KT, Expected to Enter Performance Recovery Phase This Year

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[Asia Economy Reporter Kum Bo-ryeong] KT is expected to enter a performance recovery phase this year.

According to NH Investment & Securities on the 8th, KT's performance in the fourth quarter of last year recorded sales of 6.2 trillion KRW and operating profit of 148.3 billion KRW. These figures represent increases of 3.4% and 54.8%, respectively, compared to the previous year.

An Jae-min, a researcher at NH Investment & Securities, explained, "Due to seasonal costs in the fourth quarter, operating profit decreased compared to the previous quarter, but the Average Revenue Per User (ARPU) turned around to 32,111 KRW for the first time in 14 quarters, reflecting the high ARPU impact of 5th generation (5G) mobile communication service subscribers." Although the growth rate of 5G subscribers was lower in the fourth quarter than in the third quarter of last year, it is being positively evaluated considering that no new 5G devices were released in the fourth quarter.

The dominance of 5G and the strengthening of related services are expected to have a positive impact. 5G coverage has expanded to 85 major cities nationwide. This year, KT is expected to provide stable service through coverage expansion by building in-building networks in public places and large buildings.

Lee Hak-moo, a researcher at Mirae Asset Daewoo, said, "One of the core applications of 5G is Over-The-Top (OTT) online video services, and KT has intensified competition by launching its own OTT service called 'Seezn' in the fourth quarter of last year." He added, "It has shown strong potential by attracting 100,000 subscribers within two weeks of launch, and efforts are being made to provide recommendation services through AI and differentiated content, so it is reasonable to expect growth in the future."

The securities industry is optimistic about this year's operating profit. Daishin Securities and SK Securities forecast KT's operating profit this year to increase by 5% from the previous year to 1.2 trillion KRW, while KTB Investment & Securities projects a 13.7% increase to 1.3092 trillion KRW.