'Device Margin Impact' LG Uplus Q1 Operating Profit 261.2 Billion KRW...5% Decrease

LG Uplus Yongsan Headquarters

[Asia Economy Reporter Lim Hye-sun] LG Uplus announced on the 13th that its operating profit based on consolidated financial statements for the first quarter of this year recorded 261.2 billion KRW, down 5.2% compared to the same period last year due to a decrease in device margin. Operating revenue also decreased by 0.2% to 3.41 trillion KRW due to a decline in device revenue caused by delays in the launch of new flagship devices. Capital expenditure (CAPEX) for the first quarter was 361.6 billion KRW, invested in strengthening the 5G network and new businesses.

5G Subscribers Increase by 50%

The wireless business generated revenue of 1.5182 trillion KRW, up 1.3% compared to the same period last year. In the wireless business segment, subscriber growth and churn rate improvement were achieved simultaneously, driving service revenue growth. The smart home business, including IPTV and high-speed internet, as well as the corporate infrastructure business including new businesses, continued stable growth, contributing to improved performance. The total number of wireless subscribers reached 18.473 million, an 8.8% increase compared to the first quarter of last year. Net wireless subscriber additions in the first quarter were 486,000, up 47.7% year-on-year. The number of 5th generation (5G) subscribers increased by 50.9% year-on-year to 5.034 million. Among all handset subscribers, 5G customers accounted for 44.0%.

Notably, the churn rate improved by 0.2 percentage points compared to the same period last year, reaching a record low of 1.18%. LG Uplus’s annual average churn rate has been steadily decreasing, with 1.46% in 2019, 1.44% in 2020, and 1.36% in 2021.

MVNO (Mobile Virtual Network Operator) subscribers also continued to grow, reaching 3.077 million, a 42.8% increase compared to the first quarter of last year. Efforts to revitalize the industry, such as SME win-win policies centered on ‘U+ Partners,’ dedicated devices, offline sales promotion, and MVNO consulting specialty stores, drove subscriber growth.

Smart Home Business Up 9.7% · Corporate Infrastructure Business Up 6.7%

The smart home segment continued its growth, generating revenue of 581.6 billion KRW, up 9.7% compared to the first quarter of last year. Steady subscriber growth for IPTV and high-speed internet and an increase in high-value customers positively impacted performance improvement.

IPTV business revenue increased by 10.6% year-on-year to 332.7 billion KRW. The exclusive service for infants ‘U+ Idle Nara’ and differentiated content competitiveness with Netflix, Disney Plus, and customer-centric UI/UX improvements enhanced service satisfaction. IPTV subscribers reached 5.41 million, a 6.6% increase compared to the first quarter of last year.

High-speed internet revenue grew by 8.6% year-on-year to 248.9 billion KRW. Subscribers numbered 4.822 million, a 5.0% increase over the same period.

Corporate infrastructure business revenue, including new corporate businesses, IDC, and line services, also showed solid growth, increasing by 6.7% year-on-year to 362.4 billion KRW. Stable growth in corporate line business and high growth in B2B new businesses were cited as key factors.

Solution business and IDC business revenue recorded double-digit growth, increasing by 14.7% and 13.7% year-on-year to 111.3 billion KRW and 63.8 billion KRW, respectively. In particular, B2B new businesses such as smart mobility and smart factory continued high growth, contributing to the expansion of solution business performance.

Qualitative Growth through Customer Experience Innovation This Year

LG Uplus plans to continue qualitative growth through ‘customer experience innovation’ this year. It will also focus on continuously enhancing competitiveness in existing new businesses such as smart mobility and smart factory, and concentrate capabilities to successfully establish new businesses such as quantum-resistant encryption dedicated lines, content, and platforms.

In the telecommunications business, continuous investment in wired and wireless networks will improve data quality and optimize user benefits, while strengthening differentiated service competitiveness through bundled products, memberships, and content partnerships.

In new business areas with core competitiveness such as smart factory, smart mobility, and AI call centers, LG Uplus plans to continuously build references through new business orders and strengthen future technological capabilities. In the mobility sector this year, based on experience building the ‘Autonomous Driving Big Data Control Center’ in Sejong City, the company will focus on developing next-generation technologies such as ‘demand-responsive’ mobility services and autonomous vehicle anomaly diagnosis technology.

LG Uplus will also focus on concretizing new businesses and ensuring stable business establishment. In the first quarter of this year, the company recruited a Chief Data Officer (CDO) and Chief Content Officer (CCO) with specialized capabilities to focus on data and content fields. Centered on these professionals, the company will advance platform and subscription businesses, promote convergence of new technologies and content, and accelerate the establishment of new growth engines.

Furthermore, LG Uplus plans to secure industry leadership by focusing on creating an industrial ecosystem and supporting technological environments for the world’s first quantum-resistant encryption dedicated line service developed this year.

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