KT Corp. (NYSE:KT) Q4 2018 Earnings Conference Call Transcript

(Foreign Language)

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 2018 Fourth Quarter Earnings Results by KT. We would 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. Mr. Kyung-Keun Yoon, CFO, will present earnings result and entertain your questions as well. This conference will start with a presentation followed by our Q-and-A session. (Operator Instructions)

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

(Foreign Language)

Good afternoon, I'm Chi Seung-Hoon, KT's IRO. This earnings release call is currently being webcasted via our website, and you can follow the slides as you listen in on the call. Let us now begin KT's 2018 full year earnings presentation.

(Foreign Language)

Please note that KT's earnings are based on consolidated financial statements under the IFRS standards. We will now begin with our CFO Kyung-keun Yoon's opening remarks, followed by highlights on 2018 full year results, including Q4 figures.

(Foreign Language)

Good afternoon, I'm Kyung-keun Yoon, KT's CFO. Under difficult market backdrop characterized by mobile tariff cuts and fiercer competition in the fixed-line market, KT was able to expand high-quality subscribers and implemented efficient marketing and investment, thereby generating stable earnings.

(Foreign Language)

In Wireless business, we launched new rate plans, such as Data ON and Roaming On preemptively, which invited positive responses from many subscribers. We also introduced rate plans, specifically geared towards teens and 20s, called Y24 ON and Yteen ON and by offering useful membership benefits and data box service allowing friends and families to share data, we conducted targeted marketing for the younger generation, which led to quality growth around handset subscribers. As a result, 2018 MNO subscriber net adds was up 17% year-over-year, reporting 920,000, of which handset subscriber net addition was 140,000.

(Foreign Language)

In the Internet business, we showed growth sustained around GiGA Internet. In 2018 for GiGA Internet there was 950,000 net additions, leading to a base of 4,890,000 million subscribers, which accounts for more than half at 56% of the total Internet subscriber base. At the end of last year, for the first time in Korea, we also launched 10 GiGA Internet, broadening the market into data heavy users and Soho subscribers. We expect 10G Internet, together with 5G services will offer customers distinctive services as they lead the premium market.

(Foreign Language)

For the IPTV business with 380,000 subscriber net adds over last year, we acquired a total of 7,850,000 subscribers, driven by subscriber growth and continuous growth from platform revenues, such as paid VOD and commerce. Stand-alone IPTV revenue was up more than 15% year-over-year, reporting KRW1.4 trillion. This year, we are committed to solidifying our position as a number one media platform by offering customized services and differentiated kids contents and movies, et cetera.

(Foreign Language)

We are also seeing meaningful results