-time processing is not feasible, addressing user requests within three business days from the date of receipt. If there are justifiable reasons for not completing the process within this timeframe, the user must be informed of the reason and provided with a processing schedule. Furthermore, pursuant to an amendment to the Telecommunications Business Act in December 2023, which became effective on June 30, 2024, a network service provider that exceeds certain thresholds set forth in the Enforcement Decree is obliged to make efforts to provide stable services by (i) taking certain technical and managerial measures, such as vulnerability analysis and assessment, and the management and monitoring of core equipment, (ii) submitting the implementation results of the technical and managerial measures to the MSIT and (iii) disclosing an annual report on the stability of its network services. Such thresholds are set forth in the amendment to the Enforcement Decree of the Telecommunications Business Act, which took effect on June 28, 2024. Under the Enforcement Decree, network service providers with annual network service sales of at least ￦1 trillion and either at least 100,000 subscribers or 500,000 lines must implement technical and managerial measures. They may be required to submit implementation results by 36 Table of Contents January 31 and must publish an annual service stability report on their website by June 30. Additionally, effective February 12, 2026, facilities-based network service providers that meet either (i) annual telecommunications service sales of at least ￦1 trillion, or (ii) at least 100,000 subscribers or 500,000 lines as of the end of the preceding year, must take appropriate technical and managerial measures to ensure stable services, submit the implementation results of these measures to the MSIT, and publicly disclose reports regarding their actions taken to maintain service stability. In addition, the amended Telecommunications Business Act, which took effect on September 19, 2025, introduced and enhanced regulatory measures to prevent crimes involving illegal spam, including establishing a legal basis for a sender qualification certification system for bulk messaging service providers and requiring regular inspections (at least once every year) to verify compliance with registration requirements. Bulk messaging service providers that were registered under the previous law were required to obtain sender qualification certification and comply with the registration requirements in accordance with the amended Act within six months from its effective date, and are currently subject to the ongoing requirements thereunder. Foreign Investment The Telecommunications Business Act restricts the ownership and control of network service providers by foreign shareholders. Foreigners (based on citizenship), foreign governments and “companies deemed as foreigners” may not in the aggregate own more than 49.0% of the issued shares with voting rights of a network service provider, including us. For purposes of the Telecommunications Business Act, the term “company deemed as a foreigner” means a company in which a foreigner or a foreign government is the largest shareholder and holds 15.0% or more of the company’s shares with voting rights, provided, however, that such company will not be counted as a foreign shareholder for the purposes of the 49.0% limit if (1) it holds less than 1.0% of our total issued and outstanding shares with voting rights or (2) if the MSIT determines that the fact that such foreign government or entity holds a 15.0% or greater shareholding in such company does not present a risk of harm to the public interest. Notwithstanding the above, pursuant to an amendment to the Telecommunications Business Act that became effective in April 2022, a company, so long as (i) its largest shareholder (determined by aggregating the shareholdings of such shareholder and its related parties) is a foreign government or a foreigner of a country that has entered into a bilateral or multilateral free trade agreement with Korea that is designated by the MSIT, and (ii) such shareholder (together with the shareholdings of its related parties) owns 15.0% or more of the issued voting stock of such entity, may own more than 49.0% of our issued shares with voting rights but may not exercise its voting rights with respect to the shares held in excess of the 49.0% ceiling until the conclusion of the MSIT’s public interest review. Furthermore, this exemption from the restriction of foreign ownership of a network service provider beyond the 49.0% threshold applies not only to a foreign government or a foreigner from an FTA Country but also to a foreign government or a foreigner from an OECD country. In addition, the calculation of the above-referenced 49% ceiling applies to: (x) any foreign entities that have entered into a major management-related agreement with a network service provider or the shareholder(s) thereof; and (y) foreign entities that have entered into an agreement pertaining to the settlement of fees relating to the handling of international electronic telecommunications services. As of December 31, 2025, 49.0% of our common shares were owned by foreign investors. In the event that a network service provider violates the shareholding restrictions, its foreign shareholders cannot exercise voting rights for their shares in excess of such limitation, and the MSIT may require corrective measures be taken to comply with the ownership restrictions. In addition to the 49.0% limit referenced above, under the Telecommunications Business Act, a foreign shareholder who holds 5.0% or more of our total shares is prohibited from becoming our largest shareholder. In addition, under the Telecommunications Business Act, the MSIT may, if it deems it necessary to preserve substantial public interests, prohibit a foreign shareholder from being our largest shareholder. In the event that any foreigner or foreign government acquires our shares in violation of the above provisions, the Telecommunications Business Act restricts such foreign shareholder from exercising his or her voting rights with respect to common shares exceeding such threshold. The MSIT may also order us or the foreign shareholder to take corrective measures in respect of the excess shares within a period of up to six months. 37 Table of Contents Customers and Customer Billing We typically charge residential subscribers and business subscribers similar rates for services provided. On a case-by-case basis, we also provide discount rates for some of our high-volume business subscribers. We bill all of our customers on a monthly basis. Our customers may make payment at either payment points such as local post offices, banks or our service offices, through a direct-debit service that automatically deducts the monthly payment from a subscriber’s designated bank account, or through a direct-charge service that automatically charges the monthly payment to a subscriber’s designated credit card account. Approximately 90.0% of our subscribers as of December 31, 2025 pay through the direct-debit service. Accounts of subscribers who fail to pay our invoice are transferred to a collection agency, which sends out a notice of payment. If such charges are not paid after notice, we cease to provide outgoing service to such subscribers after a period of time determined by the type of subscribed service. If charges are still not paid two to three months after outgoing service is cut off, we cease all services to such subscribers. After service is ceased, the overdue charges that are not collected by the collection agency are written off. Credit Card Business Through BC Card in which we held a 69.5% interest as of December 31, 2025, we offer various credit card processing and related financial services. BC Card is regulated and supervised as a Specialized Credit Financial Business (“SCFB”), as defined under the Specialized Credit Financial Businesses Act of Korea (“SCFBA”). The SCFBA subjects SCFB companies to licensing (for credit card businesses) and registration (for leasing, installment finance or new technology finance businesses) requirements and provides guidance and restrictions regarding capital adequacy, liquidity ratios, loans to major shareholders, reporting and other matters relating to the supervision of SCFB companies. The SCFBA delegates regulatory authority over SCFB companies to the FSC and FSS. The FSC has the authority to suspend the operations of an SCFB company for up to six months for non-compliance with certain regulations under the SCFBA and issue certain administrative orders. The FSC is also entitled to cancel a license or registration if an SCFB company fails to comply with certain SCFBA regulations or FSC administrative orders, including a suspension order. The SCFBA and the regulations thereunder require an SCFB company to satisfy a minimum paid-in capital amount of (i) ￦20 billion, where the SCFB company engages in no more than two kinds of core businesses and (ii) ￦40 billion, where the SCFB company, such as BC Card, engages in three or more kinds of core businesses. An SCFB engaging in a credit card business must maintain a total Tier I and Tier II capital adequacy ratio (adjusted equity capital divided by adjusted total assets) of 8% or more. In addition, an SCFB company must maintain a one-month-or-longer delinquent claim ratio (delinquent claims divided by total claims) of less than 10%. Under the SCFBA and the regulations thereunder, an SCFB company is required to maintain a Won liquidity ratio (Won-denominated current assets divided by Won-denominated current liabilities) of 100% or more. In addition, if an SCFB company is registered as a foreign exchange business institution with the MOFE, such SCFB company is required to maintain (1) a foreign-currency liquidity ratio (foreign currency liquid assets due within three months divided by foreign-currency liabilities due within three months) of not less than 80%, (2) a ratio of foreign currency liquid assets due within seven days less foreign currency liabilities due within seven days, divided by total foreign-currency assets, of not less than 0%, and (3) a ratio of foreign currency liquid assets due within a month less foreign currency liabilities due within a month, divided by total foreign-currency assets, of not less than negative 10%. Under the SCFBA and the regulations thereunder, an SCFB company may not provide loans in the aggregate exceeding 50% of its equity capital to its major shareholders (including their specially related persons). Pursuant to the SCFBA and the regulations thereunder, an SCFB company is required to submit business reports to the FSC regarding, among others, financial statements, actual results of management and soundness of assets. An SCFB company is also required to provide information regarding specific matters, including: (i) the amount of loans provided to major shareholders as of the end of each quarter; (ii) changes in the aggregate amount of such loans and the terms and conditions of the credit extension transactions for each quarter; (iii) the amount of stocks acquired by major shareholders as of the end of each quarter; and (iv) changes in the aggregate amount of stocks held and the acquisition price of such stocks for each quarter, in each case within one month of the end of each quarter. In addition, an SCFB company is required to file a report to the FSC upon the occurrence of certain events, including (i) changes to its name; (ii) changes to the largest 38 Table of Contents shareholder; or (iii) changes of 1% or more in the ownership of stocks with voting rights held by a major shareholder and such major shareholder’s specially related persons, in each case within seven days from the date of its occurrence. Insurance We carry insurance against loss or damage to all significant buildings and automobiles. Except for our insurance coverage of our satellites and data centers, we do not carry insurance covering losses to outside plants or to equipment because we believe the cost of such insurance is excessive and the risk of material loss or damage is insignificant. We do not have any provisions or reserves against such loss or damage. We do not carry any business interruption insurance. We provide co-location and a variety of value-added services including server-hosting services to a number of corporations whose business largely depends on critical data operated on our servers or on their servers located at our data centers. Any disruptions, interruptions, physical or electronic data loss, delays or slowdowns in communication connections could expose us to potential liabilities for losses relating to the disrupted businesses of our customers relying on our services. Information Technology and Operational Systems Enhancement of our information technology and operational systems and efficient utilization of such systems are important in effectively promoting our core strategies. We are committed to continually investing in and enhancing our information technology systems, which provide support to many aspects of our businesses. In June 2017, we implemented KT One System (“KOS”), a wired/wireless system integration program that unified wired/wireless workflows, structures and systems that had been separated previously. We have continued to enhance and expand KOS since its initial implementation. In March 2025, we completed the integration of our remaining fixed-line products that had been operated on a separate system into KOS, resulting in a fully integrated wired/wireless system. KOS has contributed to enhancing various aspects of our business processes and control systems. Patents and Licensed Technology The ability to obtain and protect intellectual property rights to the latest telecommunications technology is important for our business. We own or have licenses to various patents and trademarks in Korea and overseas, and have applications for patents pending in Korea and other select countries such as the United States, Europe, China and Japan. A majority of our patents registered in Korea and overseas relate to our wireless and fixed-line telecommunications, media services and technologies related to IoT and AI. In addition, we operate several research and development (“R&D”) laboratories to develop latest technology and additional platforms, as described in “Item 5.C. Research and Development, Patents and Licenses, Etc.” We license our intellectual property rights to third parties in return for periodic royal payments. We currently do not license any material technologies or patents from third parties. Seasonality of the Business Our main business generally does not experience significant seasonality. Item 4.C.  Organizational Structure These matters are discussed under Item 4.B. where relevant. Item 4.D.  Property, Plant and Equipment Our principal fixed asset consists of our integrated telecommunications networks. In addition, we own buildings and real estate throughout Korea. As of December 31, 2025, the net book value of our property and equipment was W14,258 billion, of which W4,020 billion is accounted for by the net book value of our land, buildings and structures. As of December 31, 2025, the net book value of our investment properties, which is accounted for separately from our property and equipment, was W2,872 billion. Other than as may be described in this annual report, no significant amount of our properties is leased. There are no material encumbrances on our properties including the fixed assets below. 39 Table of Contents Mobile Networks Our mobile network architecture includes the following components: •cell sites, which are physical locations equipped with radio units of base transceiver stations and other equipment used to communicate through radio channels with subscribers’ mobile telephone handsets within the range of a cell; •centralized centers, which are physical locations with baseband units of base transceiver stations; •core networks, which connect to and control the base transceiver stations and provide the gateway to other networks and services; and •transmission lines, which connect the mobile switching centers, base station controllers, base transceiver stations and the public switched telephone network. One of the principal limitations on a wireless network’s subscriber capacity is the amount of bandwidth allocated to a service provider. We have acquired a number of bandwidth licenses to secure additional bandwidth capacity to provide our broad range of services, for which we typically make an initial payment as well as pay usage fees during the license period. See “Item 5. Operating and Financial Review and Prospects—Item 5.A. Operating Results—Overview—Acquisition of New Bandwidth Licenses and Usage Fees.” Exchanges Exchanges include local exchanges and “toll” exchanges that connect local exchanges to long-distance transmission facilities. We had approximately 18.8 million lines connected to local exchanges and 2.2 million lines connected to toll exchanges as of December 31, 2025. All of our exchanges are fully digital and automatic in order to provide higher speed and larger volume services. In addition, all of our lines connected to toll exchanges are compatible with IP platforms. Internet Backbone Our Internet backbone network, called KORNET, has the capacity to handle aggregate traffic of our broadband Internet access subscribers, data centers and Internet exchange system at any given moment of up to 59.8 Tbps as of December 31, 2025. Our IP premium network enables us to more reliably support our IPTV, VoIP and other IP-related services. As of December 31, 2025, our IP premium network had capacity of 6.5 Tbps to support LTE data, IPTV, voice and virtual private network (“VPN”) service traffic. In addition, our 5G backbone network had capacity of 5.6 Tbps to support 5G data service traffic. Access Lines As of December 31, 2025, we had 26.6 million access lines installed, which allow us to reach virtually all homes and businesses in Korea. As of December 31, 2025, we had approximately 26.0 million broadband lines with speed of at least 50 Mbps that enable us to deliver broadband Internet access and multimedia contents to our customers. Transmission Networks Our domestic fiber optic cable network consisted of 968,465 kilometers of fiber optic cables as of December 31, 2025, of which 137,188 kilometers of fiber optic cables are used to connect our backbone network and 831,277 kilometers are used to connect the backbone network to our subscribers. As of December 31, 2025, our backbone network utilizes 64 Tbp Long-haul Reconfigurable Optical Add Drop Multiplexer (“ROADM”) technology for connecting cities. ROADM technology improves bandwidth efficiency by enabling data to be transmitted from multiple signals across one fiber strand in a cable and carrying each signal on a separate wavelength. Our transmission backbone network connecting major cities in Korea utilize Packet 40 Table of Contents Optical Transport Network (“POTN”), and we access such network through multi-service provisioning platform (“MSPP”) architecture. Our extensive domestic long-distance network is supplemented by our fully digital domestic microwave network, which consisted of 52 relay sites as of December 31, 2025. International Networks Our international network infrastructure consists of both submarine cables and satellite transmission systems, including two submarine cable-landing stations in Busan and Keoje and one satellite teleport in Kumsan. International traffic is handled by submarine cables and telecommunications satellites. Because of the high cost of laying a submarine cable, the usual practice is for multiple carriers to jointly commission a new cable and share the costs and the capacity. We own interests in several international fiber optic submarine cable networks. We also operate satellites periodically launched by us, as well as lease satellite capacity from other satellite operators. Data services such as international private lease circuits, IP and very small aperture terminals are provided through submarine cables and satellite transmission. In order to guarantee high quality services to our end customers, our submarine cables and satellite transmission systems are linked to various points-of-presence in the United States, Asia and Europe. In addition, as of December 31, 2025, our international telecommunications networks were directly linked to 195 telecommunications service providers in various international destinations and are routed through our three international switching centers in Seoul, Daejeon and Busan. As of December 31, 2025, our international Internet backbone with capacity of approximately 10,970 Gbps is connected to approximately 320 Internet service and content providers through our two Internet gateways in Busan. In addition, we operate a broadcasting backbone with capacity of 0.17 Gbps to transmit broadcasting signals from Korea to the rest of the world.