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Mobile carriers set for robust Q3 earnings on increased 5G subscribers: poll

All News 08:00 October 02, 2020

SEOUL, Oct. 2 (Yonhap) -- South Korean mobile carriers are tipped to post improved earnings in the third quarter this year on the back of increased 5G subscribers, analysts said Friday.

The combined operating profits of the country's three major telecom operators -- SK Telecom Co., KT Corp. and LG Uplus Corp. -- are estimated at 898.1 billion won (US$765 million) in the July-Sept. period, compared with 770.4 billion won the previous year, according to a poll by Yonhap Infomax, the financial arm of Yonhap News Agency.

The upbeat forecast comes as new 5G phones from Samsung Electronics Co., such as the Galaxy Note 20 and the Galaxy Z Fold 2, propelled the country's transition to the pricier high-speed network and helped carriers' bottom lines.

Samsung Electronics Co.'s new 5G phone, the Galaxy Z Fold 2, is displayed at KT Corp.'s store in central Seoul on Sept. 11, 2020. (Yonhap)

South Korea had 7.9 million 5G subscriptions as of July, up half a million from the previous month and accounting for 11 percent of the country's total 69.8 million mobile accounts, according to ICT ministry data.

South Korea was the first country to release the latest generation network in April last year.

"The net increase in 5G subscribers in August is expected to reach 700,000, while the figure in September will likely expand," Kim Hong-sik, an analyst at Hana Financial Investment Co., said in a report. "The rise in mobile revenues on the back of the increase in 5G subscribers will be in full-swing from the third quarter."

Analysts expect LG Uplus Corp. to post the largest rise in operating profit in the third quarter at 219 billion won, up 41 percent from the previous year, thanks to its robust mobile business.

"The healthy stream of new subscribers in the third quarter is expected to lead to improvements in mobile services sales," Shin Eun-jung, an analyst at DB Financial Investment Co., said.

The carrier had 14.5 million mobile subscribers in July, accounting for 21 percent of the total.

SK Telecom's operating profit is also expected to jump 14 percent to 345 billion won over the same period, while KT's operating profit is forecast to rise 7 percent to 334 billion won.

The country's growth in 5G users is expected to continue in the final quarter, with the release of Apple Inc.'s new iPhone and data-intensive services such as cloud gaming.

SK Telecom Co.'s 5GX Cloud Game service, launched in partnership with Microsoft Corp., is shown in this file photo taken on Sept. 22, 2020. (Yonhap)

"If Apple's new 5G model is released in late October, a net monthly rise of one million 5G users could be possible from November," Kim said.

As for cloud gaming, SK Telecom has partnered with Microsoft Corp. to launch its Xbox console game streaming service earlier this month, while LG Uplus has offered Nvidia Corp.'s GeForce NOW service since last year.

KT launched its own platform GameBox last month by partnering with Taiwan-based cloud gaming firm Ubitus Inc. and has racked up over 40,000 users within a month of its release.

The three carriers promised earlier this year to commit 25.7 trillion won into updating their network infrastructure and to establish a nationwide 5G network by 2022.


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