LG Uplus reaps larger growth than bigger players in Q2

LG Uplus, South Korea’s smallest mobile carrier in terms of subscription, revenue and profit, reaped bigger growth in its second-quarter earnings than the top two players SK Telecom and KT, according to earnings announcements Thursday.

LG Uplus posted 15.5 percent growth in operating profit in the second quarter compared to the same period last year, due to growth in its wireless and telecommunications service businesses. 

The company’s second-quarter sales stood at 3 trillion won ($2.7 billion), up 4.5 percent from a year earlier, while its operating profit recorded 208 billion won.

Of the total new subscribers to the long term evolution network in the second quarter, 11.55 million, or 90 percent of the new subscribers, chose LG Uplus, the company said, which significantly contributed to the growth of its wireless profit.

The number of subscribers to LG’s Internet Protocol television service surged 15.9 percent to 3.3 million compared to June last year, helping boost its telecommunications business.

LG has been enhancing its focus on Internet of Things service for homes. It has currently secured 800,000 subscribers.

The company’s IoT business is forecast to get a further boost, as LG and KT, second largest in terms of subscribers, are scheduled to commercialize the Narrowband-IoT network across the whole country in the second half of the year.

“LG’s fully dedicated to strengthening leadership in the IoT business with the expansion of the NB-IoT network soon, which will help continue overall growth at a steady pace,” said Lee Hyuk-joo, chief finance officer at LG Uplus.

Meanwhile, SK Telecom announced a 1.8 percent on-year rise in its revenue, which was 4.35 trillion won, and a 3.9 percent increase in operating income, which was 423.3 billion won, for the April-June period.

The No. 1 mobile carrier in Korea in terms of subscribers said the company could achieve the growth owing to the improved performance of its subsidiaries including SK Broadband, an ultra-high definition set-top box provider, and SK Planet, an operator of e-commerce platform 11st.

“Despite the challenges in the mobile telecommunications market, SK Telecom posted improved results due to the strengthened performance of its main subsidiaries,” said Ryu Young-sang, chief finance officer of SK Telecom. “SK Telecom will become a global leading ICT company by achieving meaningful growth in media and IoT, while maintaining leadership in the mobile network operations business.”

KT will announce its second-quarter earnings Friday. Market observers project KT to post 5.7 trillion won in sales and around 400 billion won in operating profit, a slight reduction from a year earlier.

By Song Su-hyun (song@heraldcorp.com)