Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

I investigate special situations, pairs, and index rebalancing trades in Korea.

Korea / Special Sits, Pairs, Index Rebalancing

KT: Phone Firm Is Reaping in Fast-Wireless Subscribers

Equity Bottom-Up

<p>Apparently, KT and LGU+ haver had a good year in 2016. SKT didn’t have a bad year either. But I’m still concerned about their growth prospect. Their wireless ARPU growth continues to be stagnant, and more importantly, they can no longer rely on wireless subscriber growth. The improvement in profitability in 2016 (especially for KT and LGU+) was mainly attributable to the lessened marketing war. Well, the lack of growth driver isn’t the problem only for Korean telcos. Almost everyone in the telecom industry is desperately trying to find new growth drivers. This is exactly why many of us are excited about IoT. This is like one user now uses multiple telecom lines. Definitely, this can lead to a huge top line growth for network operators (telcos). However, many aspects of this IoT thing still seem to be very vague in terms of how it can generate actual income for telcos. There are only few (at least at this time) that show a real promise. Connected Car is one of these few promising ones. So, I will dig a little into what Korean telcos are up to with this connected car business and how they are planning to use for their top line growth. </p>

Apparently, KT and LGU+ haver had a good year in 2016. SKT didn’t have a bad year either. But I’m still concerned about their growth prospect. Their wireless ARPU growth continues to be stagnant, and more importantly, they can no longer rely on wireless subscriber growth. The improvement in profitability in 2016 (especially for KT and LGU+) was mainly attributable to the lessened marketing war. Well, the lack of growth driver isn’t the problem only for Korean telcos. Almost everyone in the telecom industry is desperately trying to find new growth drivers. This is exactly why many of us are excited about IoT. This is like one user now uses multiple telecom lines. Definitely, this can lead to a huge top line growth for network operators (telcos). However, many aspects of this IoT thing still seem to be very vague in terms of how it can generate actual income for telcos. There are only few (at least at this time) that show a real promise. Connected Car is one of these few promising ones. So, I will dig a little into what Korean telcos are up to with this connected car business and how they are planning to use for their top line growth. 

Glance at Where Korean Telcos Are With Connected/Autonomous Car

SK Telecom

Glance at Where Korean Telcos Are With Connected/Autonomous Car