5G subscribers rising for all three South Korean MNOs as they publish Q2 financials

10 Aug 2020

Kicking off the publication of financial results by South Korea’s trio of major communications providers, SK Telecom (SKT) reported operating revenues of KRW4.603 trillion (USD3.86 billion) for the three months ended 30 June 2020, up 3.7% year-on-year, noting that turnover had increased in all businesses areas. Operating income for the second quarter totalled KRW359.5 billion, 11.4% higher than in 2Q19, with the growth attributed to ‘increased earnings contributions from subsidiaries’, while EBITDA stood at KRW1.391 trillion, compared to KRW1.294 trillion in 2Q19. Net income, meanwhile, reached KRW432.2 billion, a sizeable 66.8% boost when compared with the year-ago period – due to ‘higher equity method gains on SK Hynix’.

In operational terms, SKT highlighted an acceleration of 5G net adds, with the number of 5G accesses on its books rising by around 700,000 in 2Q20 – on top of 564,000 net adds in the previous quarter – to reach 3.348 million at 30 June 2020. The telco’s overall wireless subscribers also continued to increase, reaching 31.440 million at mid-2020, up from 31.019 million a year earlier. In addition, notable gains were reported for both fixed broadband and pay-TV accesses as a result of the completed merger of SK Broadband and t-broad; at June 2020 SKT’s group-wide fixed broadband subscribers total increased to 6.537 million, up from 5.514 million a year earlier, while pay-TV customers numbered 8.398 million (Jun-19: 4.971 million).

Rival KT Corp, meanwhile, recorded operating revenues of KRW5.877 trillion in 2Q20, down 3.6% against the corresponding period of 2019. Of the total, service revenue accounted for 5.197 trillion, down 0.5% y-o-y, while handset revenues slumped by more than 22%, to around KRW680 billion. More positively, KT’s operating income rose 18.6% on an annualised basis to KRW342 billion, attributed to cost cutting efforts, while EBITDA increased by 5.1% y-o-y, to reach KRW.1253 trillion. KT’s net income for the quarter under review was KRW208 billion, up 2.2%.

With KT’s total wireless subscriber base standing at 22.116 million at the end of June 2020, up from 21.549 million a year earlier, the operator reported that 5G users accounted for 2.237 million of the total, up sharply from 419,000 at 2Q19. In the fixed sector, broadband accesses increased to 9.043 million from 8.849 million at mid-2019, while the number of IPTV subscribers rose to 8.559 million (Jun-19: 8.113 million). Fixed telephony customer numbers continued to decline though, falling to 13.863 million at June 2020, down from 14.554 million a year earlier.

Rounding out the trio, LG Uplus reported a 5.1% annual increase in revenue for 2Q20, to KRW3.273 trillion, with service revenue up 14.2% y-o-y at KRW2.619 trillion to offset a 20.4% drop in turnover from handsets, which fell to around KRW654 billion. Further, the carrier reported a more than 59% y-o-y increase in operating income, to KRW240 billion, which it attributed to ‘efficient expense control’. With EBTIDA also rising by 27.4% against 2Q19 to reach KRW829 billion, LG Uplus recorded a net income of KRW151 billion for the quarter under review, a notable rise from the KRW99 billion it reported a year earlier.

Operational highlights for LG Uplus included a near 8% annualised increase in its total wireless subscriber base, which rose to 15.859 million at 30 June 2020, with 5G subscribers accounting for 1.785 million of the total, up from 387,000 at mid-2019. Broadband accesses were also up, reaching 4.413 million at mid-2020, compared to 4.170 million a year earlier, while IPTV subscriber numbers topped 4.728 million (Jun-19: 4.241 million). VoIP and PSTN voice lines continued a downward trend, however, falling to 3.755 million (Jun-19: 3.901 million) and 486,000 (515,000), respectively.