By Kim Yoo-chul
The local equity market has continued on an upward spiral on the back of a strong economic rebound. However, it is still uncertain whether IT shares will maintain a bullish run due to the uphill competition in the industry.
Shares of KT and SKT have continued to rise in line with the growing popularity in smartphones. KT is an exclusive local partner to sell Apple’s iPhones, while SK Telecom is the loyal partner of Samsung for the Galaxy S smartphones.
But it seems quite uncertain whether the shares of the carriers will go over “box trading” due to market volatilities. But stock analysts are giving more credit to the growth potential of KT shares.
KT has been pressed to secure its bottom line over its smartphone customers as a delay in launching the iPhone 4 had allowed its rival SK Telecom to gain more new customers.
According to the data from the Korea Telecommunications Operators Association (KTOA), KT lost 50,000 numbers customers to rivals including SK Telecom and LG Uplus in July mainly due to SK Telecom’s aggressive promotions for the Galaxy S.
With the need for more money in marketing, KT is also being challenged to soothe investors’ concerns over a fall in profitability as it has been engaged in a “toe-to-toe” competition with SK Telecom in the wireless-related market.
Despite such negative factors, KT shares are emerging as the most lucrative among other telecom stocks amid the blurring line dividing the wireless and broadband arenas thanks to its stronger wireless network.
While SK Telecom executives were mum in announcing any forecast for its stocks, KT executives have just joined in the ranks of analysts of persuading investors to buy their shares.
“I think KT shares are too undervalued.
KT has been maintaining policy consistencies to boost our bargaining power in the nation’s wireless data market, increasing the sales of the average revenue per user (ARPU) over the previous quarters,” said Pyo Hyun-myung, the president of KT’s mobile division, Tuesday.
KT plans to release the iPhone 4, possibly from September as Apple officially filed the device with the nation’s telecom regulator last week.
Separately, it has been in talks with Apple to introduce the table-style PC - the iPad - from the third quarter, though KT spokeswoman Kim Yoon-jeong and the representative of Apple’s local branch Steve Park declined to confirm this.
In a report to clients, Bank of America- Merrill Lynch said it won’t change its “buy” position on KT shares, citing the explosive growth of KT’s mobile data business.
an SK Telecom spokeswoman, said the company is positive about achieving this year’s goal despite market uncertainties.