KT Corp (NYSE:KT) Q3 2018 Earnings Conference Call - Final Transcript

Nov 02, 2018 • 02:00 am ET

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KT Corp (NYSE:KT) Q3 2018 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

[Foreign Speech] Good morning and good evening. First of all, thank you all for joining this conference call. And now we will begin the conference of the Fiscal Year 2018 Third Quarter Earnings Results by KT. We will like to have welcoming remarks from Mr. Seung-Hoon Chi, KT IRO. And then, Mr. Kyung-keun Yoon, CFO, will present earnings result and entertain your questions. [Operator Instructions]

Now we would like to turn the conference over Mr. Seung-Hoon Chi, KT IRO.

Executive
Seung-Hoon Chi

[Foreign Speech]

Good afternoon, this is KT IRO Chi Seung-Hoon. Let me start the earnings conference call for the third quarter 2018. This earnings release call is being webcasted via our website and you can follow the slides as you listen on the call.

[Foreign Speech]

Please note that KT's earnings are based on consolidated financial statements under IFRS standards. We will begin with CFO Yoon Kyung-Keun's opening remarks, followed by highlights on third quarter 2018 results.

Executive
Kyung-Keun Yoon

[Foreign Speech]

Good afternoon, I am Yoon Kyung-Keun, CFO at KT. Despite higher wireless discounts and rate cuts for the vulnerable in third quarter, KT generated stable revenue through qualitative growth by strengthening the quality of our subscriber base in our key businesses.

[Foreign Speech]

First, for the wireless business. Third quarter MNO net additions reached 200,000 continuing the record of more than 200,000 net additions for every quarter consecutively in 2018.

[Foreign Speech]

The DataON rate plan, which is optimized based on the customer's data usage patterns is chosen by approximately 70% of the subscribers currently switching wireless handsets. The Y24 rate plan, which targets customers aged 24 and below, also provides the same benefits and was well received by younger generation customers. The Roaming ON rate plan, which offers the same coverage overseas as in Korea has been expanded to 16 countries, innovatively improving customer convenience.

[Foreign Speech]

For the Internet business, giga Internet subscribers continue to grow.

[Foreign Speech]

Third quarter giga Internet net additions was 220,000 taking the total to 4.7 million subscribers. Giga Internet subscribers now represent more than half of our total Internet subscribers at 54%. The third quarter year-to-date Internet business revenue grew 3.7% Y-o-Y showing steady growth trends.

[Foreign Speech]

Recently, KT launched commercial services for 10 giga Internet for the first time in Korea. We believe this offering together with wireless 5G services in the future will help us provide a broad range of high quality services that require large volume traffic.

[Foreign Speech]

For the IPTV business, for the third consecutive quarter in a row, net additions recorded 100,000 in total. And IPTV revenue increased 15.3% Y-o-Y continuing double-digit growth. In particular, the Kids Land service package, which covers all domestic services for kids, has been popular with households with young children because of the wide variety of child-friendly content, leading to cumulative users reaching 3.6 million subscribers, and VOD use totaling 230 million views in five months.

[Foreign Speech]

KT continues to exert its efforts to identify future growth drivers based on an intelligent