LG Telecom offers user-friendly pricing

By Kim Yoo-chul

Staff reporter

LG Telecom ― the nation's smallest telecom carrier after SK Telecom and KT ― said Tuesday it will introduce price-friendly charging services in a bid to boost the number of its subscribers.

During a news conference, LG Telecom CEO Lee Sang-chul said a possible fall in its operating profit will be offset by a series of new billing plans that will draw a large number of new subscribers.

"LG Telecom's operating profit will decrease due to the latest accounting measures. In the meantime, we expect more new customers," Lee said.

"LG is ready to take on any short-term operating risks,'' according to the top company executive.

LG Telecom, which merged fixed-line affiliates LG Dacom and LG Powercom last year, has seen stalled growth in its local market share.

It had 17.9 percent of the mobile phone market at the end of April, compared with SK Telecom's 50.7 percent and KT's 31.4 percent, according to latest government data.

LG said it will offer a maximum 50 percent discount to a subscriber who sign on the company's "Yo" and "OZ 070" services. The two services will be launched in July.

"The charging limit of our 'Yo' service will be fixed at 90,000 won, 120,000 and 150,000 won, respectively. If a customer chooses the 150,000 service, LG will give the subscriber an additional 150,000 won worth of service for," Lee said.

Mobile phone charges are the key earnings sources for the nation's top three telecom companies.

Lee said LG won't "rapidly" cut the amount of subsidies for promotions to newcomers.

When asked for the target number of subscribers, the executive declined to comment but said the firm will boost spending to construct an advanced telecom infrastructure after subscriber numbers double.

Smartphone bets

Lee said LG forecast smartphones will take up 40 percent of the company's handsets by the end of this year ― it will launch seven to eight in 2010 after lagging behind bigger rivals.

"We've seen strong demand for the recently-released Optimus Q mobile phones manufactured by LG Electronics. LG Telecom has been in talks with Samsung Electronics to introduce more smartphone models," he said.

In terms of mobile applications, Lee said the unit has been strengthening alliances with domestic portals, adding the amount of information given by portals will be larger than that provided by application stores.

Smartphone users will account for 9 percent of Korea's total mobile-phone subscribers in 2010 and 17.8 percent in 2011, a local brokerage of Korea Investment & Securities said.

Analysts expect sales of smartphones in Korea to reach 5 million this year compared with fewer than 1 million in 2009.

Seoul-based LG Telecom has reported first-quarter profit rose more than five-fold on higher sales of high-speed Internet services.

The LG telecom executive said it will expand its number of WiFi-enabled spots to 11,000 as the company has the edge in access point (AP) numbers.

"LG will start to provide 4G services from 2013, initially in metropolitan areas."