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By Jun Ji-hye
SK Telecom, KT and LG Uplus are rushing to find new sources of income in the areas of media, real estate, finance and security, to offset the largely-saturated, highly-competitive wireless telecommunication businesses, company officials said Monday.
Mobile carriers here have been struggling with worsening profitability due to the Moon Jae-in administration's push to reduce households' telecom expenditures.
According to the third-quarter earnings reports announced by SK Telecom, KT and LG Uplus, their operating profit was 901.7 billion won ($807 million), an 8.3 percent decrease from a year ago.
The profit has remained below 1 trillion won for five consecutive quarters since the figure was tallied at 1.08 trillion won in the second quarter of last year. Their average revenue per user (ARPU), a representative profitability figure, has continued to drop as well.
On the other hand, their media and content business based on their internet protocol televisions (IPTV) has appeared to have grown gradually, becoming a new revenue source.
The results were attributed to telecom firms' efforts to enhance content and services to better respond to individual customer's tastes.
SK Broadband, the internet and television service arm of the nation's top mobile carrier, introduced customized home screens for the firm's IPTV in August, which reflect patterns of use and viewing history information of each customer.
KT has consistently upgraded services for children on its IPTV, releasing Kids' Land 2.0, an improved version of Kids' Land 1.0 launched in May.
Kids' Land 2.0, unveiled last month, features enhanced content for parents who have difficulty in infant care as well as content helping children to improve their TV viewing habits
.
LG Uplus has also taken a series of aggressive strategies for its IPTV business. In September, the firm installed Google's AI voice assistant, dubbed Google Assistant, in the U+tv UHD set-top box, and is moving to introduce online streaming TV service Netflix on its IPTV in a bid to differentiate its content from competitors.
Besides media and content, the companies expect new other areas to bring them hopes.
SK Telecom is currently nurturing security business as its new growth engine through the acquisition of security platform provider ADT Caps. The mobile carrier plans to create synergy by applying its advanced technologies such as artificial intelligence, big data and internet of things (IoT) to the security business.
KT is seeking to raise its profitability in K bank, the country's first internet-only bank launched last year, and real estate business led by its subsidiary KT estate.
KT chief financial officer (CFO) Yoon Kyung-keun said in a conference call after the third-quarter earnings announcement, Friday that the company would try to increase its stake in K bank to a maximum limit of 34 percent when a new law governing internet banks takes effect in January next year.
"We plan to expand our stake to the maximum limit, but detailed scale or timing has yet to be finalized," he said.
The firm also aims to achieve some 700 billion won in sales by the end of 2020 in the real estate business.
In its latest move, KT opened the Novotel Ambassador Hotel and Residence in July, built at the site of its former Euljiro office in Jung-gu. The firm said the hotel was the first-ever "AI hotel" in the nation.
KT plans to open three more hotels with advanced technologies in Seoul by 2022, including a hotel brand under Hyatt near Apgujeong Station, scheduled to open next year.
For its part, LG Uplus is moving to take over CJ Hello, the nation's largest cable television operator, in a bid to expand its share in the subscription TV market.
