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(2nd LD) LG Uplus snubs Huawei-related security risks, Q2 net sharply up

All News 13:58 August 07, 2020

(ATTN: REWRITES throughout; CHANGES headline, lead)

SEOUL, Aug. 7 (Yonhap) -- LG Uplus Corp., South Korea's No. 3 mobile carrier, said Friday its 5G equipment from China's Huawei Technologies Co. does not pose security risks, downplaying U.S. concerns that they can be used for espionage by China.

Last month, Robert Strayer, the U.S. deputy assistant secretary of state for cyber and international communications and information policy, urged LG Uplus, the only South Korean carrier using Huawei's 5G equipment, to switch to "trusted vendors."

The United States has long accused Huawei, the world's leading vendor of 5G network equipment, of spying, claiming the company can compromise the country's internet communications and steal sensitive information.

"We believe the remarks were about the U.S.' strategic stance," said Lee Hyuk-ju, LG Uplus chief financial officer, during its second-quarter conference call, referring to Strayer's comments. "We are doing all we can on concerns surrounding security issues."

LG Uplus currently uses 5G equipment from four companies, including Samsung Electronics Co., Nokia Corp. and Ericsson. Its Huawei equipment is installed in the wider Seoul area and in Gangwon Province.

LG Uplus Corp.'s corporate logo is shown at the company's headquarters in central Seoul on July 23, 2020. (Yonhap)

Concerns surrounding its equipment come as the company saw a rise in 5G users in the second quarter.

LG Uplus' 5G subscribers represented 11.3 percent of its total subscribers as of the first half of this year, sharply up from just 2.6 percent of the total the previous year, according to the company.

Its total wireless service subscribers stood at 15.9 million in the second quarter, compared with 14.7 million a year ago.

On the back of increasing 5G subscribers, its second-quarter net income reached 150.6 billion won (US$127.2 million) in the April-June period, up 53 percent from 98.5 billion won the previous year.

Operating profit surged 59.2 percent to 239.7 billion won, while sales rose 5.1 percent to 3.27 trillion won over the same period.

The company said sales from its wireless service rose 4.9 percent on-year to 1.35 trillion won in the second quarter.

Going forward, the company said it expects the mobile market to become more active in the second half of the year, with the launch of new premium 5G phones.

Sales from the company's smart home business, which include its IPTV and broadband services, rose 10.5 percent on-year in the April-June period to reach 494.6 billion won.

The company said it had 4.73 million IPTV subscribers as of the second quarter, up 11.5 percent from the previous year.

It added that capital expenditures for the second quarter stood at 625.3 billion won, leading to a total of 1 trillion won spent in the first half of the year.


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