LGT posts near ten-fold increase in profits, but refuses to slash CID charges

South Korea cellco LG Telecom has posted an almost ten-fold increase in net profit for 2005, but caused uproar due to its continued reluctance to cut some of its tariffs. Net profit reached KRW238.6 billion (USD246 million) last year, up 946% on 2004, on the back of a 17.1% rise in revenues to KRW2.68 trillion. However, the better than expected results have turned the attention back on LGT’s refusal to remove, or at least reduce, the price of its caller-identification (CID) service. LGT charges KRW2,000 a month for CID, double the fee charged by its larger competitor KTF, whilst market leader SK Telecom scrapped the fees altogether this month. But LGT has refused to follow SKT’s lead, citing weak financial conditions, though its argument has rightly raised some suspicion given that the cellco’s quarterly ARPU reached KRW40,034 in 4Q05; the first time LGT’s ARPU has surpassed the KRW40,000 mark.