hanarotelecom losses widen on the back of VoD start-up costs

South Korean fixed line operator hanarotelecom (Hanaro) has posted a widening of net losses in the third quarter of 2006, despite a 19.1% increase in revenues year-on-year and increased synergies associated to its merger with ISP Thrunet. In the three months ended 30 September 2006 the company’s net loss reached KRW17.8 billion (USD19.1 million) from KRW16.5 billion in the year-ago quarter. Revenues reached KRW430.9 billion, up from KRW361.7 billion. Operating profit was KRW10.6 billion, down from KRW15 billion in 3Q 2005, but EBITDA increased 5.3% to KRW135.8 billion; EBITDA margin was 31.5%.

Hanaro launched its first video-on-demand (VoD) service, HanaTV, in July and said the service was meeting targets, with 82,000 people singing up so far, 60,000 of which have been activated. The telco said that it added ‘more than 60,000′ broadband subscribers in the period, a turnaround from a net decrease in the previous quarter. It also expanded the coverage of its 100Mbps optical LAN service to 3.8 million households and now has almost 800,000 cumulative optical LAN subscribers. The company said that the launch of HanaTV prompted a rise in overall marketing expenses which were only partly offset by cuts in its traditional businesses, as well as improved interconnection rates.

Hanaro ended September with 3.6 million broadband subscribers, including 717,234 xDSL users, 785,267 optical LAN customers and 2.1 million with cable modems. Earlier this month Hanaro struck a deal to acquire internet subscribers from troubled rival Onse Telecom. Hanaro agreed to pay KRW250,000 (USD265) to Onse for every user who agrees to move and expects to add around 140,000 broadband subscribers as a result of the deal.

Source- telegeography Wireless Mobile Telecom