Korean mobile carriers’ earnings slip as race for LTE heightens

Korea’s three telecommunications companies, SK Telecom, KT and LG Uplus reported poor earnings in the fourth quarter that ended in December, 2011.

Despite the sluggish incomes, the three manufacturers have expanded investment into LTE (long-term evolution) networks as the competition for better connectivity has become intense.



Q4 results

Sales: 3.9 trillion won ($3.5 billion)

Net income: 196 billion won ($175.2 million)

Operating profit: 329.4 billion won ($295 million)

The largest mobile carrier SK Telecom’s net income tumbled 61 percent to 196 billion won or $175.2 million in the quarter, compared with 502.5 billion won a year earlier. Operating profit also slid 36 percent to 329.4 billion won from 512.2 billion won in the previous year.

SK Telecom reported strong wireless Internet sales and profits from non-telecommunications business including its e-commerce sites.



Q4 results

Sales: 6.4 trillion won ($5.7 billion)

Net income: 210.6 billion won ($188.6 million)

Operating profit: 287.6 billion won ($257.5 million)

The largest landline-operator and second-largest mobile carrier, KT was the only company that enjoyed a profit increase. Its net profits rose by 13 percent to 210.6 billion won or $188.6 million in the quarter, compared with 187.1 billion won a year ago.

However, the operating profit decreased 17 percent to 287.6 billion won due to a decline in phone charges as the company was pressured from the government to discount its mobile fee rates. The rise of marketing costs also contributed to the loss.

Q4 results

Sales: 2.5 trillion won ($2.2 billion)

Net income: loss of 64.2 billion won ($57.5 million)

Operating profit: 40.6 billion won ($36.4 million)

The smallest telecom company LG Uplus reported a net loss of 64.2 billion won or $57.5 million in the quarter, compared with a loss of 49.2 billion won a year ago.

The company plans to expand its investment in LTE network construction by 15 percent this year.