LG Uplus Reports Q3 Operating Profit of 285.1 Billion KRW, Up 3% Year-on-Year

Net Increase in Wireless Subscribers, Smart Home Business Including IPTV Also Progressing
Accelerating Platform Business Strengthening for Mid-to-Long-Term Vision 'Uplus 3.0'

[Asia Economy Reporter Lim Hye-seon] LG Uplus announced on the 4th that its third-quarter operating profit on a consolidated financial statement basis recorded 285.1 billion KRW, a 3.0% increase compared to the same period last year. Operating revenue (sales) and service revenue (revenue excluding device revenue from operating revenue) also increased compared to last year. This year's third-quarter operating revenue was 3.5011 trillion KRW, and service revenue was 2.84 trillion KRW, increasing by 0.7% and 2.0%, respectively, compared to the same period last year.

The wireless business led performance improvement through qualitative growth, including double-digit subscriber growth rate and setting a record low churn rate for three consecutive quarters. The smart home business, including Internet TV (IPTV) and ultra-high-speed internet, as well as the corporate infrastructure business including new businesses, also showed stable growth.

Wireless Subscribers Up 11.3% · Record Low Churn Rate for Three Consecutive Quarters

The wireless business in the third quarter earned 1.5458 trillion KRW in profit, a 1.5% increase compared to the same period last year. Wireless service revenue excluding access revenue was 1.4622 trillion KRW, a 1.9% increase compared to the third quarter of last year. Wireless service revenue is the sum of revenue from wireless service-related basic fees, call charges, data, etc.

Wireless subscribers increased by 11.3% compared to the third quarter of last year, reaching 19.473 million. The net increase in wireless subscribers in the third quarter of this year was 505,000, a 68.9% increase compared to the same period last year, and 5G subscribers increased by 39.5% to 5.732 million. The proportion of 5G customers among total subscribers based on handsets is 50.2%. In particular, the wireless subscriber churn rate improved by 0.39 percentage points compared to the same period last year, achieving a record low of 1.00%. The company analyzed that customer experience innovation activities, which comprehensively identify and improve customer pain points (areas where customers feel inconvenience) such as plans, memberships, and customer service, yielded results. LG Uplus's quarterly churn rates this year were 1.18% in Q1, 1.11% in Q2, and 1.00% in Q3, setting record lows for three consecutive quarters.

MVNO (Mobile Virtual Network Operator) subscribers also continued to increase, recording 3.602 million, a 41.4% increase compared to the third quarter of last year. Activities such as the joint partnership program with small and medium-sized operators centered on the brand '+Alpha' of the 'U+ MVNO Partners' announced this year, and policies to revitalize the MVNO market drove subscriber growth.

Marketing expenses were recorded at 564.8 billion KRW, similar to the same period last year. The marketing expense ratio to service revenue improved by 0.5 percentage points to 21.5% compared to the same period last year, maintaining a stabilization trend. During the same period, capital expenditure (CAPEX) was 619.1 billion KRW, a 3.1% increase compared to the same period last year.

Continued Growth in Smart Home and Corporate Infrastructure Businesses

The smart home business, including ultra-high-speed internet and IPTV, continued growth by earning 590.5 billion KRW in profit, a 3.9% increase compared to the third quarter of last year. Steady subscriber growth and an increase in high-value subscribers were cited as major factors for performance improvement.

Ultra-high-speed internet revenue was 256.5 billion KRW, a 7.1% increase compared to the same period last year. Subscribers also increased by 4.6% to 4.91 million compared to last year. The IPTV business also recorded revenue of 334 billion KRW, a 1.5% increase compared to the same period last year. IPTV subscribers reached 5.407 million, a 2.7% increase compared to last year. The company explained that this was the result of enhancing its own content competitiveness with U+ Idle Nara, U+ Home Trainow, U+ Golf, and focusing on improving user experience.

Revenue from the corporate infrastructure business, including new businesses targeting corporations, data centers (IDC), and line businesses, recorded 374.5 billion KRW, a 1.5% increase compared to last year. It is interpreted that the stable high growth of B2B new businesses such as smart factories and smart mobility, along with the corporate line business, had a positive impact.

Revenue from the corporate line business and IDC business increased by 4.8% and 2.8% compared to the same period last year, recording 194.5 billion KRW and 70 billion KRW, respectively. Solution business revenue was recorded at 110 billion KRW, a 4.8% decrease compared to the third quarter of last year. However, cumulative revenue from the solution business from Q1 to Q3 this year increased by about 3.3% compared to the same period last year.

Focus on Platform Business Transformation... Realizing the ‘Uplus 3.0’ Vision

LG Uplus is accelerating its transition to a platform business to achieve the mid- to long-term growth vision of ‘Uplus 3.0’. Through this, it aims to expand the proportion of non-telecom sales to 40% by 2027, five years from now, and grow corporate value to 12 trillion KRW.

By integrating future technologies such as data and artificial intelligence (AI) with the ‘customer-centric thinking’ internalized through the telecommunications business, the company plans to provide differentiated value to customers centered on four major platforms: ▲Lifestyle ▲Play ▲Growth Care ▲Web 3.0.

LG Uplus established a Chief Content Officer (CCO) organization this year and aggressively recruited talent from the content industry and star PDs. Along with this, it launched the content-specialized brand ‘STUDIO X+U’ and started producing content independently. STUDIO X+U plans to showcase various original content such as kids, variety shows, dramas, and documentaries in the future.

To strengthen platform and content competitiveness, the company actively utilizes the technological capabilities possessed by the telecom operator. The core of platform advancement is artificial intelligence (AI) and data analysis. Led by the Chief Data Officer (CDO) hired this year, the company plans to create a virtuous cycle structure by analyzing customer response data on content viewing and platform usage to reflect it in new content production and platform improvement. In the AI field, it will continue research and development to enhance technological capabilities while actively entering the business.

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