Higher discounts to slow Korean operator sales growth - Mobile World Live

Higher discounts to slow Korean operator sales growth

15 MAR 2018

South Korean mobile operators’ revenue growth is forecast to slow this year as more than 10 million customers signed up to new mobile plans at a higher discount rate imposed by the government in the space of six months, Yonhap News Agency reported.

In September 2017 the Ministry of Science and ICT raised the level of discount mobile operators must offer customers signing up for new one- or two-year contracts from 20 per cent to 25 per cent. The increase, part of President Moon Jae-in’s campaign pledge to reduce telecoms expenses, faced stiff opposition from operators which were concerned the move would impact profits.

A total of 10.06 million subscribers signed new contracts at the 25 per cent discount rate as of 12 March, the ministry said.

Consolidated revenue of the three operators – SK Telecom, KT and LG Uplus – is expected to increase just 0.3 per cent year-on-year to KRW53.4 trillion ($50.2 billion) this year, data from FnGuide showed. In 2017 their combined revenue increased 3.7 per cent. FnGuide predicts their combined operating profit in 2018 will rise 4.6 per cent to KRW3.9 trillion.

LG Uplus, the third ranked player with a 20 per cent market share, is expected to see sales rise 0.6 per cent year-on-year, with operating income growing 5.3 per cent, Yonhap News Agency reported. Market leader SK Telecom is predicted to post a 0.5 per cent increase in sales and 3.2 per cent gain in operating income, while KT’s sales are expected to be flat with a 5.7 per cent increase in operating income

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Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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