KT profit spikes 47% on 5G, digital and media growth
Korea's KT Corp has reported a 46.9% bump in Q3 earnings on the back of higher 5G take-up and its fast-expanding digital and media businesses.
Net income was 337.7 billion won ($290 million), with a 3.6% lift in revenue to 6.22 trillion won ($5.3 billion), KT announced Tuesday.
(Source: Newscom / Alamy Stock Photo)
Earnings were boosted by some one-off items, but the telco also hiked operating income 30% to 382.4 billion won thanks to stronger segment performances and a tight rein on operating expenses, up by just 2.2%. The company last year restructured around its telco and digital businesses and said it aims to boost digital revenue from 39% of the total this quarter to 50% in 2025.
Move on up
In its core mobile segment, service revenue grew 3.8% to 1.79 trillion won. 5G subscriptions now total 5.61 million, up from just over 5 million in Q2 and accounting for 39% of its customer base. Wireless ARPU was 32,476 won, up 0.4% sequentially and 2.7% year-on-year.
The company is also reaping the benefit of investments in new digital tech and in Korea's thriving media and content industry. Its AI, digital transformation and data center business grew 29.7% to 161.1 billion won. KT's AI-based contact center has been making sales in the financial services and other sectors and is about to launch an 'AI secretary' solution to small business.
"KT will be the frontrunner in the domestic AI contact center market and will launch many services that employ AI technology," said CFO Young-jin Kim told an earnings call Tuesday.
The IPTV and media business grew 15.9% while the music and TV content subsidiaries expanded by 24.6%, spurred by changing content consumption habits brought on by the pandemic, Kim said. But he warned that KT's Q4 numbers would take a hit from last month's network crash.
Black out
The telco suffered a nationwide outage on October 25, disrupting mobile and internet access for 40 minutes and cutting services ranging from payments to online classes. The company initially blamed a DDOS attack, but then acknowledged it was the result of an error by a staffer carrying out a routine update of its core routers.
The company has said it will pay compensation of up to 40 billion won ($34.1 million) for the outage.
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Kim acknowledged KT's capex had declined in Q3 but said it was because of delays caused by the pandemic and semiconductor shortage. He said equipment orders were roughly the same as last year.
"We think capex spend is going to be concentrated in Q4 so on a per annum basis we will most likely see flat capex."
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— Robert Clark, contributing editor, special to Light Reading
