KT recorded a double-digit profit gain in the first quarter of 2019, as strong growth in its media and content business combined with rising equipment sales to offset flat mobile turnover.
Koon Kyung-keun, CFO, said on an earnings call the company expects a positive turnaround in mobile revenue and ARPU in the second half of the year as the impact of new 5G subscriptions is felt.
As it focuses on expanding 5G coverage, the operator expects capex for 2019 to increase to KRW3.3 trillion ($2.8 billion), from KRW1.98 trillion in 2018.
Koon said the higher investment required for 5G is “necessary for our competitiveness and essential for our long-term growth”. However, the outlay is already showing signs of paying off as 85 per cent of early 5G customers chose unlimited data plans priced above KRW80,000.
Net profit for Q1 grew 15.9 per cent year-on-year to KRW260 billion. Operating revenue was up 2.2 per cent to KRW5.83 trillion, mobile service revenue was flat at KRW1.3 trillion and merchandise sales increased 3.8 per cent to KRW879 billion.
Revenue at its media and content business, covering IPTV and e-commerce services, grew 15.7 per cent year-on-year to KRW641 billion. Wireless revenue fell 2.7 per cent to KRW1.17 trillion, with broadband turnover flat and fixed telephony services down 8.6 per cent.
The company added nearly 1 million new subscribers in the year to end-March, taking its total to 21.3 million. LTE penetration edged up to 81.5 per cent from 77.9 per cent at end in Q1 2018.
Mobile ARPU dipped 2.4 per cent from the 2018 quarter to KRW31,496.
Capex for the quarter totalled KRW552 billion, with spending on the access network accounting for nearly 76 per cent of the total.Subscribe to our daily newsletter Back