KT Corp., South Korea’s second-largest mobile operator, reported near 30 percent tumble in operating profit in the second quarter versus previous three months and year-ago period due to sharp cost increases for the launch of 5G network service.
The telco in a regulatory filing on Wednesday said its consolidated operating profit in the second quarter ended June came at 288.2 billion won ($237.5 million), down 28.3 percent from the first quarter and 27.8 percent from the same period last year. Its net profit also contracted 21.8 percent on quarter and 27.6 percent on year to 203.0 billion won. Revenue, however, gained 4.5 percent on quarter and 5.0 percent on year to 6.1 trillion won.
Shares of KT lost 2.33 percent to 27,250 won in Seoul on Wednesday.
The company claimed its bottom line suffered on heavy marketing expenses to promote its fledgling 5G service as well as investment to beef up the next-generation network.
The mobile business recorded 1.7 trillion won in revenue, down 1.2 percent from a year earlier. But revenue from the wireless service, in general, has been on an upward trajectory with average revenue per user growing 0.8 percent from the previous quarter to reach 31,745 won.
As of the end of June, KT had total 420,000 5G service subscribers, with more than 82 percent of them subscribed to its unlimited 5G data plan. The net addition in mobile network operator subscriptions reached 203,000.
Revenue from wired business was 1.2 trillion won, up 0.6 percent from a year earlier. The number of subscribers to its ultra-fast gigabit internet subscribers reached 5.22 to account for 59 percent of its entire internet subscribers. The number of subscribers to its premium 1-GiGa internet service topped 1 million.
Media contents business also fared well, with revenue growing 15.9 percent on year to 689.9 billion won. The number of IPTV subscriptions marked 8.11 million, with a net addition of 147,000.
Revenue from its financial business contracted 1.9 percent on year to 849.8 billion won due to the fall in credit card commission fees. Other services delivered revenue of 616.1 billion won, up 3.3 percent, led by IT services and internet data center business.
“The company performed well in various business areas including 5G, mobile, media contents, and artificial intelligence,” said Yoon Kyung-keun, chief financial officer of KT. “We will continue to offer the best network service to lead the 5G market,” Yoon added.
By Lee Sun-hee and Cho Jeehyun
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]