LG Uplus Reports Balanced Growth in Wireless and Wired Businesses in Q2... B2B and New Ventures Also Strong (Update)

Balanced Improvement in Wired and Wireless New Business Performance... Operating Profit Reaches 268.4 Billion KRW
Operating Revenue (Sales) Increased by 2.2% to 3.3455 Trillion KRW... Net Profit Up 39.8%
Corporate Infrastructure Business Sales Including Smart Factory Performance Up 12.7%
Wireless Sales Up 5.7% Due to 5G and MVNO Subscriber Growth... Smart Home Sales Also Up 8.9%

[Asia Economy Reporter Eunmo Koo] LG Uplus continued its performance improvement as both its wired and wireless businesses grew steadily in the second quarter, and new business growth also gained momentum. Expectations for achieving a combined operating profit of 1 trillion KRW this year have also significantly increased.

LG Uplus announced on the 6th through a public disclosure that its consolidated operating profit for the second quarter of this year was 268.4 billion KRW, up 12.0% compared to the same period last year. During the same period, sales also increased by 2.2% to 3.3455 trillion KRW, and net profit rose 39.8% to 210.5 billion KRW.

The growth of the new business sector, which has gained momentum, is cited as the background for the performance improvement. The corporate infrastructure business, including new businesses, grew by double digits in the first half of the year, leading overall performance improvement. Growth in the wireless business sector due to an increase in 5G subscribers also contributed to the performance improvement.

New Business and B2B Results Become Visible… Corporate Infrastructure Sales Up 12.7%

Sales of the corporate infrastructure business, including new businesses targeting companies and line services, recorded 388.8 billion KRW, up 12.7% compared to the previous year. The increase is attributed to the boom in solutions and Internet Data Center (IDC) businesses driven by the rise in non-face-to-face demand.

The fastest-growing sector was the B2B solution business, including smart factories. Sales of the corporate solution business in the second quarter reached 134.2 billion KRW, up 34.3% year-on-year and 35.8% quarter-on-quarter.

Sales of the corporate line business, including corporate internet and dedicated lines, also increased by 3.3% year-on-year to 187.9 billion KRW. The IDC business also posted sales of 66.7 billion KRW, up 5.7% compared to the same period last year, influenced by increased orders due to accelerated online transition.

LG Uplus has actively pursued new businesses in the first half of the year, including winning orders for the Busan-Yeosu smart port project and the Ulsan-Yeosu petrochemical complex smart industrial complex construction project. Positive reviews for B2B solution products focused on specialized markets, such as the ‘Our Company Package’ for SMEs and the ‘Our Store Package’ targeting small business owners (SOHO) in the food service industry, are also cited as reasons for the performance improvement.

5G Subscribers Up 109%, On Track to Reach 4.5 Million Subscribers This Year… MVNO Subscribers Soar 79.4%

Second-quarter wireless business sales increased 5.7% year-on-year to 1.5056 trillion KRW, driven by the growth in 5G subscribers and MVNO subscribers. Wireless service revenue, excluding connection revenue, was 1.4151 trillion KRW, up 5% year-on-year.

The total wireless subscribers, combining MNO and MVNO, reached approximately 17.198 million, an 8.4% increase compared to the same period last year. Although MNO subscribers slightly decreased due to the termination of 2G services, 5G subscribers recorded approximately 3.727 million, up 108.8% year-on-year. The goal of securing 4.5 million 5G subscribers within the year is expected to be exceeded.

MVNO subscribers also maintained a sharp increase. In the second quarter, MVNO subscribers reached approximately 2.357 million, up 79.4% year-on-year. The ‘Alteul Phone Partners 2.0’ program, which supports self-activation and provides up to 150GB of additional data, strengthening cooperation with small and medium-sized budget phone operators, is interpreted as having a positive impact on subscriber growth.

The smart home business, including IPTV and high-speed internet, continued to grow thanks to an increase in subscribers. Second-quarter sales recorded 538.7 billion KRW, up 8.9% compared to the same period last year.

IPTV business sales reached 303.9 billion KRW, up 8.4% year-on-year. Leveraging content competitiveness such as the exclusive service for infants and toddlers, ‘U+ Idleulnara,’ IPTV subscribers increased by 9.4% year-on-year to approximately 5.173 million. The cumulative users of U+ Idleulnara approached 46 million as of the end of June, establishing it as a leading kids’ service in Korea.

High-speed internet revenue was 234.8 billion KRW, up 9.6% year-on-year. Subscribers numbered approximately 4.637 million, a 5.1% increase year-on-year, and the proportion of giga internet subscribers rose to 68%, up 7.5 percentage points compared to the same period last year, driving performance growth.

Marketing expenses were efficiently managed, maintaining a stabilization trend. Cumulative marketing expenses for the first half of the year were 1.1148 trillion KRW, down 0.6% year-on-year. Capital expenditure in the second quarter was 483.3 billion KRW, up 27.2% quarter-on-quarter.

Focus on ‘Qualitative Growth’ in the Second Half… “Concentrating on Non-Telecom Business Growth”

LG Uplus plans to continue efforts for qualitative growth in the second half of the year. The strategy is to increase ‘true fans’ through differentiated services and competitiveness rather than excessive marketing competition by lowering churn rates through enhanced membership benefits and new bundled products.

Earlier, LG Uplus launched the ‘Subscription Kok’ service in the second quarter, adding subscription services such as Naver Shopping, Millie’s Library, GS25, and Coupang Eats to membership benefits. In the first quarter, it introduced ‘U+ Together,’ the first-ever acquaintance bundled product in Korea. These efforts have resulted in improved churn rates. LG Uplus’s MNO churn rate in the second quarter was 1.28%, an improvement of 0.15 percentage points compared to the same period last year.

LG Uplus plans to focus on growing non-telecom businesses such as media, new businesses, and IDC in the second half to achieve its goal of expanding non-telecom business revenue to 30% of total sales by 2025.

In the first half of the year, LG Uplus made equity investments in infant and toddler content producers such as Monster Studio and Dream Factory Studio to enhance its media business competitiveness. In the second half, it plans to secure IP through partnerships and equity investments with various content producers and strengthen investment in original content.

To secure competitiveness in new businesses, LG Uplus will expand partnerships with group companies and leading industry players. Collaborating with group companies such as LG Electronics, LG Chem, and LG CNS, it will actively target new businesses including smart factories, smart mobility, and AI call centers, and pursue competitiveness enhancement through partnerships with various leading industry players.

Additionally, by building the Pyeongchon IDC2 Center capable of operating over 100,000 servers, LG Uplus plans to meet the increasing IDC demand and accelerate non-telecom sales growth through the launch of B2B solutions targeting various specialized markets.

Lee Hyuk-joo, Vice President and Chief Financial Officer (CFO) of LG Uplus, said, “In the second half of this year, we will continue customer-centric management to eliminate customer complaints and strengthen the competitiveness of existing businesses to create greater growth opportunities. We will do our best to achieve management goals and enhance shareholder value by flexibly responding to market conditions based on profit growth.”

This content was produced with the assistance of AI translation services.