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KT first-quarter net profit up 166.9%

30 Apr 2010

South Korea’s KT Corp has revealed that, on the back of the completion of its merger with former mobile subsidiary KTF Corp, net income for the three months ended 31 March 2010 more than doubled. The operator posted a net income of KRW372.5 billion, up 166.9% year-on-year compared to KRW139.6 million (USD335 million) in 1Q 2009. The integration of KTF also boosted consolidated revenue, which rose by 73.9% against the same period a year earlier to KRW4.82 trillion, although revenues from fixed line voice services continued to fall, down 11.4% against 1Q 2009 at KRW1.12 trillion, with subscriber numbers declining by 9.5% to 17.6 million; this was offset slightly by increases in the number of VoIP subscribers, up a staggering 290% to 1.97 million. Earnings before interest, tax, depreciation and amortisation (EBITDA) were KRW1.25 trillion, a 43.6% y-o-y increase. In terms of wireless subscribers, KT’s total customer base rose by 5.6% to 15.37 million, with the number of fixed line broadband subscribers also climbing, at 7.09 million.

Similarly to rival SK Telecom, which as previously reported by CommsUpdate revealed its financial results yesterday, KT saw marketing costs jump as the battle for smartphone customers continued. KT has looked to steal a march on its competition with the introduction of the in-demand iPhone, and for the three months ended 31 March 2010 it noted that marketing costs, including sales promotion and advertising, were 26.3% higher than the same quarter last year, at KRW714.1 million. The country’s telecoms regulator, the Korea Communications Commission (KCC) announced last month that operators would be required to limit marketing spends, with expenses capped at no more than 22% of total revenue in 2010; the limit will fall to 20% from 2011.

South Korea, KT Corp

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