Competition in Korean mobile market declining in Q4

Korea's traditionally hotly contested mobile market is continuing to cool off in the fourth quarter, with the prospects for profitability improved over Q3. 

 

So says Korea Investment and Securities (KIS), which believes the resulting reduced advertising spend will raise operators' average profit margins above the 15% reached in Q3.

 

KIS notes that since August mobile number portability (MNP) additions, a convenient indicator of competition intensity, declined from a daily average of 32,359 in Q2 to just 12,132 in November.

 

Korean operators already benefited from decreased competition in Q3, but analysts - including KIS - had expected competition in Q4 to be slightly more intense than the previous quarter.

 

But one factor preventing the predicted heat-up was the October resignation and arrest of former KT CEO Nam Joong-Soo, who had been indicted over bribery allegations. 

 

According to KIS, the subsequent uncertainty over the appointment of a new CEO prevented KT from focusing on the sale of bundled products on a full scale.

 

The country's three mobile operators - KTF, SK Telecom and LG Telecom - have also already achieved their subscriber targets for the year, so are focusing less on competition this quarter, according to the report.

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