KT posts revenue growth but higher costs hit profits

KT Corp has posted sales of KRW6.2 trillion (USD5.7 billion) for the fourth quarter of 2012, up 3.6% year-on-year. However, net income slipped 55% to KRW93.6 billion in the wake of higher spending on 4G infrastructure and marketing. During 2012 the company spent more in a bid to sign up customers that generate higher profit margins. On 24 December though, the Korea Communications Commission imposed a ban on KT, and rivals SKT and LG Uplus, which prevents them from signing up new subscribers. The regulator took the move to punish the operators for offering excessive subsidies to their smartphone users. In KT’s case, the company will not be able to acquire new customers for 20 days starting 22 February. For 2013, KT says that it is targeting sales of KRW25 trillion, up from the KRW23.8 trillion recorded in 2012, and it aims to reduce capital expenditure to KRW3.5 trillion from KRW3.7 trillion.