SK Telecom Q3 Operating Profit Up 18.5%... Top 3 Mobile Carriers' Quarterly Operating Profit Hits 1 Trillion Won (Comprehensive)

IT Industry Sees Profit Growth Only in Three Mobile Carriers Amid Game and Portal Slumps
5G Subscriber Expansion and New Businesses Like Media and Enterprise Also Grow

[Asia Economy Reporter Lim Hye-seon] As third-quarter earnings announcements continue, it has been revealed that only the three major telecommunications companies in the information and communication (IT) market saw profit increases. Amid an overall earnings slump in the IT industry caused by rising labor costs halting growth in the portal sector and a chill in the gaming industry due to the global economic downturn, growth was achieved through the simultaneous expansion of telecommunications businesses based on 5G, as well as new businesses in media and enterprise sectors.

SKT’s Operating Profit Increases 18.5% Year-on-Year to 465.6 Billion KRW

On the 10th, SK Telecom announced third-quarter sales of 4.3434 trillion KRW and operating profit of 465.6 billion KRW, representing increases of 3.0% and 18.5% respectively compared to the same period last year. Growth continued in new growth business areas such as media and enterprise, centered on wired and wireless communications. The combined operating profit of the three major telecom operators?SK Telecom, KT, and LG Uplus?in the third quarter of this year was 1.2036 trillion KRW. Since surpassing 1 trillion KRW in combined operating profit in the first quarter of last year, the three carriers have recorded operating profits in the trillion KRW range every quarter.

KT recorded a consolidated operating profit of 452.9 billion KRW in the third quarter, an 18.4% increase year-on-year. Sales rose 4.2% to 6.4772 trillion KRW. LG Uplus posted an operating profit of 285.1 billion KRW, up 3.0% from the same period last year. Its third-quarter operating revenue was 3.5011 trillion KRW, and service revenue was 2.84 trillion KRW, increasing 0.7% and 2.0% respectively compared to the same period last year.

The strong performance of the three telecom companies was due to stable growth in wireless business and new business sectors, including an increase in 5G subscribers. According to the Ministry of Science and ICT, as of the end of September, the number of 5G subscribers reached 26,229,565. As 5G subscribers increased, the average revenue per user (ARPU) rose, maintaining growth in wireless business performance. The telecom industry expects the 5G penetration rate, which exceeded 50% this year, to surpass 60% next year, indicating there is still room for growth.

All Three Telecom Companies Have Over Half of Subscribers on 5G and New Businesses Are Also Progressing Smoothly

As of the end of the third quarter, SKT had 12.47 million 5G subscribers, accounting for 53% of all handset subscribers. SKT proactively launched new rate plans in the third quarter to enhance customer choice and improve service competitiveness. KT’s 5G subscribers accounted for about 57% of all handset subscribers, totaling 7.96 million. LG Uplus’s 5G subscribers increased by 39.5% to 5.732 million, representing 50.2% of total subscribers. Notably, the wireless subscriber churn rate improved by 0.39 percentage points compared to the same period last year, reaching a record low of 1.00%.

New business performance is also stable. SKT’s media business revenue increased 20.6% year-on-year, and its enterprise business, centered on data centers and cloud services, grew 8.9%. Cumulative enterprise business sales exceeded 1 trillion KRW through the third quarter. Cloud sales rose 90.2% year-on-year due to increased demand from gaming, finance, and media industries, while data center sales increased 31.3% year-on-year due to rising traffic. The subscription and metaverse businesses have also entered a full growth trajectory, centered on 'T Universe' and 'Ifland.' The total merchandise sales (GMV) of the subscription business reached 150 billion KRW, continuing growth for three consecutive quarters. 'Ifland' saw its cumulative user base exceed 12.8 million as of the third quarter.

For KT, the demand for digital transformation (DX) by companies has increased since COVID-19, leading to a 21% year-on-year growth in cumulative B2B orders for the third quarter, reaching 2.97 trillion KRW. The AI Contact Center (AICC) business surged 91.7%, driven by large-scale deployments mainly in the financial sector. LG Uplus’s smart home business, including high-speed internet and IPTV, grew 3.9%, while enterprise infrastructure business revenues, including new business targeting enterprises, data centers (IDC), and line services, increased 1.5% year-on-year.

Marketing cost stability also contributed to profits. Supported by improved earnings, the three telecom companies are expected to easily surpass a combined operating profit of 4 trillion KRW this year, achieving record-high results. The combined operating profit for the first to third quarters was 3.6908 trillion KRW.

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