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Increased marketing and investment costs due to 5G… Expectation of efficiency

Increased marketing

Increased marketing Negative effects on the profitability of the three companies are marketing and investment costs. This is an essential expenditure for 5G commercialization. Marketing costs are mostly used for subsidies to recruit 5G subscribers, and network investment is attributable to the expansion of 5G coverage. If wireless revenue revenue growth is a “bright side” resulting from the commercialization of 5G, the increased marketing and network investment will be closer to the “dark side.”

SK Telecom spent 7587 billion won in marketing in the third quarter. This is an increase of 7.0% over the same period last year. CAPEX spent 661 billion won, up 64.3% year-on-year.Increased marketing

KT also spent W720.2bn, up 23.4% from the same period last year, and W724.1bn, up 59.8% from CAPEX. LG Uplus spent KRW 58861 billion, an increase of 17.5% year-on-year, and CAPEX spent KRW 884.6 billion, an increase of 169.4%.

The facility investments of the three companies are expected to remain similar. The company plans to expand 5G coverage to 80% of the population by the end of this year, and plans to invest in “in-building” to make 5G available in buildings.

However, marketing expenses are likely to be managed efficiently in the future. This is because the three carriers agree to avoid bleeding marketing to recruit 5G subscribers. The three companies have incurred enormous marketing costs in the early stages of commercialization of 5G, but since September, the competition has been somewhat relaxed.

Yun Poong-young, head of SK Telecom Corporate Center, said, “We will lead the paradigm shift to differentiated service competition such as 5G cluster rather than marketing cost competition.” I will. ”

Lee Hyuk-joo, CFO of LG Uplus, said, “The marketing cost is very high at 24.6%. We are sorry for disappointing the market. ”“ We are focusing on improving the quality of service that users experience by expanding network coverage and speeding up networks in the border areas. ”

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