South Korean mobile carrier SK Telecom saw its net profit more than halve in the third quarter of this year, due to increased spending to enhance and promote its long-term evolution (LTE) or 4G network.
The company said in a press statement Tuesday that net profit dropped to 175.6 billion won (US$160.8 million) in the July to September period.
This was a drop of more than half, or 54 percent, from a net profit of 383.9 billion won (US$352 million) the year before, according to a separate Bloomberg report.
SK Telecom also noted that revenue inched up 2 percent year-on-year to 4.1 trillion won (US$3.7 billion) in the third quarter, while operating profit fell 46.4 percent year-on-year to 300.7 billion won (US$275 million).
The slump in profit was the result of "expanded investment inand a temporary increase in LTE marketing expenses", it said.
Still, the telco noted that its LTE subscriber base had growth, which helped lift overall revenue. It had over 6 million users by end October, and expects it to "smoothly" reach its target of 7 million by the end of this year.
In addition, SK Telecom said it expects to see 80 percent or higher growth in its B2B (business-to-business) units, compared to the same period last year with monthly revenues from its enterprise solutions are growing due to collaboration with its SK Broadband and SK Telink groups.
"SK Telecom will build a solid ICT business structure by fully leveraging its solid LTE subscriber growth momentum, B2B business growth and [subsidiary] SK Planet's strong business performance that has been clearly witnessed in the third quarter," its CFO Ahn Seung-yun said in the statement.
In contrast, rival at 372.3 billion won (US$341 million). KT had received a boost from non-telecoms affiliates to offset higher network-upgrade spending and marketing costs.