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KT Corp, South Korea's dominant fixed-line operator and No. 2 mobile carrier, reported on Tuesday a 12 percent fall in quarterly operating profit due to intensified competition in broadband and Internet telephony.
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AP |
With revenue growth stalling in the saturated home market, South Korean telecom operators are pressured by the heavy cost of attracting and retaining users amid public pressure to lower mobile tariffs.
KT, which absorbed its mobile unit KTF in June, is still well on track to meet its annual guidance of 1.8 trillion won ($1.52 billion) in operating profit and 19 trillion won in revenue.
The company is hoping to generate growth by offering new services combining various mobile and fixed-line products, such as a mobile phone that supports Internet calls and free wireless data access on Wi-Fi networks.
KT posted a 413.1 billion won ($348.5 million) operating profit in the third quarter to September, slightly below a consensus forecast of 437.6 billion won profit from Thomson Reuters I/B/E/S.
That compared with a year-ago operating profit of 467.8 billion won calculated on a merged basis, according to KT.
Net profit came at 351.4 billion won, higher than a forecast of 277.8 billion won and up 80 percent from a year earlier when KT was hit by foreign exchange related losses.
Quarterly sales rose 4 percent to 4.82 trillion won, above forecasts, helped by rising user bases for Internet telephony and broadband TV.
KT and rivals SK Telecom and LG Telecom agreed in September to slash mobile tariffs under a government initiative, with most of the measures taking effect in the current quarter.
KT shares were flat at 0039 GMT in the wider market down 0.2 percent. The stock has risen 3 percent so far this year through Monday, lagging the KOSPI's 39 percent gain.
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