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KT’s third quarter net profit falls amid lower interconnection revenues, new discount plans

7 Nov 2011

South Korea’s KT Corp has posted a 40.7% year-on-year drop in net income on the back of a fall in consolidated revenues. For the three months ended 30 September 2011 KT reported a net income of KRW255.7 billion (USD229 million), down from KRW430.9 billion in the same period a year earlier, while consolidated turnover for the quarter stood at KRW4.99 trillion, down from KRW5.32 trillion in 3Q 2010. With regards to revenues, KT pointed to a substantial drop in merchandise sales, coupled with seasonality as reasons for the general decline, while also noting that turnover from wireless services had specifically fallen as a result of a drop in interconnection revenues and as a result of recently-introduced discount tariff plans. Earnings before interest, tax, depreciation and amortisation (EBITDA) for the three-month period were KRW1.27 trillion, up by just 0.4% compared to the KRW1.26 trillion reported in the same quarter of 2010.

In operational terms, at the end of September 2011 KT’s wireless subscriber base stood at 16.39 million, up 3.5% year-on-year, with the operator also revealing that the number of ‘4G’ WiBro subscribers on its books had risen to 651,000, up from 348,000 a year earlier. Fixed line broadband subscribers meanwhile numbered 7.72 million compared to 7.32 million at end-September 2010. Fixed line voice accesses continued to decline however, standing at 19.23 million, down from 19.43 million a year earlier, although VoIP connections continued rising, climbing 26.8% y-o-y to 3.16 million. Rounding out the operator’s service areas, IPTV customers totalled 2.84 million at end-September 2011, representing a 58.8% annual increase.

South Korea, KT Corp

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