LG Uplus' third-quarter services revenue decreased by 0.5% with operating profit up 84% and net profit up 270%. The services revenue decline was driven by mobile, which declined 0.5% on lower interconnect revenue, while the previous year's retirement payouts boosted the profit growth.
The relaxation of the government’s covid mandates has increased cross-border travel and changed customer spending habits. We expect trends that show increases in data roaming revenue as well as mobile traffic to continue.
Bears
South Korea’s telecom market is highly competitive, and the core business is not significantly differentiated among competitors.
LG Uplus is a Korean telecommunications operator selling mobile and fixed-line products. It entered the Korean mobile market in 1996 as LG Telecom by acquiring a mobile license, then building out a mobile network. Parent company LG Corp. merged LG Telecom with LG Dacom and LG Powercom in 2010 to add fixed-line and internet capabilities to the existing mobile business and changed its name to LG Uplus that same year. The firm competes against KT and SK Telecom, which were formed from the previously state-owned monopoly, Korea Telecom. Given that KT and SKT had incumbent telecom businesses before LG Uplus started its business, LG Uplus has lower market shares than the other two in the key telecom services, but continues to gradually take market share.