South Korea’s second largest operator KT reported strong results for Q2, with double-digit gains in operating income and growth in its wireless, broadband and media units more than offsetting the continued decline in its telephony business.

The operator’s net income dropped 20.7 per cent to KRW255 billion ($220 million) due to a one-off gain a year ago from the sale of a subsidiary, while EBITDA during the quarter rose 4.3 per cent to KRW1.257 trillion. Rival SK Telecom also last week announced a similar fall in profit.

“KT’s operating income increased 15.8 per cent year-on-year to KRW427 billion in Q2 on the back of the solid performance in its core businesses and effective cost controls,” said Gloria Tsuen, a Moody’s VP and senior analyst.

Revenue grew by 4.5 per cent year-on-year to KRW5.68 trillion. Service revenue rose 4.4 per cent to KRW5.04 trillion, with wireless service turnover up 2.2 per cent year-on-year to KRW1.67 trillion.

4G growth
Its LTE user base reached 13.6 million by the end of June, representing 74.1 per cent of its 18.4 million mobile subscribers (compared to SK Telecom’s 20 million+ base, accounting for 68.7 per cent of its total subscribers).

KT’s ARPU rose 1.3 per cent year-on-year to KRW36,527 ($31.57) at end-June, helped by increased data usage.

Its wireline business was down 1.1 per cent to KRW1.29 trillion, as a 12 per cent jump in broadband revenue couldn’t offset an 11.5 per cent drop in fixed voice revenue. GiGA internet subscribers totaled 1.73 million at the end of the quarter, accounting for more than 20 per cent of its total internet customers.

The operator’s media and content business expanded 15 per cent to KRW471 billion, driven by continued growth of IPTV ARPU on an improved subscriber mix, it said. IPTV subscribers reached 6.8 million, with net additions of 140,000 in Q2.

Through continued cost controls, KT’s operating expenses grew at a slower rate than its revenue, up only 3.7 per cent year-on-year to KRW5.25 trillion in Q2, Moody’s said.

The company’s marketing expenses, however, grew by 2.6 per cent to KRW691.6 billion due to higher handset sales and increased promotional activities for its GiGa business.