Korean operator KT Freetel (KTF) saw its profits fall on increased subscriber acquisition costs and marketing costs related to marketing the company's HSDPA services. Service revenues went up 4.8 percent to KRW 1.38 trillion, compared with KRW 1.31 trillion as subscriber numbers and data revenues (5.4%) went up in the quarter. However, operating income fell 40.2 percent to KRW 91.29 billion, versus KRW 152.68 billion in the year-ago quarter. EBITDA stood at KRW 378.92 billion, down 13.1 percent from KRW 435.81 billion due to escalated marketing costs (up 35.4 percent year-on-year) and decreased profits from interconnection. Before tax income fell 37 percent to KRW 63.15 billion from KRW 100.18 billion. KTF's net income fell 36.5 percent to KRW 51.14 billion from KRW 80.58 billion in Q2 2006 due to increased taxes and weak operating income.
Voice revenues were KRW 766.69 billion, up 3.5 percent, and data revenues rose 5.4 percent to KRW 195.27 billion. Interconnection revenues were flat year-on-year at KRW 249.28 billion but resale revenues rose 11 percent to KRW 130.67 billion. Handset sales revenues jumped 31.6 percent to KRW 427.62 billion on increased sign-ups.
KTF ended the second quarter with 13.51 million subscribers, up from 12.91 million at the end of the year. The company's net adds rose to 355,000. Most subscribers use the company's EV-DO (5.78 million) or 1X (6.54 million) networks. KTF further has 941,000 WCDMA subscribers and 249,000 2G users. ARPU (excluding interconnect) stood at KRW 30,688 versus KRW 30,881 a year ago.
