KT Q2 net income rises over 77% on 5G growth

KT Corp maintained double-digit growth in Q2 operating profit, amid ongoing signs that South Korea's 5G investments are bearing fruit. Net income in the April-June period was also up by a sizable 77.4% year-on-year, to 370.8 billion won (US$322 million).

KT, which reports Q2 results a day ahead of SK Telecom (SKT), its bigger rival by market share, said consolidated operating profit increased by 38.5% to 475.8 billion won ($413.6 million). Service revenue increased 2.6% to just over 6 trillion won ($5.2 billion).

KT alone also saw a strong rise in operating profit by 38.1% on revenue growth of 3.2%.

Figure 1: Work it: KT's investment in 5G appears to be paying off finally, according to the latest set of results.
(Source: Daniel Bernard on Unsplash)

Wireless service revenue increased by 4.5% to 1.68 trillion won ($1.5 billion), attributed to "solid growth" in 5G subscribers. The number of 5G subscribers amounted to 5.01 million compared with 4.4 million the previous quarter, and accounted for 35% of total handset subscribers.

The operator said its artificial intelligence (AI) and digital transformation division, which includes its Internet data center business, saw solid growth, with sales rising 6.2% year-on-year to 137.2 billion won ($119 million).

Revenue from KT's content subsidiaries, which include media production-focused KT Studio Genie, increased 16.3% to 211.8 billion won ($184 million).

On the up

KT Corp previously said it is looking to its emerging AI and B2B services to drive growth in 2021 and bring about "tangible results" in its transition to digital platform business.

Revenue from KT's content subsidiaries, which include media production-focused KT Studio Genie, increased 16.3% to 211.8 billion won. Yonhap reported that KT said in the earnings call that Studio Genie will release original content later this year.

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According to the Yonhap news agency, KT aims for its 5G subscribers to account for 45% of its handset users by the end of 2021. It is also banking on the recent launch of its 5G standalone network to drive take-up of industrial 5G use cases.

Juniper Research predicts that over 60% of global 5G connections will be located in the Asia-Pacific region by 2026. By that point, it said total 5G connections are expected to reach 3.2 billion globally, up from 310 million in 2021.

The research company said operators in China, Japan and South Korea "have all implemented lower subscription costs, which have accelerated 5G adoption, thus enabling these subscribers to explore novel services that require 5G connectivity."

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— Anne Morris, contributing editor, special to Light Reading