KT swings to profit in Q4 on iPhone sales

   South Korea's biggest telecom company KT Corp. said Friday that it returned to the black in the fourth quarter of 2010 from a net loss a year earlier, helped by brisk sales of Apple Inc.'s iPhone.

   Net profit reached 105.1 billion won ($94.3 million) in the October-December period, compared with a net loss of 430.5 billion won one year earlier, it said in a regulatory filing. The loss in the year-earlier period was caused by early retirement packages.

   The figure was lower than expected. KT was forecast to earn 221.3 billion won, according to the median estimate of an analyst poll by Yonhap Infomax, the financial news arm of Yonhap News Agency.

KT, the country's sole provider of iPhone and iPad (Yonhap News)

   Sales rose 9.3 percent to 5.2 trillion won in the fourth quarter, while operating profit reached 304.7 billion won, compared with a loss of 549.5 billion won in the year-earlier quarter, it said.

   The biggest profit growth in the quarter came from the wireless data sales, which jumped 15 percent from the previous year, thanks to the increase in KT's data-gobbling smartphone users.

   The company secured 2.73 million smartphone subscribers as of 2010, including 2 million iPhone users. South Korea's smartphone users are estimated at 7 million users.

   KT, which merged with its mobile-phone unit KT Freetel Co. in June 2009 to better combine fixed-line phone, broadband Internet and wireless services, introduced the iPhone in the country five months later in the same year, stirring the smartphone boom in the saturated local wireless market.

   Smartphones, the feature-packed, advanced phones that play music and video, download applications and surf the Web, will account for 70 percent of KT's total cell-phone lineup this year.

The company aims to secure 6.5 million smartphone users by the end of this year. 

   In the saturated local wireless market, where each person has more than one cell phone on average, the booming demand for smartphones has helped mobile carriers secure new revenue sources from wireless data sales and pocket fatter margins. 

   SK Telecom Co., the leading mobile operator in the country, eyes 10 million smartphone subscribers by December, compared with 3.91 million smartphone users one year ago.

   The introduction of popular smartphone models, such as the iPhone, helped KT gain ground in the fiercely competitive wireless market in South Korea. KT's mobile market share inched up 0.3 percent from one year ago to 31.6 percent in 2010.

   SK Telecom accounted for 50.6 percent of South Korea's 51-million-unit mobile market, while LG Uplus Corp., the smallest mobile carrier, holds a 17.8 percent share.

   For the full-year, net income amounted to 1.2 trillion won ($1.1 billion) in 2010, KT said. Annual sales reached 20.2 trillion won and full-year operating profit stood at 2.1 trillion won.

   The company said that it will pay a dividend of 2,410 won per common share.

   KT said it is aiming to post sales of 20.5 trillion won this year and 30 trillion won in 2015 by boosting its mobile-phone business and new businesses, such as cloud computing. 

(Yonhap News)