LG Uplus Overcomes Data Leak Setback to Deliver 'Solid Performance' (Comprehensive)

LG Uplus succeeded in defending its performance, supported by an increase in wireless subscribers and an improvement in churn rate, despite adverse events such as information leaks and DDoS disruptions.

LG Uplus announced on the 11th that it recorded consolidated sales of KRW 3.5413 trillion and operating profit of KRW 260.2 billion in the first quarter of this year. Compared to the same period last year, sales increased by 3.9% while operating profit decreased by 0.4%. Service revenue excluding device revenue was KRW 2.8243 trillion, up 1.8% compared to the same period last year.

The company explained that the decrease in operating profit was due to "one-time costs for compensating consumer damages caused by information leaks and DDoS disruptions, as well as strengthening information protection."

Marketing expenses decreased by 9.2% compared to the first quarter of last year, amounting to KRW 534.3 billion. During the same period, CAPEX (capital expenditure) focused on 5G wired and wireless network investments increased by 43.6% year-on-year to KRW 519.2 billion.

Mobile revenue recorded KRW 1.5611 trillion, up 2.7% year-on-year. Wireless service revenue excluding access revenue grew by 3.2% to KRW 1.4787 trillion compared to the same period last year. The increase in MNO (Mobile Network Operator) and MVNO (Mobile Virtual Network Operator) subscribers, along with the expansion of 5G penetration and a decrease in churn rate, are analyzed to have driven the qualitative improvement and growth of mobile revenue.

The total wireless subscribers surpassed 20.55 million, an 11.3% increase compared to the same period last year, breaking the 20 million cumulative subscriber mark. Net subscriber additions in the first quarter also rose by 35.5% year-on-year to 659,000.

5G subscribers reached 6.419 million, a 27.5% increase compared to the same period last year, and the proportion of 5G customers among total handset subscribers was 54.8%, up 10.8 percentage points from the first quarter of last year. The MNO churn rate decreased by 0.11 percentage points year-on-year to 1.07%.

MVNO subscribers increased by 41.2% to 4.343 million from 3.077 million in the first quarter of last year. Efforts to revitalize the MVNO industry, such as expanding dedicated consulting stores centered on the small business co-prosperity program ‘+Alpha’ and supporting 5G MVNO plans priced between KRW 40,000 and 60,000 per month for the first time in the industry, were effective.

The ‘Smart Home’ segment, consisting of IPTV and high-speed internet, generated revenue of KRW 594.3 billion, a 2.2% increase compared to the first quarter of last year. The high-speed internet business recorded revenue of KRW 260.6 billion, up 4.7% year-on-year. Subscribers also increased by 3.3% to 4.98 million from 4.822 million in the first quarter of last year.

IPTV business revenue rose slightly by 0.3% year-on-year to KRW 333.6 billion in the first quarter of this year due to external factors such as a decrease in major VOD titles and changes in viewing environments centered on Over-The-Top (OTT) services. During the same period, subscribers decreased by 0.8% to 5.368 million compared to the first quarter of last year.

The enterprise infrastructure segment, which includes corporate lines, solutions, and IDC (data centers), recorded revenue of KRW 368.4 billion, up 1.7% year-on-year. In particular, the IDC business led the performance increase in the enterprise infrastructure segment by achieving double-digit growth compared to the previous year.

The IDC business achieved revenue of KRW 76.6 billion, a 19.9% increase compared to the first quarter of last year, as stable revenue from existing customers continued. Corporate line business revenue also increased by 0.7% year-on-year to KRW 188.6 billion.

The solutions business recorded revenue of KRW 103.2 billion, down 7.2% compared to the first quarter of last year, due to a decrease in relay messaging traffic such as disaster alerts as the transition to the COVID-19 endemic phase began in earnest this year.

Yeom Young-hee, LG Uplus Chief Financial Officer (CFO), said, "In the first quarter, qualitative growth was fully underway through business and management activities focused on customer experience innovation, achieving cost efficiency while securing stable revenue growth. We will accelerate qualitative growth across all business areas this year and flexibly respond to market conditions to achieve management goals and enhance shareholder value."

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