LG Uplus profit down 31.7% on year on large 5G expenses

LG Uplus Corp., South Korea’s No. 3 mobile carrier, reported over 30 percent fall in its operating profit for the July-September quarter against a year ago due to heavy marketing spending to launch 5G network, although improving from three months earlier amid fast migration to 5G.

In a regulatory filing on Friday, LG Uplus said its consolidated operating profit gained 5.0 percent on quarter but plunged 31.7 percent to 155.9 billion won ($133.2 million) in the third quarter ended September. Revenue came at 3.2 trillion won, up 1.4 percent on quarter from 8.4 percent on year.

LG Uplus shares closed 1.86 percent lower at 13,200 won on Friday.

The company continued aggressive investment on the 5G network in the third quarter. Capital expense for the period totaled 784.4 billion won, growing slightly from 730.0 billion spent three months earlier but sharply up from 291.1 billion won invested a year earlier. The capital investment was made mostly in wireless network, especially 5G base stations. Its marketing expenses also grew sharply compared to a year-ago period, reaching 586.1 billion won in the third quarter.

The mainstay wireless business delivered 1.4 trillion won in revenue in the third quarter, up 1.7 percent on quarter and 3.5 percent against a year ago. The accumulated number of wireless subscribers totaled 14.7 million, up 1.8 percent on quarter and 7.1 percent on year, with the addition of 267,000 new subscribers.

Average revenue per user also gained 0.2 percent to 31,217 won from three months earlier. Against a year-ago period, it was down 3.2 percent.

Revenue from the Internet protocol TV, broadband, and internet-based phone service grew 0.7 percent on quarter and 5.4 percent on year to 509.0 billion won in the third quarter. The enterprise business recorded 485.9 billion won in revenue, down 1.1 percent on quarter but up 1.0 percent on year.

The company said its business will be focused on 5G network in the following quarter. It plans to incorporate 5G network service to various areas such as shopping and physical training to offer better and differentiated services.

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