KT reverses ’14 bleeding in results for 2nd quarter

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KT reverses ’14 bleeding in results for 2nd quarter

The telecommunications company KT showed a profit for the second quarter, backed by a reduction in marketing costs and an increase in LTE subscribers.

KT announced an operating profit of 368.8 billion won ($315.1 million), compared to a loss of 837.9 billion won in the same period of 2014.

Last year was a particularly rough one for the carrier as it shed staff and paid employees to retire early while also spending heavily on marketing campaigns.

The company improved its profitability by reducing marketing costs, even though that cost-cutting came as a result of a government directive limiting the amount of subsidies that phone companies were allowed to give to attract new subscribers.

The company spent 674.2 billion won on marketing from April through June, an 18 percent decrease year-on-year.

But the carrier saw a revenue decline of 3.6 percent, to 5.4 trillion won, because of a decline in its landline business.

Revenue from landline services decreased by 7.5 percent to 1.3 trillion won, as home phones lose ground to cell phone plans that also offer free voice calls.

Its wireless network service made up for those declines, though. Sales of cellular services totaled 1.8 trillion won, up 1.7 percent compared to 2014’s second quarter.

KT said that the launch of its new data-oriented billing plan attracted new LTE subscribers.

The telecom company has 11.9 million subscribers that use its LTE network, accounting for 68 percent of all wireless subscribers.

The billing plan offers free calls and texts at several different price levels that differ in the amount of mobile data a customer contracts for.

The second quarter also saw an improved average revenue per user figure of 34,879 won, a 1.4 percent increase from the previous quarter.


BY PARK EUN-JEE [park.eunjee@joongang.co.kr]

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