KT Q1 profit slumps 26.6%

Dylan Bushell-Embling
08 May 2012

South Korea's KT has reported a 26.6% slump in Q1 profit to 407.6 billion won ($358.3 million), despite a 9% increase in revenue.

But the decline was significantly less steep than analysts had been expecting, according to a Bloombergpoll, due to the operator's higher than anticipated mobile revenue.

KT revealed that its total wireless service revenue fell 2.1% year-on-year to 1.43 trillion won. The dip was largely a result of the 1,000 won reduction in base rates that South Korean operators implemented last year at the behest of regulators.

But an increase in higher-value smartphone subscribers to 8.54 million – or 51% of the operator's total wireless subscriber base – and the addition of 351,000 LTE subscribers during the quarter helped arrest the decline in wireless revenues.

Wireless churn meanwhile fell to 2.7%, from 3.1% a quarter earlier.

Total fixed line revenue fell to 1.66 billion won, with around half of this coming from the fixed telephony business.

But revenue from the fixed telephony segment is predictably in sharp decline, having fallen 8.8% year-on-year during the first quarter.

KT's capex grew 30.3% year-on-year, as a result of spending on the operator's LTE network, which launched in January.

The operator went live with LTE months after its rivals, and was forced to delay its launch by a month after a court blocked its earlier plan to shut down its 2G network and refarm the 1,800-MHz spectrum for LTE.

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