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Mobile carriers likely performed modestly in Q4

All News 09:02 January 11, 2018

SEOUL, Jan. 11 (Yonhap) -- Local mobile carriers are estimated to have performed modestly in the fourth quarter last year, with their sales falling slightly but compensated by boosted operational profit, financial tracker FN Guide said Thursday.

The estimates from FN Guide put the total sales from the three carriers -- SK Telecom, KT and LG Uplus -- at 13.48 trillion won (US$12.59 billion) for the quarter ended in December. The figure is 0.1 percent less than the same quarter of the previous year.

Operational profit was expected to jump 18.2 percent to 842.7 billion won from the increase in the average revenue per user (ARPU), meaning there were more clients signing on for high subscription rates attached to newer smartphones.

The 25 percent subscription discount enacted on Sept. 15 last year did not weigh on sales as initially feared, with about half of the smartphone users sticking to their subscription plans instead of switching to cheaper ones that came with penalty fees for terminating the original subscription contract.

Marketing costs did not shrink much in the measured quarter, the estimates said. Kim Hong-shik of Hana Financial Investment expected the marketing fees to have fallen about 7 percent.

Mobile carriers likely performed modestly in Q4 - 1

By company, SK Telecom's sales for the fourth quarter were predicted to have been 4.45 trillion won, up 2.5 percent from a year ago, with an operational profit of 377.9 billion won, a jump of 25.2 percent. Analysts say much of the increase in operational profit is from the base effect following poor showings in the last quarter of the preceding year.

KT's sales were expected at 5.92 trillion won, down 1.6 percent, with its operational profit jumping 17.5 percent to 265.9 billion won. The actual performance may not meet the estimates due to the cost of marketing for the 2018 PyeongChang Winter Olympics, analysts said.

LG Uplus is likely to have fared the best, with expected sales of 3.1 trillion won, similar to the fourth quarter of the previous year, with an operational profit of 198.9 billion won for a 7.9 percent gain.

The yearly performance for the three carriers was anticipated to be modest, with total sales up 2.7 percent from the former year to 52.65 trillion won. Operational profit was expected to increase 6 percent to 3.94 trillion won.

LG Uplus, ranked the lowest among the three carriers, was viewed as having pulled off the highest growth, with its sales rising 5.2 percent to 12.41 trillion won and operational profit gaining 10.3 percent to 823.4 billion won.

SK Telecom's sales for entire 2017 were estimated at 17.44 trillion won for a growth of 2.1 percent, while operational profit increased 4.8 percent to 1.6 trillion won.

For KT, sales were expected at 23.16 trillion won, up 1.8 percent, and operational profit at 1.51 trillion won, up 5 percent.

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