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SK Telecom, South Korea's top mobile carrier, reported on Friday its net profit quadrupled in the fourth quarter as marketing costs dropped, but fixed-line operator KT Corp posted a surprise net loss.
Mobile operators in the saturated Korean market are switching focus to retain users through long-term contracts after a cutthroat marketing battle to attract subscribers.
However, competition is now growing over products bundling landline, broadband, Internet TV and mobile services as companies aim to lock in their customer base by offering discounts for the package.
KT, South Korea's biggest fixed-line and broadband firm, plans to absorb its mobile service unit KTF to refine its bundled offerings, a move some analysts say could heighten competition in the overall telecom sector.
SK and its broadband affiliate SK Broadband compete with KT and KTF, as well as LG Group's telecom units.
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SK, which controls about half of the country's mobile market, posted a 263.1 billion won ($191.5 million) net profit for October-December, lower than a consensus forecast for a 288.4 billion won profit from Reuters Estimates.
Its earnings were helped by lower marketing costs, which fell 19 percent from a year ago, and gains from interconnection fee settlement.
But KT, which has 90 percent of South Korea's fixed-line market and 44 percent of broadband customers, swung to a 26.6 billion won ($19.4 million) net loss in October-December, its first quarterly loss in five years.
Heavy currency-related losses due to a weak won hurt its results, while Internet telephony ate away at its customer base in traditional fixed-line phones.
KT's result widely missed a consensus forecast for a 78 billion won profit from Reuters Estimates and compared with a 107.6 billion won profit a year earlier.
Shares in SK Telecom rose 1.7 percent in the fourth quarter, bucking the broader market's 22.4 percent drop, while KT shares fell 10.5 percent.
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