KT grows mobile ARPU after 420,000 5G subscriber additions

KT CFO Kyung-Keun Yoon has revealed that its mobile ARPU has improved as the telecom operator added 420,000 5G subscribers in three months since its launch in April.
KT 5G at Asian Games in Indonesia
KT’s wireless service revenue rose 1.1 percent and mobile ARPU grew 0.8 percent quarter on quarter during the second quarter of 2019, rebounding since Q2 of 2018.

The South Korean telecom operator during the earnings call last week said 82 percent of 5G subscribers are opting for unlimited 5G data plan called the Super Plan.

KT’s telecom network engineers activated 45,339 5G BSTs till July as part of the strategy to expand 5G service coverage across the nation. Samsung is the 5G network supplier for the roll out of 5G network.

KT has revealed its 5G coverage map sharing the number of activated 5G base stations, information on in-building coverage on daily-basis. KT also launched B2B 5G plan offering 5G network service specialized to meet the needs of businesses.

KT is targeting to add 10 percent of its total handset subscribers to 5G in 2019 and 30 percent in 2020.

KT’s Capex

KT earlier said it will be spending KRW 3.3 trillion towards Capex this year. KT has already spent around 40 percent of Capex in the first half of 2019. Total Capex spend up to Q2 was KRW 1,354.1 billion.

KT may increase Capex depending on the 5G coverage targets and competition from SK Telecom.

KT was first in the world to launch a blockchain development platform — KT GiGA Chain — applying blockchain to a commercial network. There will be application of blockchain in the 5G hyper-connected era.

KT’s revenue

KT’s revenue rose 5 percent year-over-year to KRW 6,098.5 billion in the second quarter of 2019. KT’s service revenue grew 1.7 percent to KRW 5,088.2 billion primarily drive by wireless service revenue improvements and growth in Internet and media businesses.

KT’s operating profit fell 27.8 percent to KRW 288.2 billion due to higher labour costs and increase in initial marketing spend for 5G. Net profit dropped 27.6 percent to KRW 203 billion. EBITDA dipped 2.4 percent to KRW 1,191.3 billion.

KT’s operating expense grew 7.4 percent to KRW 5,810.3 billion. KT’s marketing expense rose 20.2 percent primarily due to 5G initial subscriber acquisition and stronger subscriber retention for fixed and wireless services.

KT added 160,000 GiGA Internet subscribers accounting for 59 percent of total Internet subscriber base, growing to 5,220,000 subscribers.

KT’s IPTV business added 147,000 with total base reaching 8,110,000 subscribers.

KT added 220,000 wireless subscribers in Q2, reporting a total of 21,540,000 subscribers.

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