Last year, domestic telecom companies increased marketing expense in a race to attract subscribers, while cutting investment in their core business of telecom facilities. In the number portability war, spending for short-term results rose, but a lack of focus on network upgrades was evident.
◇ Telecoms that increased marketing expense saw subscriber growth… only SKT declined
According to 2025 results released by the three telecom companies on the 16th, the combined annual marketing expense of SK Telecom, KT, and LG Uplus totaled 8.0493 trillion won. That was up 5.1% from 2024 (7.661 trillion won).
KT saw the biggest increase in marketing expense last year. KT's marketing expense (selling expense) came to 2.835 trillion won, up 13.7% from 2024 (2.4937 trillion won). The numbers confirm that the company mounted the most aggressive marketing push under penalty waiver conditions after the SK Telecom hacking incident in April last year. Subscriber indicators followed the same pattern. KT's mobile network operator (MNO) subscriber lines reached 20.61 million in the fourth quarter last year, up 8.7% from the previous year (18.95 million). LG Uplus also expanded its marketing expense expenditure. LG Uplus' marketing expense last year was 2.3143 trillion won, up 4.8% from 2024. Its MNO subscriber lines in the fourth quarter last year were 21.7 million, up 6.6% from the previous year (20.368 million).
In contrast, SK Telecom was the only one among the three to see a decline in marketing expense. SK Telecom's marketing expense last year was 2.9 trillion won, down 0.3% from 2024. Its MNO subscriber lines in the fourth quarter last year were 30.85 million, down 2.9% from the same period a year earlier (31.08 million). A telecom industry official said, "Due to the hacking incident that erupted last year, rival companies' marketing expense expenditure increased significantly to attract SK Telecom subscribers," and noted, "The impact of increases and decreases in marketing expense on subscriber number changes has been proven in the actual figures."
◇ Marketing expense expenditure overwhelms network investment
While telecom companies increased marketing expense expenditure to focus on attracting subscribers last year, they were passive in investing in their mainstay business of telecom networks. The combined capex (capital expenditure) of the three companies was 6.8189 trillion won last year, down 8.2% from 2024 (7.4342 trillion won). Telecom companies have been steadily reducing capex since 2022, citing artificial intelligence (AI) investment. On top of that, network investment also fell due to the hacking incident last year, breaking even the 7 trillion won capex threshold.
By company, SK Telecom posted the sharpest decline. Its capex spending last year was 2.129 trillion won, down 11% from 2024. KT's capex last year was 2.94 trillion won, down 5.8% from 2024. LG Uplus' capex expense last year was 1.7499 trillion won, down 8.9% from 2024.
On a full-year aggregates basis as well, marketing expense overwhelmed capex expense. The three companies' marketing expense last year was 8.0493 trillion won, 34% more than capex expense (6.0229 trillion won). Marketing expense at telecom companies has exceeded capex expense since 2024. In 2024, the three companies' marketing expense was 7.661 trillion won, 3% more than the three companies' combined capex expense (7.4343 trillion won). In 2023, the three companies' combined capex (8.5751 trillion won) was 13% more than the three companies' marketing expense (7.578 trillion won).
Kim Kyung-won, a distinguished professor of business administration at Sejong University, said, "With the repeal of the 'Mobile Device Distribution Improvement Act' and the hacking incident overlapping last year, the three telecom companies' marketing expense increased significantly," and added, "The structure in which the subscriber war takes precedence over network investment in terms of priority is becoming entrenched."