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SK Telecom, KT Freetel and LG Telecom Q2 2008 Results
The Korean market finished Q2 08 just short of 45m subscribers, with an end-quarter total of 44.98m. It remains a highly stratified market, although LG Telecom (LGT) has been gradually encroaching on the market share of rival KT Freetel (KTF), adding 0.3pp since the end of Q2 07 to finish June 2008 with 17.9%. KTF lost 0.4pp in the year to finish the quarter with 31.5%, while SK Telecom (SKT) ended on 50.6%, up 0.1pp year on year.
Of course, there is little prospect of any shift in the market rankings, with a gap of 8.6m between SKT and KTF and 6.1m between KTF and LGT at the end of Q2 08. SKT had a base of 22.7m at the end of the quarter, compared to KTFÃ's 14.2m and LGTÃ's 8.1m. LGT has been the fastest growing operator for some time now, although in Q2 08 its rolling annual growth rate dropped into single figures for the first time in five quarters, with an annual uplift of 8.4%. SKT grew by 6.5%, down 0.4pp year on year, while KTF saw the largest decline, a 2.1pp fall taking its annual growth to 4.8% in Q2 08.
Despite having the lowest growth rate in the market, KTF did take second place for quarterly net additions in Q2 08 with 225k. LGT added 118k while SKT gained 373k. On an annual basis, KTF just managed to outdo LGT, adding 0.65m compared to LGTÃ's 0.62m. Meanwhile, SKT gained more than its two competitors combined with a yearly increase of 1.39m.
SKTÃ's dominance of the market is even greater in financial terms. It took 55.1% of the combined service revenues of the three operators with a quarterly total of KRW 2,931bn, up 3.1% year on year. KTF took 28.5% with KRW 1,517bn while LGTÃ's KRW 870bn represented 16.4% of the total. KTFÃ's 10.2% yearly increase in revenues was the best in the market, beating LGTÃ's growth rate by 3.6pp, and its share of the revenues was also up by 1.2pp. However, this does little to mitigate a significant decline in profitability, with EBITDA down 30.3% to KRW 264bn and the margin falling 10.1pp to 17.4%.
SKT also saw a decline with its Q2 08 EBITDA figure of KRW 969bn being 12.1% lower than the year-earlier figure, and its margin was down 5.7pp, although it remained the highest in the market at 33.1%. LGTÃ's EBITDA was up 12.4% to KRW 191bn with a margin of 22.0%.
Posted to the site on 6th August 2008
This article was extracted from The Mobile World Briefing, the weekly newsletter from The Mobile World.
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