The hacking incident at SK Telecom has led to mixed results for the three major telecom companies in the second quarter of this year. SK Telecom, which experienced the hacking incident, recorded poor performance, while KT and LG Uplus achieved record results. Notably, KT was the first among the three telecom companies to surpass 1 trillion won in quarterly operating profit, contributing to a combined operating profit of 3 trillion won for the three companies in the first half of the year.
◇ Combined operating profit of the three telecom companies surpasses 3 trillion won for the first time in the first half
According to the telecom industry on the 11th, the combined operating profit of the three telecom companies (SK Telecom, KT, LG Uplus) in the second quarter of this year was 1.6638 trillion won, a 29.1% increase compared to the same period last year (1.2885 trillion won). Only SK Telecom saw a decrease in its second quarter operating profit (338.3 billion won), down 37% year-on-year, while KT (1.0148 trillion won) increased by 105.4%, and LG Uplus (310.7 billion won) grew by 23%.
A significant point is that the combined operating profit of the three telecom companies has surpassed 3 trillion won for the first time. The operating profit for the three telecom companies in the first half of this year stood at 3.1754 trillion won, reflecting a 25.2% increase compared to the first half of last year (2.5352 trillion won). The difference is only about 300 billion won compared to the annual combined operating profit of the three telecom companies last year (3.496 trillion won). If this trend continues, the industry forecasts that the combined operating profit of the three telecom companies will exceed 5 trillion won this year.
The three telecom companies have surpassed 4 trillion won in combined operating profit for three consecutive years since recording 4.0379 trillion won in 2021. However, the combined operating profit fell back to the 3 trillion won level as KT implemented large-scale restructuring in the fourth quarter of last year, resulting in an operational loss of 655.1 billion won.
◇ KT first to surpass 1 trillion won in quarterly operating profit among the telecom companies
KT opened the era of surpassing 1 trillion won in quarterly operating profit in the second quarter of this year, becoming the first among the three telecom companies to do so. The company achieved record performance due to the indirect effects of the hacking incident at SK Telecom, the cost savings from large-scale restructuring conducted last year, and profits from real estate sales. In the second quarter, profits from the sale of the East Pole apartments in the Gwangjin District of Seoul, a subsidiary of KT, amounted to 390 billion won, and the annual labor cost savings were reported to be around 300 billion won.
LG Uplus also benefited from the hacking incident at SK Telecom, exceeding 300 billion won in operating profit in the second quarter, thus setting a new record for quarterly performance. In contrast, SK Telecom faced a sharp decline in its operating profit and revenue in the second quarter. SK Telecom's revenue in the second quarter was 4.4746 trillion won, a decrease of 1.89% compared to the previous year. During the same period, KT's revenue (7.4274 trillion won) increased by 13.5%, while LG Uplus's revenue (3.4964 trillion won) rose by 8.3%.
The analysis suggests that the fall of SK Telecom, the top mobile communication provider, and the record performance of KT and LG Uplus were significantly influenced by the hacking incident at SK Telecom in April. According to the telecom industry, SK Telecom's expenditure on SIM card replacements in the second quarter amounted to 200 billion won. Since the hacking incident was revealed, approximately 720,000 subscribers have left SK Telecom until July. Meanwhile, KT and LG Uplus, along with budget mobile carriers, gained subscribers, benefitting from the situation. KT's mobile communication (MNO) subscriber lines increased to 19.84 million, up 11.6% from the same period last year (excluding IoT lines), while LG Uplus recorded 20.93 million subscribers, a 5.5% increase from a year earlier (including IoT lines).
Due to the hacking incident, SK Telecom's market share in mobile communications has fallen from the 40% range to the 30% range. According to the Ministry of Science and ICT, as of May, SK Telecom had 22,138,806 subscribers, accounting for 39.2% of the total mobile communication subscribers.