South Korea’s all three wireless carriers posted strong earnings in the second quarter but their outlook remains clouded as the government is forcing them to cut wireless bills for consumers by up to 25 percent from September.

SK Telecom Inc. said its second-quarter revenue came to 4.34 trillion won on a consolidated basis, up 1.8 percent from a year ago with an operating profit of 423.3 billion won, up 3.9 percent. Net profit more than doubled to 620.5 billion won in the same period. The robust results were driven by solid earnings growth of subsidiaries. SK Broadband’s sales gained 1.9 percent to 730.1 billion won on an increase in UHD service subscribers and paid content viewers. Operating profit reached 31.6 billion won, the company`s highest quarterly operating profit on record. SK Planet’s revenue was up 5.4 percent to 274 billion won on the growth of its e-commerce business.

KT Corp. reported 5.84 trillion won in second-quarter sales, up 2.9 percent from a year ago, with operating profit up 4.8 percent to 447.3 billion won, and net profit up 1.1 percent to 258.1 billion won. Operating profit beat market expectations due to a one-time gain of about 40 billion won from the sale of a MasterCard stake held by subsidiary BC Card last month. Sales from KT’s media content business grew 19.2 percent to 561.4 billion won. Smart Energy generated 46.7 billion won in sales in the first six months of this year. In contrast, wired and wireless business became slow, with sales from wireless business fell 5.2 percent on-year to 1.78 trillion won.

LG Uplus’ second-quarter sales grew 4.5 percent on-year to 3.01 trillion won. Operating and net profits were 208 billion won and 136.2 billion won, respectively. That was up by 15.5 percent and 4.2 percent, respectively.

Revenue that excludes handset sales was 2.33 trillion won, up 4.2 percent. Wireless service sales rose 3.2 percent to 1.40 trillion won due to an increase in LTE subscribers and monthly data consumption.

Second-quarter LTE subscribers amounted to 11,556,000 persons, or 90 percent of total subscribers to wireless telecom services.

The telecom companies are now weighing various options to respond to the government’s policy to lower phone bills. The options include a court injunction to challenge the policy and the separation of handset costs from phone bills, according to industry sources.

By Cho Hee-young

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