By Kim Yoo-chul
Local brokerage houses are advising investors to buy shares in KT, the nation's top broadband operator and second-largest wireless carrier, citing its balanced business portfolio to exploit the recent trends of converging telecom industries.
They positively evaluated the expanding customer base of KT thanks to the growing popularity of advanced mobile gadgets. Its subscribers for high-speed Internet services are also on the increase.
``We maintain a `strong buy’ position for KT shares as its businesses are attractive and quite balanced involving both the wireless and broadband sectors,’’ Kim Dong-june, an analyst at Eugene Investment, said Tuesday.
The brokerage, which presented 67,000 won as its target price, added that KT’s broadband unit ranging from high-speed Internet, Internet protocol TV (IPTV) and Web-based calls, has recorded firm growth this year.
As of the end of November, KT has been securing a total of 2.65 million smartphone customers including 1.8 million for the iPhone. Also, the number of its Internet users rose by half a million ― the largest increment since 2004, according to KT.
Cancellation rates for the Internet services decreased to a low of 1.1 percent over the third quarter of this year, while its IPTV customers topped the 2 million mark.
Asia’s fourth-largest economy has 3.61 million IPTV subscribers as of this November, according to data from the Korea Communications Commission (KCC), the nation’s top telecom regulator.
For 2010 alone, 1.24 million new customers registered for the Internet-enabled television services.
``The recent investment decision of KT’s affiliate SkyLife was also favorable as the strategic alliance between them will help KT decrease the cancellation rates further for its broadband services,’’ Kim at Eugene said.
Another Seoul-based securities company Daishin Securities expects KT to get more calls from investors because many of its uncertainties have disappeared.
``We maintain a `buy’ recommendation on KT. Our target price is 65,000 won since KT is expected to see more positive momentum throughout next year,’’ Daishin researcher Kim Hoe-jae said.
KT has chalked up pluses in the highly-competitive mobile number portability (MNP) market for five straight months to mark the first time since MNP was introduced in 2004 and Kim said that was mainly due to ``iPhone fever.’’
MNP enables wireless users to switch to other mobile operators without having to change their phone numbers. KT introduced the Apple iPhone here in late 2009, ahead of any of its rivals.
``The average revenue per user (ARPU) in using the wireless data also jumped by 16.3 percent for this year, though KT has seen an increase of data traffic due to an explosive demand for wireless data amid the smartphone frenzy,’’ Kim noted.
KT recently announced that it will actively respond to the increasing data traffic via its distinctive businesses and an early launch of long-term evolution (LTE) strategies, the platform for next-generation telecommunications.