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South Korean duo report financial results for 2013

29 Jan 2014

South Korea’s largest and smallest cellcos by subscribers, SK Telecom (SKT) and LG Uplus, respectively, have published their financial results for the year ended 31 December 2013.

Market leader SKT generated total revenues of KRW16.602 trillion (USD11.621 billion) in the twelve-month period, a 2.9% year-on-year increase from the previous financial year. It said that despite ‘expanded revenue-decreasing factors brought by the company’s year-round efforts to alleviate customers’ cost burden’, the increase in turnover was in part a result of its strengthened leadership in Long Term Evolution (LTE), as well as the growth of its new businesses including the enterprise solution business. Operating income in 2013 meanwhile rose by 16.2% y-o-y to KRW2.011 trillion, with the operator noting that its heightened focus on service-oriented marketing led had led to reduced subsidy costs. Consolidated net income for FY13 also increased, totalling KRW1.610 trillion, up from KRW1.116 trillion, due to increased equity gains from SK Hynix.

In operational terms, SKT highlighted the fact that by end-December 2013 it had signed up a 13.5 million customers to its LTE-based services, up from 7.530 million a year earlier. Such a figure means that almost half of the operator’s entire wireless subscriber base, which stood at 27.352 million at end-2013, up from 26.961 million, have now switched to, or taken up, 4G. Average churn for 2013 was 2.3%, 0.3% lower than in 2012, while SKT said that quarterly churn had continued to fall.

Commenting on the company’s performance, SKT chief financial officer Hwang Soo-cheol said: ‘In 2013, SK Telecom was able to lead the market towards a service/product-oriented competition, while securing a solid foundation for new growth businesses. Going forward, SK Telecom will maintain its unrivalled market leadership through more sophisticated network technologies and innovative data services that meet the needs and interest of customers.’

Meanwhile, LG Uplus recorded a total turnover of KRW11.450 trillion in 2013, up 5.0% year-on-year from the KRW10.905 trillion it recorded in 2012. While revenues from handsets fell by 7.2% to KRW3.599 trillion, services revenues increases more than offset that drop, rising by 11.7% to KRW7.835 trillion. Operating income for the year totalled KRW542.1 billion, representing a significant improvement from the KRW126.8 billion reported for FY12 due to service revenue growth. However, in the last quarter of 2013 operating income actually slumped by 16.3%, due, LG Uplus said, to an increase in operating expenses. Net income for FY13 stood at KRW297.5 billion, with LG Uplus reversing the net loss of KRW59.6 billion it had registered in the previous financial year.

As at end-December 2013 LG Uplus’ total wireless subscriber base stood at 10.874 million, up from 10.162 million one year earlier. Uptake of the operator’s 4G LTE services has continued apace, and at the end of the reporting period it had 7.089 million such accesses on its books, meaning that almost two-thirds of its customer base had shifted to the newer technology. Churn in 2013 stood at 2.6%, down marginally from 2.9% in 2012, while wireless average revenue per user (ARPU) was KRW38,606, up from 34,493 last year. Fixed broadband accesses, meanwhile, totalled 2.928 million, up 6.7% y-o-y, while traditional fixed voice lines rose to 516,000 from 491,000. Voice-over-IP (VoIP) connections continued to increase, standing at 4.121 million at end-2013, up from 3.617 million a year earlier. IPTV subscriber numbers also increased, standing at 1.550 million at end-2013.

South Korea, LG Uplus, SK Telecom (SKT)

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