LG Uplus’ net profit slumps in 1Q14 as marketing costs rise

29 Apr 2014

South Korean multi-service operator LG Uplus saw net profit plunge in the first quarter of 2014 as the company increased marketing costs with a view to offsetting lost business during a suspension period between 13 March and 4 April. In the three months ended 31 March 2014 LG Uplus recorded a total turnover of KRW2.780 trillion (USD2.5 billion), down 2.8% against the KRW2.859 trillion generated in 1Q13. Service revenues in the first three months of 2014 totalled KRW2.016 billion, representing a 9.1% year-on-year increase, attributed to the operator’s burgeoning 4G subscriber base. However, this was more than offset by a 24.4% decline in handset revenues (KRW760.3 billion in 1Q14) and a 9.5% drop in rental revenues (KRW4.5 billion).

Operating income in the quarter stood at KRW113.2 billion, 8.1% lower than in 1Q13, with the drop attributed to increased marketing expenses, which were up by 22.6% at KRW551.1 billion in 1Q14. Earnings before interest, tax, depreciation and amortisation (EBITDA) totalled KRW465.6 billion in the first quarter of 2014, representing a 5.1% annual increase, while net income was KRW26.8 billion, a reduction of 63.9% from the KRW74.3 billion recorded in 1Q13.

In operational terms, at the end of March 2014 LG Uplus had a wireless subscriber base of 10.875 million, up 4.9% year-on-year, but down marginally from the 10.874 million recorded at end-March 2013. Of the total, 7.462 million were signed up to the cellco’s LTE-based services, up from 5.202 million a year earlier. In the fixed line arena, PSTN subscriber numbers were also up year-on-year, but down marginally against the last quarter of 2013 at 512,000. Voice-over-internet protocol (VoIP) uptake remained strong, however, with such accesses rising by 11.5% y-o-y (and 3.0% quarter-on-quarter) to reach 4.246 million at end-March 2014. Fixed broadband accesses meanwhile were up by 161,000 over the year at 2.963 million.

South Korea, LG Uplus (formerly LG Telecom),

Subscribe

Subscribe to CommsUpdate to get the day’s top telecom headlines delivered to your email.

Subscribe to CommsUpdate

Feedback

Have feedback, corrections, or story ideas? Send them to editors@commsupdate.com.

Browse Past Issues

Filter

Filter CommsUpdate by the following categories or use the search.

Search

Visit our help page information on performing advanced searches, including how to restrict the results by country or company.

Advertise

CommsUpdate is an outstanding advertising venue for companies seeking to reach:

  • International carriers
  • Wholesale service providers
  • Equipment and software vendors
  • Telecom investors
  • Regulators

Learn more about advertising on CommsUpdate.

Share