Lee Sang-chul LG Uplus Vice Chairman

By Cho Mu-hyun

The quarterly profits of LG Uplus, the nation’s smallest mobile carrier, saw a decline in quarterly profits, due to rising investment in an advanced telecom network known as long-term evolution (LTE) and a cut in mobile charges.

The company posted 68 billion won in operating profit during the first three months of this year — a drop of 24 percent year-on-year, on revenue 2.55 trillion won during the same period. The firm Wednesday reported the result in a regulatory filing to the Korea Exchange.

“The decline of operating profits in the first quarter was due to a cut in monthly mobile charges since November and an increased investment for LTE networks,” said an LG Uplus spokesman.

LG invested 392 billion won to upgrade its wireless networks during the January-March period from 170 billion won that it had invested a year ago, the company said.

It is competing effectively with SK Telecom and KT in the race for LTE as LG was ahead of local rivals for the network investment.

Mobile carriers are migrating to LTE networks impressed by the rapid rise of data-intensive mobile devices such as tablets and smartphones.

Also, the LTE market is regarded as the “it” sector that shouldn’t lose amid the saturation of the local telecommunication market.

As of the end of the first quarter, LG had 1.48 million LTE customers.

By this year, LG plans to increase the number to over 4 million, the company said.

“LG’s local LTE market share was 41 percent in the first quarter, which is impressive,” said LG Uplus Chief Financial Officer (CFO) Shin Yong-sam.

Revenue at its broadband division has fared better thanks to demand for Internet-connected television sets.

LG was the first to complete a nation-wide LTE network among domestic mobile carriers, which cost millions of dollars leading to a deficit last quarter.

But according to the company, the reduction in profits was much less than expected, and it predicts a boost in revenue as more consumers flock to its LTE services.

“We will concentrate on developments to offer quality LTE and premium services for customers,” the Uplus CFO said.

LG Uplus has been the country’s smallest mobile operator but tried to change the corporate hirerchy through the LTE services.