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LTE marketing expenses push LG Uplus to net loss in 2Q12

2 Nov 2012

South Korea’s smallest mobile network operator by subscribers, LG Uplus, has revealed a net loss in the three months ended 30 September 2012, as marketing expenses surged as a result of increases in the number of Long Term Evolution (LTE) subscribers on its network and related commissions.

In the three month period under review, LG Uplus posted a net loss of KRW38.4 billion (USD34.6 million) compared to a net profit of KRW56.6 billion in the corresponding quarter of 2011. Marketing expenses by comparison rose to KRW499.7 billion in 2Q 2012, representing a 41.1% increase against the year-ago period. Operating income for LG Uplus’s second quarter meanwhile stood at KRW6.1 billion.

While the company’s bottom line has been impacted by the launch of LTE, revenues have fared better, with LG Uplus generating a total turnover of KRW.2836 trillion in 2Q12, up by more than 19% against 2Q11. Handset revenues accounted for a big portion of that increase, having surged by 38.4% to KRW1.012 trillion.

As at the end of September 2012 LG Uplus said that it had 3.564 million 4G subscribers, up from 2.576 million three months earlier, while total mobile accesses numbered 10.020 million, up 7.7% y-o-y. Fixed broadband subscribers totalled 2.736 million at end-September 2012 (2Q11: 2.833 million), while traditional fixed voice and VoIP accesses stood at 380,000 (370,000) and 3.509 million (3.143 million) respectively.

South Korea, LG Uplus

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