Media and content business revenue increases as GiGA Genie subscribers grow

KT announced that it recorded revenue of 5.8266 trillion won and an operating profit of 377.3 billion won on a consolidated basis in the third quarter of 2017. Compared to the same period last year, revenue increased by 5.4%, but operating profit fell by 6.1% due to increased marketing expenses and the Broadcasting Development Fund.

Looking at the services individually, the sustained growth of the media and content sector was notable. AI TV 'GiGA Genie,' which recently surpassed 300,000 subscribers, improved satisfaction with KT's media services and served as the foundation for the media and content sector to continue its double-digit growth rate compared to the same period last year.

Total wireless subscribers increased by approximately 274,000 compared to the previous quarter, driven by a steady rise in subscribers to second devices and Internet of Things (IoT) services. However, wireless service revenue fell by 0.7% year-on-year to 1.6634 trillion won, as services such as terminal insurance were excluded from revenue due to changes in accounting standards.

In the wired business, the growth of Gig Internet continued to slow the decline in landline revenue. KT Gig Internet, which marked its third anniversary this October, currently has over 3.6 million subscribers, accounting for 42% of KT's total high-speed internet subscribers. Driven by the steady increase in Gig Internet subscribers, internet business revenue grew by 3.9% compared to the same period last year.

The media and content business recorded sales of 572.6 billion won, up 15.8% from the same period last year, driven by an increase in premium IPTV subscribers and overall service usage. In particular, GiGA Genie is receiving favorable reviews from middle-aged and older adults who find IPTV difficult due to its diverse functions and ease of use, thereby expanding the base of loyal customers for KT's media services.

GiGA Genie is expected to see even higher user satisfaction as its voice recognition conversational technology is improved and functions such as finance and shopping are further upgraded. KT plans to expand the artificial intelligence technology that contributed to the growth of its media and content business to other business areas.

Revenue from the financial business reached 873.9 billion won, a 0.9% increase from 866.4 billion won the previous year, as BC Card's domestic usage share grew and UnionPay card acquisition volume, which had slowed following the THAAD incident, showed signs of recovery. Revenue from other services recorded 566.2 billion won, a 4.9% increase year-on-year, driven by revitalization in the real estate and Internet Data Center (IDC) businesses.

KT is enhancing customer benefits in line with the launch of premium smartphones such as the Galaxy Note 8, V30, and iPhone 8 series. The 'Premium Family Combination,' launched in September, is a promotional plan where if only one family member chooses the unlimited data service (speed is throttled after the basic allowance is exhausted), other family members are provided with unlimited data service at half the usage fee.

In October, overseas data rates were lowered to domestic levels to enhance benefits for international travelers. To this end, the rate per data roaming packet was reduced by 87%. This is equivalent to the data rate level of domestic standard rate plans. As a result, the burden of data usage overseas is expected to decrease significantly, even without prior application for additional services such as unlimited data roaming.

KT CFO Shin Kwang-seok, Executive Vice President, stated, “While we anticipate that a decline in revenue is inevitable for the time being due to policies aimed at lowering household telecommunication costs, we plan to continue our growth by identifying new opportunities in our core businesses.” He added, “Above all, we will create new growth engines by discovering services that customers truly need, based on innovative technologies for people, such as the AI TV GiGA Genie.”