Mobile carriers have significantly increased their annual operating profits thanks to the increase in 5G subscribers.
Amid the spread of non-face-to-face culture due to Corona 19, the wired and wireless communication business showed even growth, but the key to the annual operating profit growth of the 20% range, close to 30%, is the rapid growth of wireless service sales due to the expansion of 5G subscribers.
Last year’s annual wireless service sales announced by SK Telecom and LG Uplus on the 3rd recorded 9.98 trillion won and 5.46 trillion won respectively.
This is an increase of 2.7% and 5.8%, respectively, compared to the previous year.
■ Major business wireless service sales high
SK Telecom’s annual wireless service sales showed a steadily decline of KRW 1.07 trillion in 2017, KRW 10 trillion in 2018, and KRW 9.72 trillion in 2019, but increased by 2.7% from the previous year to KRW 9 trillion thanks to the increase in the proportion of 5G subscribers. It recorded 980 billion won.
After accelerating the spread of 5G and reducing the burden of communication costs, it has succeeded in turning around its annual sales.
LG U+ recorded 5.46 trillion won in wireless service sales in 2019, an increase of 5.8% from 5.16 trillion won. In the fourth quarter, wireless service sales increased by 6.7% compared to the previous quarter to KRW 1.39 trillion.
This rapid increase in wireless service sales has greatly contributed to the company’s overall performance improvement. Wired services, including IPTV and high-speed Internet, are also showing steady growth, but the proportion of wireless service sales is high.
The wireless business accounted for about 63% of SK Telecom’s total sales last year. LG U+’s wireless business accounts for 43% of total sales.
In other words, it is explained that the earnings improvement was achieved in the largest business area, and it led to nearly 30% annual operating profit growth without showing a significant difference in operating expenses.
SK Telecom’s and LG U+’s operating profits for the past year were 1.3 trillion won and 8861 billion won, respectively, up 27.5% and 29.1% from the previous year.
■ Acceleration of increasing the proportion of 5G subscribers
Saturation of subscribers The remarkable growth in wireless service performance in the domestic market is one of the biggest reasons for the expansion of 5G subscribers.
It is explained that the transition to 5G subscribers played a role in a new growth breakthrough, just as when the LTE was introduced, converting 3G subscribers to LTE and boosting performance.
SK Telecom’s wireless subscribers last year amounted to 31384,000. Among them, 5G subscribers were counted at 5476,000. It has attracted 3.32 million subscribers, more than existing subscribers in the past year, from 2084,000 in 2019.
LG U+ has 2.756,000 5G subscribers out of the total of 16652 thousand wireless subscribers. LG U+ has also more than doubled from 1165,000 5G subscribers in 2019.
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KT, which is about to announce its earnings next week, is expected to show similar patterns in which wireless service sales and operating profit soar as 5G subscribers expand.
KT secured 3617,000 5G subscribers last year. This is the result of securing about 2198,000 5G subscribers from the end of 2019.