South Korea’s three wireless carriers - SK Telecom Co., KT Corp., and LG Uplus Corp. - suffered from the government-led cut in wireless fees, but managed to mitigate losses through internet media businesses.
According to the three mobile carriers on Friday, their combined operating profit for the July-September period based on the new accounting rules reached 901.7 billion won ($802.9 million), down 8.3 percent from a year ago. Sales also declined 1.5 percent to 13.1 trillion won during the same period.
Industry leader SK Telecom reported the most sluggish earnings in the third quarter.
The company’s operating income plunged 22.5 percent on year in the third quarter due to government policy to bring down mobile fees. KT also reported a 2.1 percent decline during the same period while LG Uplus showed 6.5 percent increase thanks to brisk sales of Internet Protocol Television (IPTV).
Mainstay mobile business suffered most. Their combined revenue from mobile business in the third quarter reached 5.6 trillion won based on the old accounting rules, down 5.8 percent from a year ago. SK Telecom reported the largest 8.5 percent decline in mobile revenue, followed by LG Uplus with 5.3 percent and KT with 2.1 percent.
The plunge is due to the 25 percent discount in mobile fees for new subscribers and low-income consumers under a government mandate.
The three carriers, however, managed to make up some losses with its IPTV business.
The combined revenue from IPTV reached 935 billion won in the third quarter, up 23.1 percent from a year ago, thanks to increased number of subscribers as they turn to content from IPTV network, a shift from cable TV. Demand increased for children’s and education content.
LG Uplus reported the highest growth in IPTV business with a 31.5 percent surge in revenue. SK Telecom also reported a 26.3 percent gain, mainly led by its IPTV subsidiary SK Broadband Co. whose quarterly operating income reached an all-time high of 42.2 billion won.
By Lee Sun-hee and Lee Eun-joo
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]