South Korea’s second largest mobile operator KT reported mixed results in the first quarter of the year as it posted a double-digit profit gain but flat mobile revenue and ARPU down from a year ago.
The operator’s net profit during the quarter rose 12.6 per cent year-on-year to KRW252.5 billion ($235 million) on operating revenue of KRW5.84 trillion, which was up 4 per cent. Service revenue declined 0.5 per cent to KRW4.92 trillion, with wireless service turnover dipping 0.9 per cent to KRW1.78 trillion. Equipment sales jumped 38.2 per cent from a year ago to KRW916 billion.
KT CFO Yoon Kyung-keun said the decline in mobile revenue was due to continued pressure from the government to lower prices. In September the Ministry of Science raised the level of discount mobile operators must offer customers who sign up for new one- or two-year contracts from 20 per cent to 25 per cent effective from 15 September. The increase was part of President Moon Jae-in’s campaign pledge to reduce telecoms expenses.
Mobile ARPU dropped 4.5 per cent from a year ago to KRW32,993.
The company added 1.14 million mobile subscribers over the past 12 months to end March with 20.4 million subs. LTE users accounted for 77.9 per cent of the total, up 2 percentage points from Q1 2017.
The content and media unit posted an 8.1 per cent year-on-year increase in revenue to KRW585 billion, and its wireline business suffered a 3.3 per cent fall in turnover to KRW1.2 trillion.
Capex during the quarter hit KRW237 billion, accounting for about 10 per cent of the 2018 capex budget set at KRW2.3 trillion.
KT announced in late April it sold its 40 per cent stake in Mongolia Telecom to the government of Mongolia for $2.55 million, 4-Traders reported. The operator acquired the stake in August 1995 for $4.5 million.