South Korea's three mobile carriers posted a combined third-quarter operating profit of 1.36 trillion won this year, with results diverging by company. SK Telecom and LG Uplus improved profitability, while KT posted a decline. The three carriers are accelerating their push into AI data centers (DC) and the enterprise AI transition (AX) market alongside a recovery in core telecom profitability.

On Nov. 10, the telecom industry said SKT, KT and LG Uplus posted combined consolidated third-quarter revenue of 15.48 trillion won and operating profit of 1.36 trillion won. The divergence reflected base effects from one-off costs last year and compensation expenses related to a hacking incident.

SKT operating profit up 1,040 percent, LG Uplus up 84 percent; KT declines

SKT posted revenue of 4.50 trillion won and operating profit of 552.3 billion won, up 13.1 percent and 1,040.3 percent from a year earlier, respectively. A year earlier, operating profit fell to 48.4 billion won due to customer compensation and fee discounts tied to a hacking incident. This year, it has kept operating profit in the 500 billion won range for three consecutive quarters.

LG Uplus posted revenue of 3.98 trillion won, down 0.7 percent, but operating profit rose 84.1 percent to 297.6 billion won. It cited a base effect from a one-off labor cost burden last year and steps to improve efficiency in its business structure.

KT posted revenue of 7.00 trillion won and operating profit of 505.3 billion won, down 1.8 percent and 6.1 percent, respectively. It said profitability was pressured by a base effect from one-off development profit reflected last year, a customer reward program and AX business 추진 costs. Revenue at KT Cloud and KT Estate rose 7.7 percent and 39.1 percent, respectively.

Wireless business gap widens; KT says annual recovery difficult, LG Uplus posts net line growth

SKT's mobile service revenue rose 21.6 percent to 2.57 trillion won. It cited a base effect from a customer appreciation package last year and a marketing strategy centered on lifetime value (LTV). The number of mobile subscribers fell by about 54,000 from the previous quarter.

Bae Byung-chan (배병찬), head of SK Telecom's MNO Support Office, said on a conference call, "We are focusing on recovering fundamental competitiveness by avoiding excessive marketing competition and securing quality subscribers and qualitative growth through customer value innovation."

KT's wireless revenue fell 4.0 percent to 1.74 trillion won. The company said the decline reflected penalty-fee waivers and a customer reward program introduced after the hacking incident. Monthly average revenue per user (ARPU) rose to 34,711 won in September from 33,963 won in July, but quarterly ARPU fell 2.6 percent from a year earlier.

Park Hyun-jin (박현진), head of KT's Customer Division and a vice president, said, "Wireless results were weak through the third quarter due to subscriber declines in the first quarter and the impact of the customer reward program." He said, "We are seeing a recovery in August and September, but we think it will be difficult on an annual basis to surpass last year's results."

LG Uplus was the only one of the three to post a net increase in subscriber lines, including both its mobile network operator (MNO) and mobile virtual network operator (MVNO) businesses. Mobile subscriber lines rose 6.2 percent to 32,143,000, while mobile revenue fell 0.9 percent to 1.69 trillion won.

Expanding AIDC investment and competing in AI token businesses; monetisation is key

The three carriers are fostering AIDC as a new growth engine and stepping up competition in enterprise AI services. SKT's third-quarter AIDC revenue rose 6.2 percent to 126.1 billion won, while AI business-to-business (B2B) and business-to-consumer (B2C) revenue rose 27.3 percent to 70.0 billion won.

SKT has secured building permits for some capacity at its Ulsan AIDC and is discussing business terms with 3 to 4 global operators. It plans to begin phased operations at the Ulsan AIDC from the second half of 2029. It also plans to apply its own AI foundation model to A.Dot and business AI services, and to target the enterprise AI infrastructure market through an AI token gateway business.

Park Jong-seok (박종석), SKT's chief financial officer, said, "Based on two pillars, telecom and AI, we were able to achieve results of recovery and growth at the same time." He added, "We will continue to work to connect telecom and AI businesses into a single growth strategy and amplify synergies."

LG Uplus' AIDC revenue rose 27.7 percent to 131.7 billion won. It is building an AIDC in Paju with a power receiving capacity of 200 megawatts, and it plans to begin operations after the completion in June 2027 of one building with secured customers, with 50 megawatts of capacity. Standalone third-quarter capital expenditure (CAPEX) rose 30.1 percent to 569.8 billion won.

Yeo Myung-hee (여명희), LG Uplus CFO, said, "As AI adoption accelerates across the domestic industry overall, our AI investment is also gaining speed compared with the existing plan."

KT said its cumulative AX revenue through the third quarter, combined with KT Cloud, rose 11.9 percent from a year earlier. It plans to expand AIDC supply capacity to more than 1 gigawatt by 2031, and to target the enterprise AX market with 'KT Token Factory' launched last month. It plans to produce AI tokens using its own graphics processing unit (GPU) infrastructure and broker the use of external AI models as a future growth engine.

Park Sang-won (박상원), head of KT's AX Business Division and a managing director, said on a conference call, "The unique advantage of KT Token Factory is that it provides both token production and brokerage." He stressed, "It can create synergies by linking precise usage measurement and a billing system."