LG Telecom reports two quarters’ loss
As leaders in the mobile phone manufacturing and network industries are experiencing the effects of economic recession, so is the smallest South Korean entity LG Telecom, Ltd.
The mobile phone operator seems to be shrinking even smaller with its second straight quarterly loss of profits. From its 99.4 billion earned in 2008, the third quarter net fell down by 6.8%.
But many analysts were quick to say it isn’t so much about the global economic slump, but instead, the decline came about naturally after LG Telecom was witness pouring much on their marketing campaign.
Starting on the second half of 2009, LG was keen on biting off market shares from its competitors KT Corporation and SK Telecom Company. Only a week ago, LG announced its plans to employ affiliate expertise of both LG Dacom Corporation and LG Powercom Corporation to gain an edge over its competitors.
With LG Telecom offering an option of high-speed internet bundled with wireless and fixed-line services, it will no doubt have a bigger bit in the market. But as to the question if it could put KT’s position below it, that remains to be seen. What is clear ahead is the huge gap between the dwarf that is LG and KT, the giant in South Korea’s phone and internet industry.
Analysts were speedy in giving their ideas that LG Telecom will not have things better overnight and it will need to stabilize its marketing costs and operations. The two-quarter losing LG has been criticized for its heavy expenses on advertising and subsidies of users’ handset payments, moves that their leading competitors would not bet on.
Once the merger materializes, it will sure help LG Telecom’s cost savings effort and will drive the company to key share price force in the telecommunications industry of the country.
For related information, click here: Bloomberg
