The Korea Herald

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[Newsmaker] LG Uplus rises on LTE leadership

Faster connection spurs Uplus to close in on KT

By Park Hyung-ki

Published : Feb. 3, 2014 - 20:29

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Lee Sang-chul (The Korea Herald) Lee Sang-chul (The Korea Herald)

LG Uplus was always the smallest and branded the worst telecommunication service provider that stood in the shadows of SK Telecom and KT.

Feature phones carried by LG Uplus did not work especially in provincial areas, and its fiber optic broadband was weak compared to its rivals, leading many a consumer to shun its services.

Just when it was struggling to find the next big thing that could help the company surpass the formidable No. 2 KT, if not SKT, LG Uplus headed by CEO Lee Sang-chul pounced on Long Term Evolution as its golden opportunity while the two others were still focused on 3G.

Looking at LG Uplus now, the next-generation wireless LTE was well worth the risk for the littlest player, which aggressively invested in it and pushed to establish ultra-fast networks worth some 1.7 trillion won amid the smartphone boom.

“The Timing seemed near perfect for LG Uplus on LTE, which had been the ‘light’ it was looking for at the end of a long tunnel,” said an industry source.

CEO Lee’s “the faster, the better” service management mentality proved right: The company posted “surprise earnings” in 2013 and now, the country is witnessing a rapid rise in 4G mobile users, who currently account for more than 50 percent of total subscribers.

Now that LG Uplus is quickly transforming into a “fast follower” that has put the two giants, especially KT, on alert in the LTE race, LG Uplus is looking to be the David who overcomes Goliath, the source said.

“The emergence of LG Uplus in the LTE market has inevitably pushed its top competitors to implement countermeasures,” said Hwang Sung-jin, an analyst at HMC Investment Securities.

LG Uplus saw its annual operating profit increase 327.7 percent to 542.1 billion won last year, compared with SKT’s increase of 16.2 percent in operating income and KT’s decrease of 27.7 percent.

LG Uplus, whose LTE users account for 65 percent of the total, is quickly gaining on KT. SKT currently dominates with a 50 percent share, followed by KT with 20 percent and LG Uplus with 19 percent.

However, it remains to be seen whether LG Uplus will ever fulfill CEO Lee’s wish for it to become the first mover, especially when his KT counterpart Hwang Chang-gyu is pulling out all the stops to stay competitive in the highly saturated market by creating comparative customer services.

By Park Hyong-ki (hkp@heraldcorp.com)