Lee Gyu-lee is a business writer at The Korea Times, focusing primarily on IT & telecommunications, the Ministry of Trade, Industry and Energy and KOTRA. Prior to this, she has covered a wide range of cultural news, from film, television and K-pop to lifestyle and fashion.
Telecom firms forecast over $682 mil. in combined operating profit
A person walks by a mobile phone dealership in this file photo. Yonhap
By Lee Gyu-lee
Major mobile carriers — SK Telecom, KT and LG Uplus — are expected to post a combined operating profit of over 1 trillion won ($682.6 million) in the first quarter of this year, signaling a promising outlook for overall growth throughout the year.
According to the market tracker FnGuide, the three firms' total first-quarter revenue is estimated at 15.22 trillion won, with combined operating profits of 1.544 trillion won — marking year-on-year increases of 3.5 percent and 25 percent, respectively.
The projected achievement comes as the firms have shifted focus to artificial intelligence (AI) investments and service expansion after undergoing workforce restructuring and system upgrades last year.
The firms were also able to cut expenses with the government abolishing the Mobile Device Distribution Improvement Act last July, which helped reduce market overheating when new products are launched and the completion of joint 5G network construction.
KT is expected to see the highest operating profit at 775.2 billion won, grossing about 7.055 trillion won in revenue.
KT generated profits with its real estate subsidiary, KT estate’s property sales while saving operating costs from last year’s workforce restructuring, which included mass voluntary retirements. The company has also been expanding global corporate clients, including a strategic partnership with Microsoft last year.
Under the partnership agreement, the two have been working together on joint AI and cloud R&D projects, developing Korean-style AI, cloud and IT services and establishing an AI and cloud innovation center. KT plans to introduce Korean-optimized AI within the second quarter.
SK Telecom’s revenue is projected at 4.5082 trillion won, with an operating profit of 526 billion won for the quarter. In January, the company recently opened an AI data center in Gasan, Geumcheon District, Seoul, launching GPU-as-a-Service, an AI cloud-based service that provides on-demand access to powerful GPUs.
The new data center is part of the company's effort to further pave the way into the AI infrastructure business. Last month, the company announced that it would be implementing an AI Pyramid 2.0 strategy throughout this year, which includes monetizing its B2B AI service, A.Biz, and developing AI data centers and AI-driven businesses.
The company is aiming to complete developing multimodal and inference AI models within the year.
LG Uplus is estimated to generate about 3.657 trillion won in revenue, with an operating profit of 243.2 billion won, reflecting a 10.1 percent increase from last year. This is significant as it marks the first time in three years that its operating profit has grown by double digits.
The company plans to transform its AI assistant service, ixi-O, into a subscription-based model to monetize the service and secure both the B2B and B2C markets, alongside its data center business.