KT (KT) 6-K Current report (foreign)

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

For the month of December, 2010

Commission File Number 1-14926

KT Corporation

(Translation of registrant’s name into English)

206 Jungja-dong

Bundang-gu, Sungnam

Kyunggi-do

463-711

Korea

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F  x            Form 40-F  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ¨

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes  ¨             No  x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-                    

SUMMARY OF THIRD QUARTER BUSINESS REPORT

(From January 1, 2010 to September 30, 2010)

THIS IS A SUMMARY OF THE 2010 THIRD QUARTER REPORT ORIGINALLY PREPARED IN KOREAN AND IN SUCH FORM AS REQUIRED BY THE KOREAN FINANCIAL SUPERVISORY COMMISSION. IN THE TRANSLATION PROCESS, SOME PARTS OF THE REPORT WERE REFORMATTED, REARRANGED OR SUMMARIZED FOR THE CONVENIENCE OF READERS.

UNLESS EXPRESSLY STATED OTHERWISE, ALL INFORMATION CONTAINED HEREIN IS PRESENTED ON A NON-CONSOLIDATED BASIS IN ACCORDANCE WITH ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN KOREA, OR KOREAN GAAP, WHICH DIFFER IN CERTAIN RESPECTS FROM GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN CERTAIN OTHER COUNTRIES, INCLUDING THE UNITED STATES. WE HAVE MADE NO ATTEMPT TO IDENTIFY OR QUANTIFY THE IMPACT OF THESE DIFFERENCES.

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Table of Contents

I. Corporate General	4
1. Corporate Purpose of KT Corporation	4
2. History	4
3. Total Number of Shares and Related Matters	5
4. Voting Rights	7
5. Dividends and Related Matters	7
II. Business Details	8
1. Overview	8
2. Matters Related to Revenue	13
3. Research and Development Activities	18
4. Other Matters Necessary for Making Investment Decisions	18
III. Financial Information	19
1. Summary of Financial Statements (Non-Consolidated)	19
2. Summary of Financial Statements (Consolidated)	20
IV. Auditors’ Opinion	21
1. Auditor	21
2. Audit (or Review) Opinion	21
3. Remuneration for Independent Non-Executive Auditors for the Past Three Fiscal Years	21
V. Management and Affiliated Companies	22
1. Overview of the Board of Directors and Committees under the Board	22
2. Equity Investment	34
VI. Employees	36
1. Current Status of Employees	36

(EXHIBIT 99-1 : NON-CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009 AND INDEPENDENT AUDITOR’S REPORT)

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I. Corporate General

1. Corporate Purpose of KT Corporation

Business Objectives

1. Information and communications business;

2. New media business;

3. Development and sale of software and contents;

4. Sale and distribution of information communication equipment;

5. Testing and inspection of information communication equipment, devices and facilities;

6. Advertisement business;

7. Telecommunications retail business;

8. Development of information and technology, and electrical infrastructure;

9. Real estate and housing business;

10. Electronic banking and finance business;

11. Education and learning services business;

12. Security services business (including machinery system surveillance services and facilities security services);

13. Research and technical development, education, training and promotion, overseas businesses, export and import trade, manufacturing and distribution related to the activities mentioned in items 1 through 12;

14. Telecommunications services business, including frequency-based telecommunications business;

15. Value-added telecommunications business;

16. Production, supply (screening) and distribution of music albums, music videos, movies, videos and games.

17. Electronic finance and electronic payment gateway services, including issuance and management of pre-paid electronic payment methods;

18. Sales and leasing of equipment and facilities related to the activities mentioned in items 14 through 17;

19. Overseas and export and import trade related to activities mentioned in items 14 through 18;

20. Travel agency business;

21. Insurance agency business;

22. Alternative energy generation business; and

23. Any and all other activities or businesses incidental to or necessary for the attainment of the foregoing.

2. History

A. Changes Since Incorporation

(1) Date of Incorporation: December 10, 1981

(2) Location of Headquarters:

206 Jungja-dong

Bundang-gu, Sungnam

Kyunggi-do

463-711

Korea

(3) Major Changes in KT Corporation

–    On March 27, 2009, KT Corporation (“KT”) signed a merger agreement with its mobile subsidiary KTF, which KT held a 54.25% interest in, and on June 1, 2009, the merger was completed.

–    At the extraordinary shareholders’ meeting held on March 27, 2009, KT shareholders approved the addition of telecommunications services business, including frequency-based telecommunications business, to KT’s business objectives to reflect the adoption of KTF’s business. In order to demonstrate KT’s new goal of providing clients environmentally friendly solutions for higher productivity and lower costs, the shareholders also approved the addition of alternative energy generation business to its business objectives.

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–     Suk-Chae Lee was elected as President and CEO of KT on January 14, 2009.

3. Total Number of Shares and Related Matters

A. Total Number of Shares

(As of September 30, 2010)				(Unit: Shares	)
Category	Type of Shares
	Common Shares		Total
I. Total Number of Authorized Shares		1,000,000,000		1,000,000,000
II. Total Number of Issued Shares		312,899,767		312,899,767
III. Total Number of Shares Reduced		51,787,959		51,787,959
1. Reduction of Capital		—		—
2. Share Retirement		51,787,959		51,787,959
3. Redemption of Redeemable Shares		—		—
4. Other		—		—
IV. Current Number of Issued Shares (II – III)		261,111,808		261,111,808
V. Number of Treasury Shares		17,895,964		17,895,964
VI. Current Number of Issued and Outstanding Shares		243,215,844		243,215,844

B. Status of Capital Increase/Decrease

Date of Shares Issued (Retired)	Type of Shares Issued (Retired)						(Unit: Won, Shares)
			Details of Issued (Retired) Shares
			Type	Number of Issued (Retired) Shares		Par Value per Share		Par Value of Issued per Share		Note
June 2, 2009		—	Common Shares		700,108	5,000			5,000	Issuance of new shares for merger

*     In the merger with KTF, KT issued 700,108 new shares. As a result, the capital amount increased by approximately Won 3.5 billion as follows.

(Unit: Won)

Category	Before Merger		Amount of Change		After Merger
Capital Amount		1,560,998,295,000		3,500,540,000		1,564,498,835,000

C. Acquisition and Disposal of Treasury Shares

(1) Acquisition and Disposal of Treasury Shares

(As of September 30, 2010)						(Unit: Shares)
Method of Acquisition		Type	Beginning of Term		Acquisition (+)		Disposition (-)		Retirement (-)		End of Term
Direct Acquisition	Pursuant to Article 165-2 of Securities and Exchange Act	Common Shares		16,155,938	1,259,170			—		—		17,415,108
		Preferred Shares		—	—			—		—		—
	Reasons other than Article 165-2 of Securities and Exchange Act	Common Shares		500,232	7,311			26,687		—		480,856
		Preferred Shares		—	—			—		—		—
Subtotal		Common Shares		16,656,170	1,266,481			26,687		—		17,895,964
		Preferred Shares		—	—			—		—		—
Indirect Acquisition (e.g. Trust Contract)		Common Shares		1,259,170	—			1,259,170		—		0
		Preferred Shares		—	—			—		—		—
Total		Common Shares		17,915,340	1,266,481			1,285,857		—		17,895,964
		Preferred Share		—	—			—		—		—

*     The above “Beginning of Term” means as of January 1, 2010 and “End of Term” means as of September 30, 2010.

*     Details of share buyback and retirement of treasury shares from January 1, 2010 to June 30, 2010 are as follows.

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1) Acquisition of Treasury Shares (1,266,481 shares)

- March 9, 2010: Transfer of all treasury shares under trust account to KT’s own trust account due to the expiry of the treasury share trust agreement (1,259,170 shares).

- April 29, 2010: Retrieval of granted treasury shares (7,311 shares)

2) Disposition of Treasury Shares (1,285,857shares)

- March 9, 2010: Transfer of all treasury shares under trust account to KT’s own trust account due to the expiry of the treasury share trust agreement (1,259,170 shares).

- May 3, 2010: Disposition of treasury shares to distribute long-term performance based bonus payment to non-independent directors (18,427 shares)

- June 30, 2010: Disposition of treasury shares in connection with the exercise of stock options (2,559 shares)

- July 21, 2010: Disposition of treasury shares in connection with the exercise of stock options (1,767 shares)

- August 13, 2010: Disposition of treasury shares in connection with the exercise of stock options (1,875 shares)

- September 17, 2010: Disposition of treasury shares in connection with the exercise of stock options (2,059 shares)

D. Share Ownership Status of the Employee Stock Ownership Association

(1) Transactions with the Employee Stock Ownership Association

Not Applicable

(2) Guidelines for Exercising the Voting Rights of the Employee Stock Ownership Association

Association Account: The Employee Stock Ownership Association exercises its voting right in a manner that is exactly in proportion to the number of association members who wish to exercise their voting rights.

Association Member Account: Employee Stock Ownership Association may exercise its voting rights only if (i) the association receives a request by an association member to exercise his voting rights with a minimum notice period of seven days or (ii) the association member chooses to delegate his voting rights to the association.

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(3) Shares Held by the Employee Stock Ownership Association

(As of September 30, 2010)				(Unit: Shares	)
Type of Account	Type of Shares	Balance at Beginning of Term	Term-End Balance
Association Account	Common Shares	34,950		34,404
Association Member Account	Common Shares	7,570,213		4,219,672
Total		7,605,163		4,254,076

4. Voting Rights

(As of September 30, 2010)		(Unit: Shares)
Category			Number of Shares	Note
Total Issued Shares (A)	Common Shares		261,111,808	—
	Preferred Shares		—
Shares without Voting Rights (B)	Common Shares		17,899,218	Including Treasury Shares
	Preferred Shares		—
Shares with Restricted Voting Rights under the Stock Exchange Act and Other Laws (C)	—		—	—
Shares with Reestablished Voting Rights (D)	—		—	—
Shares with Exercisable Voting Rights (E = A – B – C + D)	Common Shares		243,212,590	—
	Preferred Shares		—

(1) Shares without voting rights under the Commercial Code of Korea: 17,895,964 treasury shares held through treasury stock funds and 3,254 cross-holding shares.

5. Dividends and Related Matters

A. Dividends

The shareholder return policy of KT is to pay its shareholders at least 50% of the adjusted net profit of the current term, through cash dividends and acquisition of treasury stock of the Company.

B. Dividends Paid during the Past Three Fiscal Years

Category		First Nine Months of 2010		2009		2008
Par Value per Share (Won)			5,000		5,000		5,000
Net Profit of the Current Term (in Millions of Won)			1,066,777		516,533		449,810
Net Profit per Share (Won)			4,386		2,353		2,217
Year-end Cash Dividend (in Millions of Won)			—		486,393		226,280
Year-end Share Dividend (in Millions of Won)			—		—		—
Cash Dividend Propensity (%)			—		94.2		50.3
Rate of Return on Cash Dividend (%)	Common Shares		—		4.9		2.9
	Preferred Shares		—		—		—
Rate of Return on Share Dividend (%)	Common Shares		—		—		—
	Preferred Shares		—		—		—
Cash Dividend per Share (Won)	Common Shares		—		2,000		1,120
	Preferred Shares		—		—		—
Share Dividend per Share (Share)	Common Shares		—		—		—
	Preferred Shares		—		—		—

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II. Business Details

1. Overview

A. Present Conditions of the Industry

(1) Characteristics of the Industry

The existing markets for fixed-line telephones, broadband Internet and mobile communications in Korea have reached their maturity. However, with technical advances and changes in customer demands, the communications industry has recently been moving towards a convergence with different technologies and industries, such as the convergence between fixed and mobile communications and the convergence between the telecommunications industry and the broadcasting industry. As shown by the development of IPTV, there is a high probability that the media industry will redefine the traditional boundaries of communications and broadcasting. As such, big changes are expected in both industries. In the mobile communications market, the transition to 3G technology has become a turning point in shaping the new competitive landscape by replacing the existing competition in the 2G market. In the saturated communications market, enhancing customer value has become increasingly important as both fixed and mobile communications carriers offer bundled services such as the Triple/Quadruple Play and Fixed-Mobile Convergence (“FMC”) services. Mobile communication industry is also rapidly shifting from voice-centric market to data-centric market in accordance with an increasing use of smart phones and tablet PCs. Accordingly, network competitiveness will become a crucial factor for success in the telecommunication business.

(2) Growth of the Industry

(Unit: 1,000 Persons)

Category	December 31, 2005		December 31, 2006		December 31, 2007		December 31, 2008		December 31, 2009		September 30, 2010
Broadband Internet Subscribers		12,191		14,043		14,710		15,475		16,349		not available
Local Telephone Subscribers		22,920		23,119		23,130		22,132		20,090		19,444
Mobile Phone Subscribers		38,342		40,197		43,498		45,607		47,944		50,210

*     The 2005 to 2007 data was provided by the Ministry of Information and Communication (www.mic.go.kr).

*     The 2008 to September 30, 2010 data was provided by the Korea Communications Commission (“KCC”) (www.kcc.go.kr).

*     The number of broadband internet subscribers as of September 30, 2010 was not published by the KCC.

(3) Characteristics of Market Fluctuations

The demand for communications services does not fluctuate greatly as such services are regarded as a necessity in modern life. However, if the Korean economy slows in the future, it could have an adverse impact on KT’s business activities.

(4) Competition

(a) Competing Companies

• Local calls: SK Broadband, LG U+, etc.

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• Long distance calls: LG U+, Onse Telecom, SK Broadband, SK Telink, etc.

• International calls: LG U+, Onse Telecom, SK Broadband, SK Telink, etc.

• Broadband Internet: SK Broadband, LG U+, Service Operators (including cable television, relay wired broadcasting operators), etc.

• Mobile communications: SK Telecom, LG U+, etc.

• Internet telephones using Internet Protocol (“VoIP”): SK Broadband, SK Networks, SK Telink, Samsung Networks, LG U+, Korea Cable Telecom, etc.

• IPTV: SK Broadband, LG U+

• Mobile Internet (WiBro service): SK Telecom

- LG U+, or LG Uplus Corp, is the new company name of LG telecom that merged with LG Dacom and LG Powercom effective as of January 1, 2010.

(b) Market Entry Requirements

• Communication service providers: business operations must be approved by the Korea Communications Commission

• Specific telecommunications service providers: registration is required

• Value-added telecommunications service providers: reporting is required

(c) Factors of Competition: service fees, product quality, marketing power, brand value and competitiveness of the distribution network, etc.

(5) Relevant Laws and Government Regulations

(a) Relevant Laws

• Telecommunications policy-related laws

  Telecommunications Basic Act, Telecommunications Business Act (total 7)

• Radio and broadcasting policy-related laws

  Radio Regulation Law

• Information related laws

  Promotion of Information and Communication Basic Act (total 9)

• Broadcast related laws

  Broadcasting Law, Internet Multimedia Broadcasting Business Law (IP-TV related), etc.

(b) Government Regulations

The Korea Communications Commission is responsible for managing the convergence between broadcasting and communications, as well as assuring their independence and role of providing public services. The commission is also responsible for issuing relevant licenses, permits, approvals, policy enactments and other matters relating to the promotion of broadcasting and communications and the enhancement of their global competitiveness.

The statements included in the above sections are based on KT’s forecasts and are offered for the sole purpose of providing a better understanding of the company’s current state. Consequently, investors must not rely solely on KT’s forecasts when making their investment decisions.

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B. Current Status of KT

(1) Operations Outlook and Classification of Business

(a) Operations Outlook

The Korean communications market is currently experiencing stagnant growth as major services, including fixed-line telephones, broadband Internet and mobile communications, have reached maturity, caused in part by intense competition in the industry. Despite the unfavorable environment, the convergence of the telecommunications and broadcasting industries, such as IPTV and VoIP, and the convergence of fixed and mobile services (FMC) are leading the growth of the telecommunications market.

On June 1, 2009, KT completed a merger with KTF, its mobile subsidiary, to overcome stagnant growth in the existing communications market, realize growth in new markets, and expand differentiated core capabilities. In addition, KT is also building a solid foundation for growth by introducing new services based on its group synergy, such as QOOK TV SkyLife (hybrid media service providing DMB channels from Skylife and Video on Demand or VOD from QOOK TV, KT’s IPTV) and FMC services. Furthermore, in November 2009, KT was first to introduce Apple’s iPhone to the Korean market to meet the smartphone needs of consumers.

Considering the highly saturated mobile phone market in Korea (102.4% as of September 2010 with more than 50 million subscribers), potential growth by adding new subscribers or raising voice service plans are limited. In such an environment, however, the mobile data business is considered as a new growth engine. At the end of 2009, KT successfully switched the paradigm of competition from voice to data centered services by introducing Apple’s iPhone as the sole provider in Korea. iPhone was successfully launched as the number of iPhone subscribers reached to 1.15 million as of September 30, 2010. In addition, average iPhone users use mobile data communication service approximately 30 to 40 times more than average non-iPhone users. Such data communication service usage pattern can be observed in all age groups, which in turn provides a platform for continuous growth in mobile data business. As approximately 60% of wireless data transmission out of total wireless data transmission is being used through WiFi networks, KT’s unique convergence network infrastructure will become KT’s competitive advantage in the wireless data business market. Going forward, KT will continue to reinforce its WiFi network competency by expanding WiFi zones to 40,000 by the end of 2010 and providing secured network to offer better customer experiences.

In the broadband Internet arena, KT will aim to improve customer value and marketing power by continuing to provide Fiber-To-The-Home (“FTTH”) services.

KT’s wireless broadband Internet service business, or SHOW WiBro, extended its coverage to five major cities in provincial area as well as 19 major cities in metropolitan area. KT plans to further expand services to 82 major cities and major highways to cover 85% of Korean population, and will aim to be a leader in the Mobile 2.0 generation, the next generation of mobile communications.

Also, KT’s IPTV business will focus on actively catering to the TV portal market through its QOOK TV service and, in the long term, by pursuing a leadership position in the communication-broadcasting convergence market.

(b) Operations Subject to Disclosure

KT’s main area of business is the telecommunications sector as classified by the Korea Standard Industry Code.

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(2) Market Share

Category	Operator	Market Share for Each Term (%)
		29th Fiscal Year (as  of September 30, 2010)		28th Fiscal Year (as of December 31, 2009)		27th Fiscal Year (as of December 31, 2008)
Local Telephone (On the Basis of the Number of Subscribers)	KT		87.1		89.9		89.8
	SK Broadband		11.0		8.4		8.7
	LGU+		1.9		1.7		1.5
Mobile Telephone (On the Basis of the Number of Subscribers)	KT		31.5		31.3		31.5
	SK Telecom		50.7		50.6		50.5
	LGU+		17.8		18.1		18.0
Broadband Internet (On the Basis of the Number of Subscribers)	KT		42.9		42.5		43.4
	SK Broadband		23.3		23.5		22.9
	LGU+		15.6		15.4		14.1
	Service Operators		18.2		18.6		19.6

*     Data was provided by the KCC. (www.kcc.go.kr).

*     The market share of broadband Internet service as of September 30, 2010 is the market share as of May 31, 2010, the latest available information.

*     The market share of SK Broadband calculated based on the subscriber number which is including resale By SK Telecom

(3) Market Characteristics

KT maintained approximately 87.1% of the Public Switched Telephone Network (“PSTN”) market share as of September 30, 2010 despite increased marketing efforts by its competitors. For instance, SK Broadband began offering aggressive sales promotions to increase its PSTN subscribers by introducing tariff based on household unit and offering discounts on basic monthly fees and airtime usage charges. LG U+ also competes with its new tariff plan based on household unit called “YO”.

Although PSTN sales and the number of PSTN subscribers are on a gradual decline due to the increased use of mobile phones and VoIP phone services over fixed phones and the paradigm shift from voice to data communications, KT is trying to mitigate the PSTN sales from further decrease by (i) increasing Average Revenue per User (“ARPU”) through sales of additional services, (ii) increasing customer satisfaction by offering optional calling plans and (iii) retaining existing customers through customer relationship management activities.

Competitions among mobile service providers over new subscribers continue to be intense, and overall revenue and subscriber growth have been slow. According to a report by KT Economics and Management Research Lab, penetration rates in terms of subscribers is showing signs of saturation, as it was 102.4% as of September 30, 2010.

However, KT, as part of its growth strategy, plans to improve ARPU, particularly ARPU for data communication services, by providing innovative data services for smart phones utilizing Wi-Fi as well as WCDMA networks. As the sole iPhone provider in Korea, KT has successfully shifted the market competition from voice to data focused services. In addition to rapid iPhone sales, KT’s smartphone leadership is strengthened through the introduction of various handsets such as Andro One, an Android-based handset, as well as by offering competitive products such as one-month data roll-over program or one person data sharing plan (“OPMD”) tariff plan. As of September 30, 2010, KT had approximately 1.65 million smartphone subscribers.

To create marketing synergy with KT’s fixed services and to encourage loyal customers to churn-in and retain KT’s service, we introduced various services such as unlimited tariff plan among family members and ‘QOOK&SHOW Toong’ tariff plan, a bundled product for Internet, IPTV and PSTN services. Also, to provide differentiated services based on integration between fixed and mobile, “uCloud” service, a cloud computing service, and “Olleh KT club”, a fixed mobile integrated loyalty program, were introduced.

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KT plans to maintain its leadership in smartphone market by continually improving its handset line-up, guaranteeing service quality, maintaining Wi-Fi leadership, and introducing new tariff to fulfill the customer needs.

As for broadband Internet, KT seeks to expand its subscriber base by offering high-quality services. In a market marked by intense price competition, KT aims to lead the market by supplying superior FTTH services to the competitor in terms of both speed and quality. KT’s ultimate goal is to be a market leader in offering the next generation of services, such as IPTV and VoIP, to its broadband subscribers by providing high Internet transmission speeds (100 Mbps) for common households.

(4) Status and Forecast of New Businesses

In order to overcome present market obstacles of limited growth in the voice service market and the sluggish growth in the broadband Internet service market, KT has been actively involved in developing a wide range of new businesses with growth prospects.

KT aims to create a digital entertainment world that will enrich its customers’ lives through a ubiquitous environment, which can be accessed through various terminals anytime, anywhere. Furthermore, KT aims to offer customers convenient solutions that they may freely use without time or location limitations and business solutions necessary to raise corporate efficiency and competitiveness. By excelling in these new business areas, KT strives to become a company that aids its clients in meeting their goals and enhancing their value.

SHOW WiBro enables portable broadband Internet access services, allowing universal Internet access with high transmission speeds through personal handsets or laptop computers. WiBro was first commercialized in the world using Korean technology, and KT successfully provided commercial WiBro services in limited areas in 2006. Since April of 2007, KT has actively been seeking to provide WiBro services in the Seoul metropolitan area, including various major buildings and university campuses. In October 2008, WiBro services in the Seoul metropolitan area was extended to 19 neighboring cities and the service speeds became twice as fast. Currently, anyone may utilize KT WiBro services with personal computers, WiBro-compatible laptop computers, WiBro phones, which combine CDMA mobile phones with WiBro service, Portable Media Players, navigation devices or Dongle, a USB device that can be connected to any laptop computer. In addition, Egg, which is a portable Access Point Device (“AP”) launched at the beginning of 2009, enables customers to enjoy WiBro service with various Wi-Fi embedded devices. KT will continuously try to expand its array of digital devices that are compatible with WiBro services. KT will promote a mobile culture for its customers through KT WiBro, which shall offer not only basic Internet access but also other individually tailored services, such as combined webmails, two-way visual communications, remote controlled home computers, information services linked with real-time search functions and mobile UCC to its users. As a fixed-mobile integrated company after the merger, KT will introduce new services through the convergence of WCDMA, Wi-Fi and WiBro (“3W”), and thus lead the Mobile 2.0 generation, the next generation of mobile communications.

In October 2009, KT introduced olleh Phone service (formerly QOOK&SHOW), the first FMC service in Korea. olleh Phone service enables subscribers to enjoy both Wi-Fi as well as WCDMA on a single handset at a considerably low tariff. In addition, KT launched the world’s first 3W based smart phone. KT is vitalizing the mobile data market by enhancing customers’ convenience while reducing existing tariff levels. In the past, the telephone business was a growth engine for KT; however, wireless data is now considered as a new core engine for future growth. To boost the wireless data business, KT has implemented lower mobile data tariff, development of various devices and prevalence of mobile Internet software through the open market. Going forward, KT will continue to promote innovative convergence business, such as integration of services and contents for mobile, internet, IPTV, SoIP (collectively, “N-Screen”) and provide more home network services. In addition to VoIP handsets for voice and video calls, KT plans to introduce tablet-type media phone device with multimedia functions including VoIP calls in the fourth quarter 2010. Together with pad-style devices, KT plans to lead the tablet handset market.

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QOOK TV is a service that integrates telecommunications and broadcasting services, brought about by accelerated development of high speed broadband Internet and fast conversion of contents into multimedia. QOOK TV is a service that provides traditional Internet services, such as information searches, games, message exchanges, and shopping with VOD services, which allow users to watch a variety of contents, such as movies, dramas and educational programs, at any time. From the second half of 2007 to October of 2008, only non-real time VOD services and interactive services were provided due to regulatory restrictions. However, after the enactment of the Korean Internet Multimedia Broadcasting Business Law by the National Assembly in December 2007 and the granting of the IPTV business license to KT on September 8, 2008, KT has been able to provide real-time broadcasting IPTV service starting November 17, 2008. KT provides 104 IPTV channels, 90,000 VOD programs and 86 two-way services as of September 30, 2010. In February 2010, KT introduced the first Open IPTV, where KT broadcast channels and VODs produced by its subscribers.

In order to maintain and expand its subscriber base and heighten competitive edge, KT’s Internet phone provides video communication, SMS and a variety of daily life related services (home ATM, traffic and local news information) in addition to its voice transmission services. As a result of continuous efforts to add new subscribers, KT had 2.5 million of VoIP subscribers as of September 30, 2010. Furthermore, the customer base for video services have gradually expanded due to the variety of terminal line-up from mid-end type (LCD 4’) to high-end type (LCD 7’) as well as ‘media phone’ and ‘media robot’ which will be introduced in the fourth quarter. Meanwhile, to secure a stable revenue base, KT is trying to maintain PSTN subscribers through bundling and long-term contracts. By providing VoIP phones as a second phone to PSTN subscribers, KT anticipates more revenue being generated from the VoIP business. KT plans to solidify its customer base through the creation of a new market by offering convergent terminals with value added services and integrated applications.

KT believes that its new businesses will not only bring about new sources of revenue for the company, but also assist KT in maintaining its current fixed-line market share as well as promote its competitiveness in the broadband Internet service market. KT, leveraging on its past success, intends to continue developing new businesses so that it can become a pioneer in the areas of fixed line to mobile consolidation, convergence of telecommunications and broadcasting, and other cross-industry convergence.

The statements included in the above sections are based on KT’s forecasts and are offered for the sole purpose of providing a better understanding of the company’s current state. Consequently, investors must not rely solely on KT’s forecasts when making their investment decisions.

2. Matters Related to Revenue

A. Performance in Terms of Revenue

(Unit: In Millions of Won)

Items	First Nine Months of 29th Fiscal Year (2010)		28th Fiscal Year (2009)		27th Fiscal Year (2008)
Internet Connection		1,462,523		1,954,639		2,059,088
Internet Application		388,820		431,909		359,462
Data		988,257		1,450,217		1,650,121
Telephone		2,532,683		3,603,155		3,938,712
LM		727,591		1,154,094		1,393,605
Wireless		5,192,931		4,266,371		1,006,638
System Integration		207,909		232,546		248,425
Real Estate		303,031		286,870		245,840
Handset		3,218,832		2,498,845		855,145
Others		19,501		27,528		27,799
Total		15,042,078		15,906,174		11,784,835

*    The revenue from KTF from June 2009 has been included as the result of the merger according to the K-GAAP.

13

B. Routes and Methods of Sales

(1) Marketing Organizational Structure

(2) Sales Path

• Customer center and branch offices offer sales of goods and customer services.

• Subscription to goods and services through the Internet (www.qook.co.kr) and sales persons in branch offices

• Attracting new subscribers through sales agencies

14

(3) Methods and Conditions of Sales

(a) Sales Methods

• Service fees are paid in cash (wire transfer, direct bank transfer and credit cards). Fixed and wireless telephone services are operated on a unit pricing system or a partial flat rate system, and broadband Internet access service is operated on a flat rate system.

• Sale of terminals may involve installment payments.

• Rental of terminals is charged on a monthly basis, and a discounted rate is applied during the contract period.

• Distribution fees are charged upon installation and additional periodic maintenance fees.

(b) Conditions for Sales

• Discount of Service Fees in accordance with the Subscription Period

Category	1 Year	2 Years	3 Years	4 Years
QOOK Internet	5%	10%	15%	20% (limited to Special)
KORNET (Express/Premium)	5%	10%	15%	—
QOOK TV (Live/VOD)	5%	10%	20%	—

• Additional discounts available for subscribers who have used the following services for at least 3 years

Category	After 3 Year	After 4 Years	After 5 Years	Note
QOOK Internet	2%	3%	5%	—
KORNET (Express/Premium)	2% (When subscribers sign up for an additional 1 year agreement)	3% (When subscribers sign up for an additional 2 year agreement)	5% (When subscribers sign up for an additional 3 year agreement)	When subscribers enter into an additional agreement

*    In the case of QOOK Internet, there are no additional discounts for subscribers who have used the service for more than 3 years if they renewed the long-term contract or signed for bundling after November 1, 2008.

• Additional discounts available for QOOK Internet subscribers who renewed their contract

Category	Renewal for 1 year		Renewal for 2 years			Renewal for 3 years			Renewal for 4 years
Type A		KRW        1,000		KRW        2,000			KRW        3,000			KRW        4,000
Type B		—		5	%		10	%		—

*    Additional discount rates for the subscribers who renewed their long-term contracts before November 1, 2008 are 3% for renewal for 2 years and 5% for renewal for 3 years. Renewal of the existing contract is required to receive the current discount rates.

*    Additional discount rate is not available for long-term subscribers who already receive the current discount rates.

• Optional discount for SHOW in accordance with the Subscription Period (SHOW-king sponsor basic type)

15

Monthly fee	Period of subscription
	12 months	18 months	24 months
KRW 30,000 Up to KRW 40,000	Discount up to KRW 3,000	Discount up to KRW 5,000	100% discount     (up to KRW 10,000)
More than KRW 40,000	10% discount

• Discount for SHOW mobile Gold/i plan (SHOW-king sponsor for Cold/i type)

(Unit: Won)

Gold type plan	SHOW free 150	SHOW free 250	SHOW free 350	SHOW free 450	SHOW free 650	SHOW free 850	SHOW free 2000
Amount of discount per month	2,500	5,000	7,000	11,000	12,000	14,000	25,000

i Type Plan	Slim	Lite/Talk	Medium	Special	Premium
Amount of discount per month	5,000	8,000	13,000	16,000	22,000

• Major Bundling Discounts

QOOK Internet plus SHOW	QOOK Internet	SHOW
	3% to 10% additional discount for service fees according to Agreement terms	10% discount for monthly service fees (5% for QOOK Internet subscriptions without long-term discount agreements)
QOOK Internet plus KT WIBRO	QOOK Internet	KT WIBRO
	3% to 10% additional discount for service fees according to Agreement terms	None (instead NESPOT family provided free of charge)
QOOK Internet plus QOOKTV	QOOK Internet	QOOKTV
	3% to 10% additional discount for service fees according to Agreement terms	3% to 10% additional discount for service fees according to Agreement terms

*    Please refer to the explanations for each service provided on their respective websites or the relevant terms and conditions for further details.

(4) Sales Strategy

Our main sale strategy is to provide differentiated experience for our customers by providing various bundled products at competitive prices.

(a) Mobile Service

• Enhancing leadership and competitiveness in smart phone & FMC service by introducing iPhone: Increasing the sales of smart phones and FMC phones

• Strengthen competitiveness by utilizing Wi-Fi network: Providing free Wi-Fi access to those who subscribe special smart phone tariff plans

• Controlling marketing expenses by introducing a new sales program which provides special tariff discount instead of handset subsidy

• Strengthen customer retention policy targeting the long-term contract customers whose contract period is matured.

16

• Promote 3G migration in order to change the rules of the game from 2G CDMA to 3G WCDMA

• Promote specialized high-quality products and increase sales through up-selling and retention of existing customers

(b) Broadband Internet Service

• Strengthen competitiveness in both quality and speed by offering FTTH

• Satisfy a diverse range of customer needs and provide differentiated services through development and offering of additional services

• Promote specialized high-quality and optimized products and increase sales through up-selling and retention of existing customers

(c) Telephone Service

• Minimize PSTN line loss by introducing new tariff scheme.

• Provide more benefits to customers by bundling services.

• Promote KT’s VoIP phones to existing PSTN subscribers as their second phones to increase PSTN+VoIP bundled subscribers.

• Retain PSTN subscribers who wish to switch their PSTN phone to VoIP phone by offering our own VoIP solution.

• Enhance ARPU by developing new business model.

(d) WiBro Service

• Increase subscriber base by expanding distribution channels and terminal competitiveness.

• Execute special marketing program (opening interactive stores, establishing WiBro U-Campus, launching a laptop rental businesses, target marketing toward securities companies)

• Stimulate early market interest through promotional rate plans and package products

(e) IPTV Service

• Promote QOOK TV products to our existing QOOK internet subscribers.

• Expand client base by offering free set-top box rentals (with a 3-year subscription contract) and opportunities to experience KT services

• Increase synergy with SkyLife, our satellite TV subsidiary, by providing hybrid product through which people can enjoy Satellite HD channels as well as VOD libraries.

(f) Bundling Service

• Retain existing customers and acquire new 3G and Wibro subscribers by developing and promoting new bundling products

• Promote customer retention through continued development and sale of package products of major services

17

3. Research and Development Activities

A. Research and Development Costs

(Units: In Millions of Won)

Category		First Nine Months of 2010	2009	2008	Note
Raw Materials		—	—	—	—
Labor Costs		37,059	59,490	69,256
Depreciation		57,601	66,109	51,637	—
Commissions		313	6,692	14,027	—
Others		194,826	238,868	214,263	—
Total R&D Costs		289,799	371,159	349,183	—
Accounting Treatment	Research and     Ordinary     Development     Costs	194,756	235,079	251,141
	Development     Costs (Intangible     Assets)	95,043	136,080	98,042
Percentage of R&D Costs over Revenue		1.93%	2.33%	2.96%	—

4. Other Matters Necessary for Making Investment Decisions

A. Intellectual Property Rights

• KT holds 5,755 domestic patents and 481 overseas patents as of September 30, 2010.

18

III. Financial Information

1. Summary of Financial Statements (Non-Consolidated)

(in Millions of Won)

Classification	As of September 30, 2010			2009			2008			2007			2006
Current Assets		6,874,550			6,474,579			3,778,105			3,310,412			3,239,188
•  Quick Assets		6,361,016			5,867,770			3,610,564			3,188,309			3,146,206
•  Inventory		513,534			606,809			167,541			122,103			92,982
Fixed Assets		17,519,858			17,867,896			14,906,817			14,606,770			14,723,145
•  Investments		1,519,806			1,274,670			3,517,906			3,458,580			3,661,067
•  Tangible Assets		13,714,514			14,203,832			10,428,674			10,448,618			10,398,084
•  Intangible Assets		1,036,114			1,206,587			397,046			439,738			470,782
•  Other Non-Current Assets		1,249,424			1,182,807			563,191			259,834			193,212
Total Assets		24,394,408			24,342,475			18,684,922			17,917,182			17,962,333
Current Liabilities		6,164,373			5,684,276			2,585,875			2,991,341			3,270,249
Fixed Liabilities		7,271,993			8,259,945			7,267,158			6,065,948			6,143,004
Total Liabilities		13,436,366			13,944,221			9,853,033			9,057,289			9,413,253
Capital		1,564,499			1,564,499			1,560,998			1,560,998			1,560,998
Capital Surplus		1,449,648			1,448,569			1,440,633			1,440,777			1,440,910
Capital Adjustments		(1,262,912	)		(2,165,728	)		(3,994,736	)		(3,983,929	)		(3,817,717	)
Accumulated Comprehensive Income		(59,900	)		(44,542	)		10,879			(818	)		10,978
Retained Earnings		9,266,707			9,595,456			9,814,115			9,842,865			9,353,911
Total Capital		10,958,042			10,398,254			8,831,889			8,859,893			8,549,080

(in Millions of Won)

Classification	First Nine Months of 2010		2009		2008		2007		2006
Sales		15,042,078		15,906,174		11,784,835		11,936,382		11,856,009
Operating Income		1,748,555		611,550		1,113,389		1,433,722		1,756,228
Net Income		1,066,777		516,533		449,810		981,967		1,233,449

19

2. Summary of Financial Statements (Consolidated)

As of the end of December 31

(in Millions of Won)

Classification	2009			2008			2007			2006			2005
Current Assets		7,971,849			7,073,826			5,642,799			5,981,420			6,131,744
•  Quick Assets		7,272,447			6,648,985			5,343,695			5,744,225			5,771,631
•  Inventory		699,402			424,841			299,104			237,195			360,113
Fixed Assets		18,648,468			19,064,778			18,484,086			18,261,914			18,556,973
•  Investments		561,370			546,000			470,195			533,947			792,669
•  Tangible Assets		14,774,560			15,188,631			15,288,002			15,167,429			15,087,032
•  Intangible Assets		1,279,500			1,474,238			1,735,323			1,959,591			2,133,199
•  Other Non-Current Assets		2,033,038			1,855,909			990,566			600,947			544,073
Total Assets		26,620,317			26,138,604			24,126,885			24,243,334			24,688,717
Current Liabilities		6,941,223			5,241,028			5,078,621			5,423,115			4,822,341
Fixed Liabilities		9,011,655			9,809,678			7,910,498			8,122,915			9,476,442
Total Liabilities		15,952,878			15,050,706			12,989,119			13,546,030			14,298,783
Minority Interest		290,872			2,256,009			2,276,003			2,267,252			2,518,213
Capital		1,564,499			1,560,998			1,560,998			1,560,998			1,560,998
Capital Surplus		1,448,569			1,440,633			1,440,777			1,292,475			1,389,222
Capital Adjustments		(2,165,728	)		(3,994,736	)		(3,983,929	)		(3,817,717	)		(3,868,078	)
Accumulated Comprehensive Income		(44,542	)		10,879			142			5,772			(3,166	)
Retained Earnings		9,573,769			9,814,115			9,843,775			9,400,068			8,786,413
Total Capital		10,667,439			11,087,898			11,137,766			10,697,304			10,389,934

For the years ended December 31 (in Millions of Won)

Classification	2009		2008		2007		2006		2005
Revenues		19,649,120		19,592,949		18,660,082		17,824,880		17,191,845
Operating Income		966,459		1,440,280		1,745,341		2,383,376		2,411,095
Income from Continuing Operations		607,300		539,337		1,096,774		1,509,721		1,365,010
Net Income		609,695		513,290		1,170,978		1,509,717		1,360,036
Consolidated Net Income		494,846		449,810		1,056,227		1,291,863		1,085,450
Number of Consolidated Companies		36		33		28		23		21

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IV. Auditors’ Opinion

1. Auditor

First Nine Months of 2010	First Nine Months of 2009	2009	2008
Samil PwC	Deloitte Anjin LLC	Deloitte Anjin LLC	Deloitte Anjin LLC

2. Audit (or Review) Opinion

Term	Audit (or Review) Opinion	Issues noted
First Nine Months of 2010	—	Not Applicable
First Nine Months of 2009	—	Not Applicable
2009	Unqualified	Not Applicable
2008	Unqualified	Not Applicable
2007	Unqualified	Not Applicable

3. Remuneration for Independent Non-Executive Auditors for the Past Three Fiscal Years

A. Audit Contracts

(Units: In Millions of Won, Hours)

Term	Auditor	Contents	Fee		Total Hours
3rd quarter, 2010	Samil PwC	Quarterly and semi-annual review of financial statements Semi-annual review of consolidated financial statements Non-consolidated financial statements audit Consolidated financial statements audit		1,930		18,830
2009	Deloitte Anjin LLC	Quarterly and semi-annual review of financial statements Semi-annual review of consolidated financial statements Non-consolidated financial statements audit Consolidated financial statements audit US GAAP financial statements audit		2,786		41,545
2008	Deloitte Anjin LLC	Quarterly and semi-annual review of financial statements Semi-annual review of consolidated financial statements Non-consolidated financial statements audit Consolidated financial statements audit Kaesong Branch Office audit US GAAP financial statements semi-annual review US GAAP financial statements audit		2,319		33,858

21

V. Management and Affiliated Companies

1. Overview of the Board of Directors and Committees under the Board

A. Matters on the Board of Directors

(1) Organization

As of June 30, 2010, Board of Directors of KT Corp. consists of 11 Directors. (3 Inside Directors and 8 Outsider Directors) Under the Board of Directors, KT has 6 different Committees as follows; Corporate Governance Committee , Audit Committee, Outside Director Candidate Recommendation Committee, Evaluation & Compensation Committee, Executive Committee, Related-Party Transaction Committee. Also, the Board of Directors may establish another committee if necessary.

(2) Major Activities of the Board of Directors

Order	Date	Subject	Result of Discussion
First	Jan. 28, 2010	Proposal on assurance for Ansan U-Complex Business	Original proposal approved
		Approval of financial statements of the 28th term	Original proposal approved
		Business reports of the 28th Term	Original proposal approved
		Plan for issuance of bonds for 2010	Original proposal received
		Proposal on the reformation of corporate governance	Original proposal approved
Second	Feb. 11, 2010	Proposal on the amendment to the articles of incorporation	Amended proposal approved
		Agreement on the recommendation of non-independent Directors	Original proposal approved
		Proposal on the recommendation of members of audit committee	Original proposal approved
		Proposal on the limit on remuneration of Board of Directors	Original proposal approved
		Proposal on the compensation and payment system for Board of Directors	Original proposal approved
		Proposal on the amendment to the severance payment regulation for senior management	Original proposal approved
		Approval of financial statements of the 28th term	Original proposal approved
		Convocation of annual general meeting of shareholders of 28th term	Original proposal approved
		Report on operational condition of internal accounting management system	Original proposal received
		Proposal on the execution of call option on Skylife	Original proposal approved
		Report on ROA status and strategies for improvement of real estate business	Original proposal received
		Audit committee’s report on operational condition of internal accounting management system	Original proposal received
		Report on the validity of the audit committee	Original proposal received

22

Third	Mar. 12, 2010	Appointment of the Chairman of the Board of Directors and the proposal on the organization of committees under the Board of Directors	Chairman of BOD and members of committees appointed
		Amendment to the policies on the Board of Directors and committees	Original proposal approved
		Report on current status and plan for improvement of management performance of subsidiary companies	Original proposal received
		Report on acquisition of Keum-Ho Rent-A-Car and proposal on capital increase	Original proposal approved
		Report on transactions under 15 billion won with other entities for 2009	Original proposal received
		Plan for building hot-line for chairman of audit committee	Original proposal received
Fourth	Mar. 17, 2010	Approval on the payment for acquirement of new spectrum	Original proposal approved
Fifth	Apr. 29, 2010	Proposal on funding for Korea Mobile Internet Business Association	Original proposal approved
		Proposal on renewal contract for KIF investment fund	Original proposal approved
		Proposal on disposition of treasury shares for long-term performance based incentive payment	Original proposal approved
		Proposal on plans for the payment of long-term incentive for 2010	Conditionally approved
		Proposal on the method of payment for granted stock-options in the past	Original proposal approved
		Plan for postponed incentive payment	Original proposal approved
		Report on statement of accounts for the first quarter of 2010 fiscal year	Original proposal received
Sixth	May. 14, 2010	Proposal on C project plan	Original proposal approved
		Proposal on disposition of newly established non-car rental business unit of KT Rental	Original proposal approved
Seventh	July 16, 2010	Proposal on establishment of Wibro Infrastructure Corporation (WIC)	Original proposal approved
		Proposal on raising and operation of fund for enhancement of core capability	Original proposal approved
Eighth	July 29, 2010	Plan for processing of stock-options of retired executive officers	Original proposal approved
		Report on statement of accounts for the first half of 2010 fiscal year	Original proposal received

23

(3) The Status of Committees under the Board of Directors

(a) Organization of the Committees under the Board of Directors (As of June 30, 2010)

Title	Organization	Name (after March 12, 2010)	Purpose of Establishment and Authority	Note (Before March 12, 2010)
Corporate Governance Committe	4 Outside Directors, & 1 non- independent Directors	Choon Ho Lee (Chairperson) E. Han Kim Jeung Soo Huh Chan-Jin Lee Hyun-Myung Pyo	Improvement of Corporate Governance	E. Han Kim (Chairman), Jeong-Suk Koh Si Chin Kang, Joon Park, Choon Ho Lee, Hyun Myung Pyo
Evaluation & Compensation Committee	4 Outside Directors	Jeung Soo Huh (Chairperson) Choon Ho Lee Jong-Hwan Song Chan-Jin Lee	Management Agreement with the CEO and Assessment	Jeong-Suk Koh (Chairperson) In-Man Song Choon Ho Lee, Jeung Soo Huh
Executive Committee	3 non- independent Directors	Suk Chae Lee (Chairperson) Sang Hoon Lee Hyun Myung Pyo	Management and financial matters authorized by the Board of Directors	Suk-Chae Lee (Chairperson) Sang Hoon LeeHyun Myung Pyo
Related-party Transaction Committee	4 Outside Directors	Jeong-Suk Koh (Chairperson) Joon Park Jong-Hwan Song Hae Bang Chung	Internal transactions that require resolution by the Board of Directors as stipulated by the ‘Antitrust Regulation and Fair Trade Law’ and ‘Securities and Exchange Act’	Joon Park (Chairperson) Jeong Suk Koh Choon Ho Lee Jeung Soo Huh
Outside Director Candidate Recommendation Committee	See V. Management and Affiliated Companies 1. Overview of the Board of Directors and Committees under the Board A. Matters on the Board of Directors (4) Independency of the Board of Directors			—
Audit Committee	See V. Management and Affiliated Companies B. Audit Committee			—

(b) Activities of the Committees under the Board of Directors

Corporate Governance Committee

Agenda

Results of discussion

Independent and Non-Executive Directors

Executive Directors

Choon Ho Lee

E. H Kim

Jeung Soo Huh

Chan Jin Lee

Hyun Myung Pyo

Attendance 100%

Attendance 100%

Attendance 100%

Attendance 100%

Attendance 100%

Meeting Date

Voting Result

May. 26

Proposal on management plan of Corporate Governance Committee for 2010

Original proposal approved

For

For

For

For

For

July 29

Proposal on improvement of corporate governance system

Original proposal approved

For

For

For

Absent

For

24

Evaluation & Compensation Committee

	Agenda	Results of discussion	Independent and Non-Executive Directors
			Jeong Suk Koh	InMan Song	Choon Ho Lee	Jeung Soo Huh
			Attendance 100%	Attendance 86%	Attendance 40%	Attendance 100%
Meeting Date			Voting Result
Jan. 27	Result of CEO management assessment for 2009	Original proposal approved	For	For	Absent	For
	Proposal on payment system for CEO and standing directors	Original proposal approved	For	For	Absent	For
Feb. 10	Proposal on the Limit on remuneration of Directors for 2010	Original proposal approved	For	For	Absent	For
	Proposal on remuneration standards and payment methods for Standing Directors	Original proposal approved	For	For	Absent	For
		Original proposal approved	For	For	Absent	For
Feb. 25	CEO management goal for 2010	Re-Proposition	Against	Against	Absent	Against
Mar. 5	CEO management goal for 2010	Original proposal approved	For	Absent	For	For

*    Members of the committee re-elected on March 12, 2010: (Jeong Soo Huh, Choon Ho Lee, Jong Hwan Song, and Chan Jin Lee)

	Agenda	Results of discussion	Independent and Non-Executive Directors
			Jeong Soo Huh		Choon Ho Lee		Jong Hwan Song		Chan Jin Lee
			Attendance 100%		Attendance 40%		Attendance 100%		Attendance 100%
Meeting Date			Voting Result
Apr. 28	Proposal on Long-term incentive payment for 2009	Original proposal approved		For		For		For		For
	Proposal on Long-term incentive grant in 2010	Original proposal approved		For		For		For		For
	Proposal on the method of payment for granted stock-options in the past	Original proposal approved		For		For		For		For
July 29	Plan for process of stock-options of retired executive officers	Original proposal approved		For		absent		For		For
	Result of CEO management assessment for first half of 2010	Original proposal received		For		absent		For		For

25

Executive Committee

	Agenda	Results of discussion	Executive Directors
			Suk-Chae Lee	Sasng Hoon Lee	Hyun Myung Pyo
			Attendance 100%	Attendance 100%	Attendance 100%
Meeting Date			Voting Result
Jan. 18	Establishment and, relocation of branches, Change in branch name, and closing of branches	Original proposal approved	For	For	For
Jan. 25	Proposal on issuance of corporate bonds in 1Q and 2Q 2010.	Original proposal approved	For	For	For
Mar.8	Proposal on branch name change and branch relocation	Original proposal approved	For	For	For
Mar. 22	Proposal to donate certain facilities regarding the establishment of broadband mobile traffic information system	Original proposal approved	For	For	For
Mar. 23	Proposal to award 2010 KT –IT Scholarship	Original proposal approved	For	For	For
Apr. 5	Proposal to award KT Company-Labor Union Youth Scholarship	Original proposal approved	For	For	For
Apr. 8	Relocation of Branches	Original proposal approved	For	For	For
Apr. 21	Establishment of new branch	Original proposal approved	For	For	For
May 7	Proposal on sponsorship for ‘Daegu FC’	Original proposal approved	For	For	For
May 19	Sponsoring Korea Digital Media Industry Association	Original proposal approved	For	For	For
May 27	Relocation of Branches	Original proposal approved	For	For	For
September 17	Closing of branches	Original proposal approved	For	For	For
	Proposal on issuance of corporate bonds in 4Q 2010.	Original proposal approved	For	For	For
	Proposal on WIC project	Original proposal approved	For	For	For

26

(4) Independency of the Board of Directors

(a) Independency of appointing BOD members

In order to secure the independency and transparency, all candidates to the Board of Directors should be selected and must get approvals from the general meeting of shareholders. Also, the outside research and advisory service can be done if necessary.

(b) Appointment of new Directors

Name	Expertise	Recommendation	Committees	Inside trading, relationship with major shareholders
Choon Ho Lee	Media Business	Outside Director Candidate Recommendation Committee	Corporate Governance Committee(Chairman)/ Evaluation & Compensation Committee	No
Jeung Soo Huh	New Energy Business	Outside Director Candidate Recommendation Committee	Corporate Governance Committee/ Evaluation & Compensation Committee(Chairman)	No
Jong Hwan Song	Global Business	Outside Director Candidate Recommendation Committee	Evaluation & Compensation Committee / Related-party Transaction Committee	No
Chan Jin Lee	Broadcasting/ Telecommunication and Internet	Outside Director Candidate Recommendation Committee	Corporate Governance Committee/ Evaluation & Compensation Committee	No

(c) Establishing separate committee to appoint new directors

Name	Outside Directors	Note
E. Han Kim	O	The number of the outsider Directors should be more than 50%
Jeong Suk Koh	O
Joon Park	O
Choon Ho Lee	O
Jeung Soo Huh	O
Hyun Myung Pyo	X

Outside Director Candidate Recommendation Committee

Agenda

Results of discussion

Independent and Non-Executive Directors

Executive Director

E. Han Kim

Jeong-Suk Koh

Joon Park

Choon Ho Lee

Jeung Soo Huh

Hyun Myung Pyo

Attendance 100%

Attendance 100%

Attendance 100%

Attendance 100%

Attendance 100%

Attendance 100%

Meeting Date

Voting Result

Jan. 21

Plan on supporting recommendation of outside director candidate

Original proposal approved

For

For

For

For

For

For

Jan. 28

Selecting outside director candidate

Original proposal approved

For

For

For

For

For

For

Feb. 8

Finalization of outside director candidates

Original proposal approved

For

For

For

For

For

For

27

B. Audit Committee

(1) Matters on Audit Institution

(a) Establishment and Method of Organization of Audit Committee (Auditors)

• Purpose of operational regulations for Audit Committee

- To regulate matters necessary for effective operation of Audit Committee

• Rights and Duties

- The Audit Committee may audit the Company’s accounting and business affairs, and demand, whenever necessary, Directors of the Company to report on the relevant matters thereof. The Committee may handle the matters provided for under the relevant statutes, the Articles of Incorporation or the operational rules of the Audit Committee and those matters authorized by the Board of Directors.

• Members of the Audit Committee shall be appointed by a resolution of the general meeting of shareholders, and at least one financial expert must be appointed as a member.

(b) The Audit Committee’s Internal Procedures for Access to Management Information Necessary for Audit

• Types of Meetings

- The Committee shall hold a regular meeting in the first month of every quarter of each year and may hold an extraordinary meeting whenever necessary

• Right of Convocation

- The Audit Committee Meeting shall be convened by the Chairman of the Committee upon the request of the President or a member of the Committee.

• Convocation Process

- The Chairman shall send every member of the Committee a notice specifying date, location and agenda of the meeting through facsimile, telegram, registered mail or other electronic measures, at least 3 days prior to the date of the meeting

• The Committee shall deliberate on or resolve the following matters:

- Matters on the General Meeting of Shareholders

  ·  Request to the Board of Directors to convene an Extraordinary Meeting of Shareholders

  ·  Investigate and testify on agenda of, and documents provided at, the General Meeting of Shareholders

- Matters on Directors and Board of Directors

  ·  Report to the Board of Directors on a Director’s activities that are in violation of relevant statutes or the Articles of Incorporation

  ·  Preparation and submission of Audit Report on financial statements that are to be submitted to the General Meeting of Shareholders

  ·  Injunction on illegal activities of a Director

  ·  Request for a report on the performance of Directors

  ·  Assessment report of operational status of internal accounting management system

28

  ·  Assessment report on Audit Committee

  ·  Matters authorized by the Board of Directors

- Matters on Audit

  ·  Request on performance of Directors or investigation on business and financial status of the Company

  ·  Investigation on subsidiaries under the Commercial Code

  ·  Receipt of report from a Director

  ·  Representation of the Company in a lawsuit between a Director and the Company

  ·  Decision on institution of a lawsuit upon a minority shareholder’s request for institution of a suit against Directors

  ·  Approval for appointment, change or dismissal of an external auditor (the “Auditor”)

  ·  Receipt of reports made by the Auditor on a Director’s misconduct in the course of performing his duties or a material fact that is in violation of relevant statutes or the Articles of Incorporation

  ·  Receipt of reports made by the Auditor on the Company’s violation of accounting standards, etc.

  ·  Assessment on audit of the Auditor

  ·  Assessment on independence of the Auditor

  ·  Pre-approval on services provided by the Auditor

  ·  Auditing plans for the year and the audit result

  ·  Assessment on the internal control system

  ·  Verification of corrective measures regarding audit results

  ·  Approval for appointment and proposal for dismissal of a person in charge of internal audit

  ·  Review of feasibility of material accounting policies and change in accounting estimates

  ·  Review on soundness and propriety of corporate financing and accuracy of financial reports

  ·  Establishment of whistle-blowing system

- Other Matters Provided by the Relevant Statutes and the Articles of Incorporation

  ·  The Audit Committee may, whenever necessary, require internal audit organization to separately report on its audit activities.

(c) Personal Information of Members of the Audit Committee (As of June 30, 2010)

Name	Experience	Note
Joon Park	- Master of Laws(LL.M.), Harvard Law School - Attorney-at-law, Kim & Chang, Seoul - (Present) Professor, College of Law, Seoul National University		Outside director
E. Han Kim	- Ph.D. in Finance, State University of New York - Independent Director, POSCO Non-Executive Chairman of the Board of Directors - (Present) Endowed Chair Professor and Director of Financial Research		Outside director
Jeong Suk Koh	- Ph. D, Management, Sloan School of Management, MIT - MS, Management, Korea Advanced Inst. Of Science and Technology - (Present) CEO, Ilshin Investment Co., Ltd.		Outside director
Hae Bang Chung	- M.A in Economics, Vanderbilt University - 6th Deputy Minister, the Ministry of Strategy and Planning - (Present) Professor, College of Law, Konkuk University		Outside director

29

(2) Major Activities of the Audit Committee (Auditor)

Order	Date	Subject	Result of Discussion	Note
First	Jan.27	Approval of financial statements for 28th term	Original proposal approved	—
		Report of business report for 28th term	Original proposal approved
		Report of final audit for fiscal year 2009	Conditional approved
Second	Feb. 11	Appointment and remuneration of independent auditor for consolidated companies for fiscal year 2010	Original proposal approved	—
		Report on operating result of internal accounting management system of fiscal year 2009	Original proposal received
		Report on operational condition of internal accounting management system of fiscal year 2009 (prepared by audit committee)	Original proposal received
		Report on validity of the audit committee	Original proposal received
Third	Feb. 25	Report on agenda of the annual general meeting of shareholders for 28th term and result on document investigation	Original proposal received	—
		Audit report for the annual general meeting of shareholders for 28th term	Original proposal received
		Report on audit records of 2009 and audit plan for 2010	Original proposal received
		Written opinion on operational status of internal compliance device of the audit committee	Original proposal received
Fourth	Mar. 17	Appointment of the chairman of Audit committee	Chairman appointed	—
		Approval of remuneration of independent auditor for consolidated companies for fiscal year 2010	Original proposal approved
		Report on the result of consolidated statement of account for fiscal year 2009	Original proposal received
Fifth	Apr. 26	Approval of remuneration of independent auditor for consolidated companies for fiscal year 2010	Original proposal approved	—
		Report on statement of accounts for the first quarter of fiscal year 2010	Original proposal received
		Report of audit performance for the first quarter of 2010 and audit plan	Original proposal received
Sixth	June. 24	Report on filing of Form 20-F for fiscal year 2009	Original proposal received	—
Seventh	Jul. 29	Approval of remuneration for audit and non-audit services of independent auditor of consolidated companies for fiscal year 2010	Original proposal approved
		Report on statement of accounts for the first half of fiscal year 2010	Original proposal received
		Report of final audit for first half of fiscal year 2010	Original proposal received
		Report of audit performance for the first half of 2010 and audit plan for third quarter of 2010	Original proposal received
Eighth	Aug. 12	Pre-approval of remuneration of independent auditor for non-audit services	Re-proposed
		Pre-approval of remuneration of independent auditor for consolidated company (KTR) for fiscal year 2010	Original proposal approved

C. Matters on Shareholder’s Exercise of Voting Right

(1) Adoption of Cumulative Voting System

Automatic introduction of the cumulative voting system following the completion of the privatization process in 2002.

30

(2) Adoption of the Written Voting System or Electronic Voting

Adoption of the written voting system in accordance with the changes in the Articles of Incorporation at the 23rd General Meeting of Shareholders (March 11, 2005)

(3) Exercise of Minority Shareholders’ Rights

The minority shareholders’ rights were exercised most recently at the 24th General Meeting of Shareholders in 2006.

24th General Meeting of Shareholders (March 10, 2006)

Shareholder	Contents of the Minority Shareholder’s Right	Purpose of Exercise	Result	Note
Jai Sik Ji and others	Shareholder proposal on the subject matter of the general meeting of shareholders	Recommendation of Outside Director candidates who will also be members of the Audit Committee	Candidates recommended through shareholder proposals failed to be appointed at the General Meeting of Shareholders (cumulative voting)	Article 191-14 of the Securities and Exchange Act
Jai Sik Ji and others	Request for cumulative voting	Request for cumulative voting for appointment of Outside Director candidates who will also be members of the Audit Committee	Candidates recommended through shareholder proposals failed to be appointed at the General Meeting of Shareholders (cumulative voting)	Article 191-18 of the Securities and Exchange Act

D. Remuneration to Executive Officers

(1) Remuneration paid to Directors (including Outside Directors) and Members of the Audit Committee (Auditors)

(Unit: Hundred Million Won)

Category	Total Amount Paid		Amount Approved by the General Meeting of Shareholders	Average Amount Paid per Person		Fair Value of Stock Option	Weight	Reference
3 Non-Independent Directors		8.61	65		2.87	—	—	—
8 Outside Directors		3.7			0.45	—	—	—

*    Performance-based compensation made at year end.

31

(2) Grant and Exercise of Stock Option

As of September 30, 2010 (Unit: Won, Shares)

Holder	Position	Date of Grant	Shares to be given upon exercise	Type of Share	Changed Volume						Unexercised		Period for Exercise	Exercise Price
					Granted		Exercised		Revoked
Jung Woong Kim	Outside Director	9/8/2003	Treasury Shares	Common Shares		7,120		3,596		3,524		0	9/9/2005 to 9/8/2010		41,711
Il Choing Nam	Outside Director	9/8/2003	Treasury Shares	Common Shares		7,120		3,596		3,524		0	Same as above		41,711
Sung Chul Chun	Outside Director	9/8/2003	Treasury Shares	Common Shares		7,120		3,596		3,524		0	Same as above		41,711
Young Ju Cho	Standing Director	9/8/2003	Treasury Shares	Common Shares		43,154		40,809		2,345		0	Same as above		41,711
In Moo Huh	Non-standing Director	9/8/2003	Treasury Shares	Common Shares		28,769		3,236		25,533		0	Same as above		41,711
Ju Young Song	Non-standing Director	9/8/2003	Treasury Shares	Common Shares		28,769		27,245		1,524		0	Same as above		41,711
Min Hee Lee	Non-standing Director	9/8/2003	Treasury Shares	Common Shares		21,577		20,404		1,173		0	Same as above		41,711
Soo Sung Jung	Non-standing Director	9/8/2003	Treasury Shares	Common Shares		21,577		20,404		1,173		0	Same as above		41,711
Seo Hwan Cho	Non-standing Director	9/8/2003	Treasury Shares	Common Shares		21,577		20,404		1,173		0	Same as above		41,711
Hyun Myung Pyo	Non-standing Director	9/8/2003	Treasury Shares	Common Shares		21,577		20,404		1,173		0	Same as above		41,711
Heon Chul Shin	Non-standing Director	9/8/2003	Treasury Shares	Common Shares		21,577		—		21,577		0	Same as above		41,711
Moon Ho Lee	Non-standing Director	9/8/2003	Treasury Shares	Common Shares		21,577		—		21,577		0	Same as above		41,711
Tae Bum Noh	Non-standing Director	9/8/2003	Treasury Shares	Common Shares		21,577		—		21,577		0	Same as above		41,711
Ki-Chul Kim	Non-standing Director	9/8/2003	Treasury Shares	Common Shares		21,577		20,404		1,173		0	Same as above		41,711
Hyun Joon Kang	Standing Director	9/16/2003	Treasury Shares	Common Shares		5,200		—		2,200		3,000	9/17/2005to 9/16/2010		57,000
Hee Chang Noh	Standing Director	2/4/2005	Treasury Shares	Common Shares		60,000		—		16,847		43,153	2/5/2007 to 2/4/2012		54,600
Hong Ki Kim	Outside Director	3/4/2005	Treasury Shares	Common Shares		6,976		—		—		6,976	3/5/2007 to 3/4/2012		42,684
Jae Chul Lee	Outside Director	3/4/2005	Treasury Shares	Common Shares		6,976		—		—		6,976	Same as above		42,684
Ki Kwon Do	Outside Director	3/4/2005	Treasury Shares	Common Shares		6,976		—		—		6,976	Same as above		42,684
Deok Nam Hwang	Outside Director	3/4/2005	Treasury Shares	Common Shares		6,976		—		—		6,976	Same as above		42,684
Hoon Han	Non-standing Director	3/4/2005	Treasury Shares	Common Shares		21,577		—		5,967		15,610	Same as above		42,684
Young Do Hong	Non-standing Director	3/4/2005	Treasury Shares	Common Shares		21,577		—		3,736		17,841	Same as above		42,684
Tae Keun Kim	Non-standing Director	3/4/2005	Treasury Shares	Common Shares		21,577		—		3,736		17,841	Same as above		42,684
Total	—	—	—	—		452,503		184,098		143,056		125,349	—		—

32

The weighted-average of the non-exercise stock option: Won 46,887

(1) In compliance with the Merger Agreement, the former KTF’s unexercised stocks were reflected in adjustment of numbers and exercise price according to the merger ratio (addition of total 319,665 stocks).

(2)    Position is as of the date of the stock option grant.

(3)    Difference between the number of shares granted and the number of shares with stock option unexercised is due to adjustment of number of granted shares that are dependent on management results and duration of continuous service.

33

2. Equity Investment

[As of September 30, 2010] (Unit : In Share, Millions of Won, %)

Name of Company or Item	Purpose	Beginning Balance							Increase (Decrease)								End Balance							Financial Facts (Latest fiscal year)
		Number of Shares		Equity Ratio			Book Value		Number of Shares			Acquisition (disposal)		P/L on Valuation			Number of Shares		Equity Ratio			Book Value		Total Asset		Net Profit
KT Powertel Co. Ltd.	Business promotion		7,771,418		44.9	%		37,419		—			—		4,859			7,771,418		44.8	%		43,454		160,528		13,457
KT Networks Corporation	Business promotion		2,000,000		100.0	%		48,684		—			—		(3,813	)		2,000,000		100.0	%		44,871		142,783		(4,006	)
KT Linkus co., Ltd.	Business promotion		2,941,668		93.8	%		6,282		—			—		988			2,941,668		93.8	%		7,270		89,163		951
Telecop Service Co. Ltd.	Business promotion		5,765,911		88.8	%		26,045							2,170			5,765,911		88.8	%		28,215		130,150		2,443
KT Venture Investment Fund No.2	Investment		5,000		94.3	%		4,780		—			—		19			5,000		94.3	%		4,799		5,099		(19	)
KT Hitel	Active in management		22,750,000		65.9	%		120,078		—			—		(1,446	)		22,750,000		65.9	%		118,632		215,620		(2,982	)
KT Submarine Co., Ltd.	Active in management		1,617,000		36.9	%		24,370		—			—		1,991			1,617,000		36.9	%		26,361		104,166		6,714
KT Commerce, Inc.	Business promotion		266,000		19.0	%		1,782		—			—		(85	)		266,000		19.0	%		1,697		38,390		(446	)
KT Technologies, Inc (Former.KTF Technologies, Inc.)	Business promotion		1,146,962		78.8	%		0		4,000,000			20,000		(20,000	)		5,146,962		93.8	%		0		120,541		(248	)
KT Rental Co., Ltd.	Business promotion		6,800,000		100.0	%		69,074		(181,954	)		112,962		(7,663	)		6,618,046		58.0	%		174,373		994,275		17,235
KT Capital Co., Ltd.	Business promotion		20,200,000		73.7	%		126,092		—			—		13,772			20,200,000		73.7	%		139,864		2,100,911		19,530
Sidus FNH Co.	Business promotion		2,297,000		51.0	%		3,522		—			—		441			2,297,000		51.0	%		3,963		25,114		849
Nasmedia Co., Ltd	Business promotion		1,767,516		50.0	%		23,051							(863	)		1,767,516		50.0	%		22,188		68,701		2,693
Softnix Co.Ltd.	Business promotion		120,000		53.3	%		610							(185	)		120,000		53.3	%		425		958		(348	)
Information Premium Edu	Business promotion		600,000		100	%		3,031		—			—		(1,883	)		600,000		78.5	%		1,148		1,675		(2,123	)
KT New Business Investment Fund No.1	Business promotion		100		90.9	%		10,112		—			10,000		(48	)		100		90.9	%		20,064		22,382		(103	)
KT Data System Co., Ltd.	Business promotion		2,400,000		95.3	%		19,616		—			—		6,474			2,400,000		95.3	%		26,090		95,797		6,339

34

KT mhows Co., Ltd.	Business promotion	510,000-	51.0	%	3,344	—	—	(41	)	510,000	51.0	%	3,303	19,673	(75	)
KT M&S Co., Ltd.	Business promotion	30,000,000-	100	%	37,564	—	—	(11,308	)	30,000,000	100.0	%	26,256	218,351	(15,817	)
KT Music Co., Ltd. (Former KTF Music Co., Ltd.)	Business promotion	14,494,258	48.7	%	17,417	—	—	(15	)	14,494,258	48.7	%	17,402	34,527	2,681
KT Innotz	Business promotion	600,000	60.0	%	3,000	—	—	(1,522	)	600,000	60.0	%	1,478	2,506	(2,537	)
KT Capital Media Contents Investment Fund No. 2	Business promotion	—	43.5	%	3,045	—	—	0		—	43.5	%	3,045	7,133	(1	)
Gyeonggi-KT Green Growth Investment Association	Business promotion	—	40.3	%	12,480	—	—	79		—	40.3	%	12,559	31,150	196
KT Estate	Business promotion	—	—		—	1,600,000	8,000	(399	)	1,600,000	100.0	%	7,601	7,616	(399	)
KT Stratigic Investment Fund No. 1	Business promotion	—	—		—	100	10,000	0		100	90.9	%	10,000	11,052	0
Korea Telecom America, Inc.(USA)	Business promotion	6,000	100.0	%	4,064	—	—	2		6,000	100.0	%	4,066	5,638	93
Korea Telecom Japan Co., Ltd.(Japan)	Business promotion	12,856	100.0	%	3,995	—	—	503		12,856	100.0	%	4,498	14,515	177
Korea Telecom China Co., Ltd.(China)	Business promotion	—	100.0	%	2,160	—	—	(11	)	—	100.0	%	2,149	2,164	(8	)
New Telephone Company, Inc. (Russia)	Business promotion	5,309,189	80.0	%	168,654	—	—	6,728		5,309,189	80.0	%	175,382	235,981	25,255
KTSC Investment Management B.V.	Business promotion	82,614	60.0	%	36,275	—	—	(3,111	)	82,614	60.0	%	33,164	60,164	(2,099	)
PT.KT Indonesia	Business promotion	198,000	99.0	%	108	—	—	(108	)	198,000	99.0	%	0	70	(128	)

35

VI. Employees

1. Current Status of Employees

(Unit: Persons, Years, Millions of Won)

Type	Number of Employees						Average Years in Continuous Service		Total Payroll		Average Payroll per Person		Note
	General		Other		Total
Total		30,660		200		30,860		18.3		1,361,749		44.25		—

1) Number of employees: As of September 30, 2010 (excluding executive directors)

2) Average years in continuous services: Average number of years calculated by employees providing services as of September 30, 2010

3) Average payroll per person: Calculated by average number of employees (30,773) over the first nine months.

* Average payroll per person = total payroll offirst nine months /average number of employees of first nine months.

36

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: December 9, 2010
KT Corporation
By:	/s/ Thomas Bum Joon Kim
Name:	Thomas Bum Joon Kim
Title:	Managing Director
By:	/s/ Young Jin Kim
Name:	Young Jin Kim
Title:	Director

37