KT's 5G Splurge Hits Profits in 2019

KT revealed the cost of its efforts to be a global 5G frontrunner, reporting a massive hike in capex during 2019 that was driven primarily by investments in its 5G network.

The South Korean telco, which together with local rivals SK Telecom and LG Uplus launched 5G services in April 2019, said total capex increased to KRW3.26 trillion (US$2.7 billion) in 2019, up from KRW1.977 trillion ($1.69 billion) in 2018. Of the total spent in 2019, KRW2.2 trillion ($1.86 billion) was attributed to its 5G access network.

The cost of building 5G had a corresponding effect on annual profits, with an 8.8% year-on-year decline in operating income to KRW1.15 trillion ($971 million) and a 12.2% drop in net income to KRW669.3 billion ($565 million). On a quarterly basis, operating income fell 52.5% to KRW148.2 billion ($125 million) in the fourth quarter. Revenue for the full year was up 3.8% at KRW24.3 trillion ($20.5 billion).

KT ended 2019 with 1.42 million 5G subscribers, but the rate of growth slowed in the fourth quarter to 364,000 5G additions, compared with 636,000 in the previous quarter. 5G subscribers now account for 10% of overall handset subscribers, KT said. The total number of wireless subscribers reached 21.9 million at the end of 2019, with net additions of 802,000 during the year.

In terms of 5G subscriber numbers, KT is still ranked second in South Korea. According to the Yonhap News Agency, the total number of 5G subscribers in South Korea reached almost 4 million in October 2019 and was expected to exceed 5 million by the end of the year. SK Telecom was said to account for 44.4% of the October figure, followed by KT with 30.4% and LG Uplus with 25.1%.

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Anne Morris, Contributing Editor, Light Reading

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