Korea's two biggest operators have both reported a double digit spike in Q1 operating profit, with signs their 5G investments may be starting to pay off.

SK Telecom, the biggest by market share, said operating earnings had climbed 29% thanks to stronger performances from its mobile, media and security segments.

Rival KT attributed a 15% rise in operating profit to balanced growth across the board.

SK Telecom subs drive growth

SKT's mobile unit increased operating profit by 19% to 307 billion won (US$270 million) as it added another 1.26 million 5G subs for the quarter – its best since the start of service two years ago.

Figure 1: Digital dreams: Both KT and SK Telecom results suggest investment in 5G is beginning to pay off.
(Source: Unsplash)

It now has 6.74 million 5G customers, or 23% of its total, and has raised its year-end forecast from 9 million to 10 million.

The company said 5G revenue growth, the growth in premium customers and stabilization of the mobile market had contributed to the higher mobile earnings.

Total revenue for the quarter was up 7.4% to 4.78 trillion won ($4.23 billion), with operating costs at 5.8%. EBITDA was up 6.9% to 1.42 trillion won ($1.3 billion).

Once again, SKT's portfolio of content and digital businesses were also major contributors.

The broadband and content business grew revenue 18% and operating profit 99%, while the security and care group grew 20% and 9% respectively.

Among its digital operations, the $1.3 billion mobility JV with Uber just started business last month, while Wavve, an OTT content partnership with local TV broadcasters, has announced plans to spend around $880 million on content over the next four years.

To manage its digital services and to maximize the value of its investment in chip giant SK Hynix, SKT has announced a split.

The legacy telco business will become "an AI-based infrastructure company" while SK Hynix and new ICT businesses will go into a new company.

KT puts digital foot forward

KT Corp, also propelled by its mobile and digital businesses, announced operating income of 444.2 billion won ($396.2 million) on a 3.4% rise in revenue.

Wireless revenue improved 2% to 1.77 trillion won ($1.6 billion) as it added 785,000 5G subs for the quarter, taking its tally to 4.4 million.

CFO Kim Young-Jin said the company would maintain its guidance of 4% growth in wireless for the full year.

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He said the company had "aggressively expanded" its digital platform businesses, pointing to the 7.5% growth in the AI, cloud and digital transformation unit.

The broadband business was flat but IPTV sales increased 7%, while affiliates showed signs of a rebound from pandemic-affected Q1 last year, with the BC Card up 5% and the content businesses up 12%.

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— Robert Clark, contributing editor, special to Light Reading