KTF Quarter Profit Halves on Marketing Costs
KTF Co, South Korea's No. 2 mobile carrier, reported on Wednesday its quarterly profit halved as marketing costs to win high-speed mobile subscribers wiped out revenue and user growth.
KTF has seen higher marketing costs hurt its earnings in recent quarters due to its battle with bigger rival SK Telecom over more profitable "third-generation" mobile services, such as video calls and content downloads.
The competition could intensify as SK Telecom is set to take control of broadband No. 2 hanarotelecom and offer packaged services ranging from telephone, mobile, broadband to Internet Protocol TV (IPTV) at lower costs.
KTF, which has 31.5 percent of the local mobile market, posted a 53.05 billion won ($55.63 million) net profit in the quarter to Dec. 31, below a forecast of 69 billion won net profit from Reuters Estimates.
The result compares with a 107.7 billion won profit a year a earlier and 62.9 billion won earned in the third quarter of 2007.
Revenue rose 18 percent from a year earlier to 1.94 trillion won.
The company said marketing costs rose 36 percent to 430.3 billion won in the fourth quarter. Its subscriber base was 13.72 million at the end of December, up 6 percent from a year earlier.
KTF shares fell 8.6 percent in the fourth quarter, compared with the KOSPI's 2.5 percent fall. KT owned 52.2 percent in KTF as of end-September. Japan's NTT DoCoMo also had a 10.3 percent stake.