KT Corp Q3 profit rises 46 percent

South Korean telco gets boost from non-telecoms affiliates, offsetting higher network-upgrade spending and marketing costs.

KT Corporation (KT), South Korea's largest fixed-line operator and second-largest mobile carrier by subscribers, has booked better than expected results for its third quarter.

For the three months ended September, the telco posted a 46 percent rise in its net profit to 372.3 billion won (US$341 million). The result was better than the market estimates of 207.5 billion won (US$189.96 million), according to Dow Jones newswire. Revenues were 6.52 trillion won (US$5.97 billion), up 30.6 percent.

The company saw stronger performances at its non-telecoms affiliates. This helped offset the higher network-upgrade spending and marketing costs for its ultra-fast network technology nationwide.

In its earnings announcement Monday, the telco saw finance and rental related income jump by over four times to 939.1 billion won (US$859.4 million) from a year ago. Merchandise revenue, which includes sales of handsets, grew 25 percent to 1.31 trillion won (US$1.2 billion)

Stronger performances from non-telecoms associates (source: KT Corp presentation slides)

South Korean telcos have been facing increasing margin pressures as they upgrade their networks and spend more to attract customers, noted Dow Jones.

Last month, KT announced a partnership with Japan's NTT Docomo to develop cross-border mobile payment offerings based on near-field communications , with the first service scheduled for the first half of 2013.


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