Telecom titan KT Corp. said Monday that its first-quarter earnings dropped 26.6 percent from a year ago due mainly to decreased demand for fixed-line communication services.

Net profit stood at 407.58 billion won ($358.78 million) in the January-March period, compared with 555.21 billion won a year earlier, the country's second-largest mobile carrier said in a regulatory filing.

Sales climbed 9.1 percent on-year to 5.75 trillion won, while operating profit tumbled 20.3 percent to 574.72 billion won.

The weaker bottom line was caused by general sluggishness in the local communications services, KT said, adding fixed-line communication and Internet revenues slumped.

Sales, however, rose thanks to the improved performance of its Internet protocol television and KT Skylife satellite digital broadcasting service, KT said. Better results of BC Card, which was incorporated into KT's consolidated financial statement as of the fourth quarter, contributed to overall improvement in sales, it added.

Industry watchers predict the local communications market may pick up ground with the help of the fourth-generation long-term evolution (LTE) network in the second quarter that could benefit KT. (Yonhap)