According to the industry analysts, the estimated profits of SK telecom, KT, LG U+ during the second quarter will be 9.2billion KRW. This marks a 4.5 percent increase compared to the 8.082 billion KRW generated in profits last quarter. (image: Kobiz Media / Korea Bizwire)
Seoul, July 8 (Korea Bizwire) – Data-oriented rate plans have turned out to have a positive effect on the sales of mobile communications companies. Concerns arose when the plans were first launched, but now it is estimated that average revenue per user(ARPU) has actually increased. Non- LTE users making the jump to LTE plans seem to have prevented the ARPU from dropping.
According to the industry analysts, the estimated profits of SK telecom, KT, LG U+ during the second quarter will be 9.2billion KRW. This marks a 4.5 percent increase compared to the 8.082 billion KRW generated in profits last quarter.
With the launch of data rate plans, industry watchers predicted that there would be a negative impact on profits in the mobile communications industry as users who selected expensive plans that provided unlimited voice communication were able to switch over to the 29,900 KRW plan.
However, data usage has increased, leading to an improvement in ARPU, and the users who had put off changing their service to LTE finally switched over and stopped the ARPU from dropping. The ARPU for LTE customers is over 30,000 KRW, while the ARPU for 3G customers is around 20,000 KRW. Analysts expect that the ARPU of mobile communications companies increased by 1% during this period.
Once data usage increases, more expensive plans will appeal to users who are seeking to expand their data capacity, thus resulting in further increases to the ARPU.
Mobile communication industry officials say, “Data oriented plans will meet both the needs of users who want lower prices in mobile communication, and the needs of companies in the industry, who are looking to maximize their profits.”
By Francine Jung (francine.jung@kobizmedia.co.kr)
