LG Uplus Corp., Korea's No. 3 mobile carrier, on Thursday said it shifted to the red in the third quarter from a year earlier due to increased spending on the faster long-term evolution (LTE) network.
Net loss totaled 38.4 billion won ($35.2 million) in the July-September period, reversing from a 56.6 billion won profit a year earlier, the company said in a regulatory filing. Net loss also widened from a 32.1 billion won loss three months earlier.
Sales jumped 19.1 percent on-year to 2.8 trillion won, but operating loss reached 6.1 billion won, plunging from a 95 billion won profit the previous year.
The weaker bottom line was attributed to increased marketing costs to attract subscribers to LTE price plans. Investments in LTE facilities declined from a year earlier, as the company finished setting up its network for the faster network, according to LG.
LG, the smallest of the country's three mobile carriers, has been ramping up efforts to catch up with its bigger rivals through the rapidly growing LTE market.
Marketing costs jumped 41.1 percent on-year to 499.7 billion won as sales commission fees rose in line with the number of LTE subscribers, according to the company.
On the back of aggressive marketing, LG saw the number of its LTE subscribers jump 38.4 percent from the previous quarter, claiming roughly 36 percent of its total subscriber base of 10 million.
The company projected marketing costs related to LTE subscription to trend lower next year as competition cools down and LTE penetration becomes higher.
"Since we have started LTE services this year, we have focused mainly on the growth aspect, which to a certain extent, has undermined profit," said LG Uplus chief financial officer Sung Ki-sup in a conference call.
"We will continue to concentrate on LTE so it will drive up sales revenue. But in terms of overall direction next year, we are going to start to see some balance (in cost and profit)," said Sung.
Meanwhile, Sung said the upcoming release of the iPhone 5 is likely to have limited impact on the company, as the flagship models of local manufacturers, such as Samsung Electronics Co.'s Galaxy Note 2 and LG Electronics Inc.'s Optimus G phones, have acquired subscribers in a "stable manner." LG is the country's sole carrier that has not released Apple Inc.'s flagship phone.
Shares of LG closed at 7,380 won on the Seoul bourse, up 5.88 percent from Wednesday's close. (Yonhap)
Net loss totaled 38.4 billion won ($35.2 million) in the July-September period, reversing from a 56.6 billion won profit a year earlier, the company said in a regulatory filing. Net loss also widened from a 32.1 billion won loss three months earlier.
Sales jumped 19.1 percent on-year to 2.8 trillion won, but operating loss reached 6.1 billion won, plunging from a 95 billion won profit the previous year.
The weaker bottom line was attributed to increased marketing costs to attract subscribers to LTE price plans. Investments in LTE facilities declined from a year earlier, as the company finished setting up its network for the faster network, according to LG.
LG, the smallest of the country's three mobile carriers, has been ramping up efforts to catch up with its bigger rivals through the rapidly growing LTE market.
Marketing costs jumped 41.1 percent on-year to 499.7 billion won as sales commission fees rose in line with the number of LTE subscribers, according to the company.
On the back of aggressive marketing, LG saw the number of its LTE subscribers jump 38.4 percent from the previous quarter, claiming roughly 36 percent of its total subscriber base of 10 million.
The company projected marketing costs related to LTE subscription to trend lower next year as competition cools down and LTE penetration becomes higher.
"Since we have started LTE services this year, we have focused mainly on the growth aspect, which to a certain extent, has undermined profit," said LG Uplus chief financial officer Sung Ki-sup in a conference call.
"We will continue to concentrate on LTE so it will drive up sales revenue. But in terms of overall direction next year, we are going to start to see some balance (in cost and profit)," said Sung.
Meanwhile, Sung said the upcoming release of the iPhone 5 is likely to have limited impact on the company, as the flagship models of local manufacturers, such as Samsung Electronics Co.'s Galaxy Note 2 and LG Electronics Inc.'s Optimus G phones, have acquired subscribers in a "stable manner." LG is the country's sole carrier that has not released Apple Inc.'s flagship phone.
Shares of LG closed at 7,380 won on the Seoul bourse, up 5.88 percent from Wednesday's close. (Yonhap)
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