[Asia Economy Reporter Seulgina Jo] KT's revenue declined last year. The annual operating profit growth rate was also low at the 2% level compared to competitors. However, with significant growth in digital platform sales such as media, KT's standalone service revenue surpassed the 15 trillion won mark for the first time in nine years. The AI and digital transformation (DX) business sales, accelerated by CEO Koo Hyun-mo, showed the most explosive growth among all business areas.
KT announced on the 9th that its consolidated revenue for 2020 was 23.9167 trillion won, with an operating profit of 1.1841 trillion won. Revenue decreased by 1.7% compared to the previous year, but operating profit increased by 2.1%.
KT's standalone revenue also decreased by 1.8% year-on-year to 17.8792 trillion won. Device revenue (2.7965 trillion won) dropped 14.6% compared to the previous year. Service revenue (15.0828 trillion won) slightly increased, surpassing the 15 trillion won level. Operating profit rose 17.4% to 878.2 billion won, and net profit increased 55.3% to 665.5 billion won.
The growth in operating profit was driven by digital platforms such as AI, DX, and media. AI and DX business sales increased by 11.8% year-on-year. IDC and cloud businesses also recorded double-digit growth as companies accelerated their digital transformation. The Yongsan IDC, the largest capacity in Korea, which opened in November last year, has already achieved a 70% reservation rate, and the cloud business is expanding its customer base mainly among public and financial institutions. Blockchain sales increased nearly sevenfold compared to 2019, driven by local governments issuing more local currencies to strengthen regional economies after COVID-19.
IPTV also played a leading role in KT's revenue growth through platform-based sales increases. IPTV revenue rose 7.7% year-on-year to 1.7232 trillion won. KT evaluated that "by strengthening service competitiveness through expanded partnerships, it continued net subscriber growth and solidified its position as the number one paid broadcasting market leader."
Wireless revenue (6.9338 trillion won) grew 1.3% year-on-year despite a decrease in roaming revenue due to COVID-19, as 5G subscribers began to increase significantly. As of the end of 2020, the cumulative number of 5G subscribers was 3.62 million, recording the highest net increase rate among the three major telecom companies. Additionally, 25% of postpaid mobile subscribers used 5G, showing the highest 5G subscription ratio among the three companies. Wireless ARPU was also the highest among the three.
Wired telephone revenue, which has been declining in recent years, decreased 7.3% year-on-year, while high-speed internet revenue maintained the previous year's level, surpassing 9 million subscribers for the first time in Korea after 22 years of service commercialization.
Meanwhile, BC Card's revenue decreased 4.2% year-on-year due to a decline in foreign tourists and reduced consumption caused by COVID-19. KT Estate suffered a direct hit from decreased sales and fewer travelers, with revenue dropping 24.9%. Content group sales grew 9.6% year-on-year due to increased T-commerce and online advertising handling volume and expanded music service subscribers.
Last year, KT declared its transformation from a ‘Telco’ to a ‘Digico (Digital Platform Company)’ and plans to secure new growth engines based on differentiated ABC (AI, Big Data, Cloud) competitiveness. Group-wide restructuring to secure digital competitiveness is also underway.
On this day, KT decided to increase the dividend per share by 250 won from the previous year to 1,350 won. It will be finalized and paid after the regular shareholders' meeting in March.
Kim Young-jin, KT’s Chief Financial Officer, said, “In 2021, we will become a company that grows in a differentiated way through the expansion of digital platform businesses and bold business portfolio transformation. We will focus on growth by consolidating group capabilities and strive to enhance corporate value based on this.”
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