South Korea’s mobile operators expect their combined revenues to drop this year as mobile broadband penetration in the hyper-connected country nears saturation point.
Total revenue (fixed and mobile) from the three major operators — SK Telecom (SKT), KT and LG Uplus – is forecast to decline 5 per cent this year to KRW49.5 trillion ($42 billion), the Korea Herald reported.
The country’s mobile broadband penetration rate is now 99 per cent and the SIM penetration rate is 112 per cent, according to GSMA Intelligence.
Subscriber growth in the country has slowed over the past few years. And regulations introduced a year ago to curb what the regulator called “excessive subsidies” have further contributed to the slowdown.
The country’s second largest operator KT predicts its total revenue will drop 8.7 per cent this year to KRW21.8 trillion, while market leader SK Telecom expects revenue to fall 4 per cent to KRW17.1 trillion. Number 3 LG Uplus is forecasting almost a 3 per cent revenue fall to KRW10.6 trillion ($9 billion).
SKT last month reported a 2.4 per cent drop in its Q3 revenue to KRW4.26 trillion. Mobile revenue fell 2.8 per cent to KRW2.74 trillion, due to more subscribers choosing mobile fee discounts based on their contracts, the company said.
LG Uplus’ revenue peaked at $10.4 billion in 2013, then fell to $10 billion last year. Looking for new growth areas, the operator is focused on strengthening its network and preparing for Internet of Things (IoT) applications, such as IoT @Home, which it launched earlier this year for $6 a month.
4G penetration has climbed from just under 50 per cent two years ago to nearly 70 per cent. 4G users represented 67 per cent of SKT’s total customers in Q3, 71 per cent of KT’s and 86 per cent of LG Uplus’, according to GSMA Intelligence.