Input 2021.02.03 17:31
Net increase in 5G subscribers… “At the latest, the breakeven point in the second half of next year”
Continuous strengthening of media and B2B business along with wireless business
Hyuk-Joo Lee, Chief Financial Officer (CFO/Vice President) of LG U+, said in a conference call held after the 4th quarter results announcement on the 3rd, “If we maintain 5 million 5G subscribers on average per year, we expect to achieve the break-even point (BEP). In addition, the number of 5G subscribers has increased a lot with the iPhone 12, and considering this year’s handset lineup, 5G subscribers are expected to reach 4 million.
He added, “According to the judgment of the working-level, we are talking about (realization of the break-even point) in the middle of next year, but conservatively, we expect that the break-even will be realized in the second half of next year.”
On this day, LG Uplus announced on the 3rd that it was tentatively counted as a consolidated basis for last year’s operating profit to 86.2 billion won, an increase of 29.1% from the previous year. The sales were 13,4176 billion won, an increase of 8.4% from the previous year.
LG U+ aims to focus on’qualitative growth’ by making customer value increase as a top priority this year. Stock prices predict that LG U+ will achieve 1 trillion won in operating profit this year.
First of all, looking at the wireless business, the total number of wireless subscribers to LG U+ was 16652,000, an increase of 9.2% from the previous year. In particular, the number of 5G subscribers increased by 136.6% to 2756,000. However, stock prices are concerned that the average revenue per subscriber (ARPU) may decrease even if the number of subscribers increases as the 5G mid-to-low price plan expands.
Last year’s facility investment (CAPEX) spent 2,380.5 billion won in building a base station to expand 5G coverage. The CFO said, “By promoting the joint use of 5G networks (roaming) between telecommunications companies in rural areas, it is expected that each company will save 1 trillion won in facility investment (CAPEX). “There has been great progress in the way it is built into.”
The’smart home’ division, consisting of Internet TV (IPTV) and high-speed Internet, generated sales of KRW 2,134 trillion, up 9.9% from the previous year.
The home IoT service also grew more than 30% year-on-year in total sales last year due to steady demand growth. With double-digit growth this year, we expect a profit turnaround within the year. The company explained that the demand from customers for high-end home appliances and hyper-connectivity is steadily increasing as the time to stay at home increases due to Corona.
This year, LG Uplus plans to increase IPTV competitiveness by using educational content tailored to the untact era, and to explore new services through collaboration with global operators such as Netflix and Google.
In the corporate business sector, it focuses on securing new foods, focusing on smart factories, smart cities, and smart mobility in line with 5G.
“The 5G B2B market is expected to grow due to the expansion of business opportunities in public areas such as the Korean version of New Deal,” said Jo Won-seok, head of LG U+’s new business group. “There are continuous references to applying various 5G solutions in smart factories and local government smart industrial complexes “There is.”
Together with its subsidiary, LG Hello Vision, it is also spurring synergy creation by discovering various convergence services. It plans to consider ways to maximize synergy, such as reducing costs and strengthening competitiveness by jointly using resources with LG Hello Vision.
The CFO said, “LG HelloVision must have had disappointment in its external financial statements last year,” but “there is a change due to digital subscribers in TV and broadband subscribers in the Internet. Profits are expected to increase by more than 10% each.”