Samsung Galaxy S2 gets 200,000 pre-orders in South Korea
Samsung has launched its Galaxy S2 smartphone in South Korea and has reportedly received pre-orders from three major mobile operators exceeding 200,000.
SK Telecom took over 160,000 pre-orders for Galaxy S2 smartphone from 25-29 April.
The number reached 10,000 in 29 minutes after starting to take pre-orders and 20,000 in 64 minutes. LG Uplus has received more than 30,000 pre-orders for the smartphone since 21 April.
KT has not disclosed its figures. Apple also launched its iPad 2 through KT and SK Telecom.
Samsung offers Galaxy S II smartphone in South Korea
Samsung Electronics has introduced the Galaxy S II smartphone in South Korea with sales in at least 120 countries, including Japan, set to begin in stages from the end of May.
The Galaxy S II smartphone is a follow-up to the Galaxy S model that features the Android 2.3 operating system.
The Galaxy S II features a 4.3-inch OEL (organic electroluminescent) display and a 1.2GHz dual-core processor.
Samsung will target a more than fivefold sales increase on the year to 7-8 million units, stated a company official in charge of mobile operations.
Korean iPhone users join class action against Apple
Nearly 29 of South Korean iPhone users have joined in a class action against Apple and its Korean unit over the company’s alleged illegal collection of user location data.
According to legal representatives of the plaintiffs, they learned that their whereabouts over the past six months were entirely revealed. It’s a privacy violation.
The Korea Communications Commission has already begun an investigation into the matter.
SK Telecom to start iPad 2 sales (S Korea)
SK Telecom will offer iPad 2 with Wi-Fi + 3G in Korea from 29 April.
The operator will offer all models of iPad 2 with Wi-Fi + 3G at a discounted price on select tariff plans with a two-year contract, as well as a range of data plans for iPad 2 without a contract.
LG Electronics profit falls in Q1 (South Korea)
LG Electronics has reported that its Q1 sales decrease by 0.4% to US$12.18 billion, while net profit plunged to US$14.81 million from US$625.25 million a year earlier.
EBITDA nearly halved to US$398 million, and operating profit fell 73% to US$121.30 million. Operating profit was down across all its divisions, while only home appliances, air conditioning and energy products showed sales growth.
At the Mobile division, revenues fell 8.3% year-on-year to US$2.69 billion. The operating result moved to a loss of US$93.52 million from a profit of US$26.85 million a year earlier, but was still an improvement on the past three quarters.
Shipments declined 20 percent from Q4 and 10% year-on-year to 24.5 million phones. LG stated that shipments increased in China, the Middle East and Africa, but other regions declined due to efforts to improve product mix and seasonality. The company expects competition in the smartphone market to intensify, and will work on boosting its own share of the market while lowering overhead costs.
Ericsson Q1 sales rise by 17% (S Korea)
Ericsson has reported that its first-quarter sales rose by 17% to US$8.67 million. Sales for comparable units, adjusted for currency exchange rate effects and hedging, increased 25% year-over-year.
Net profit jumped by 220% to US$675 million, compared to US$212.76 million a year ago. The lower figure from 2010 was partly due to a US$360.10 million restructuring charge.
Gross margin in the quarter was flat year-over-year at 38.5%.
The increase in Group sales was driven by segment Networks where revenues grew 35% year-over-year with an EBITA margin of 20%. The strong demand for mobile broadband resulted in five out of ten regions showing growth year-over-year. Countries with especially strong growth were the US, India, Japan, Korea and Russia. China had continued good momentum for 2G.
Sales in the first quarter were not impacted by the devastating earthquake and tsunami in Japan. However, the company’s supply chain of components is partly dependent on Japan and it estimates that there will be delays in delivery of certain products.
Fitch affirms ratings of LG Uplus at ‘BBB-’ (South Korea)
Fitch Ratings has today affirmed LG Uplus’s (LGU) Long-Term Foreign and Local-Currency Issuer Default Ratings (IDRs) at ‘BBB-’. The Outlook on the IDRs is Stable. At the same time, the agency has also assigned a senior unsecured rating of ‘BBB-’ to the company.
The ratings reflect LGU’s position as a fully diversified telecommunications operator in South Korea, in third place in terms of both wireless and fixed line market shares behind SK Telecom Co., Ltd (‘A’/Stable) and KT Corporation (‘A’/Stable). During the financial year ended 31 December 2010 (FY10), LGU’s first year after its three-way merger with LG Dacom and LG Powercom, the company’s adjusted revenues grew 5.5% yoy to KRW8.0trn, but its EBITDA margin fell to 17.6% from 20.2% in the previous year.
Against the backdrop of a highly saturated telecom industry in South Korea, the intensity of competition remained high in FY10 as the operators focused on acquiring smartphone subscribers to enhance data revenue and improve profitability. However, LGU’s inability to offer some of the more popular models prevented the company from building a meaningful smartphone subscriber base. This disadvantage left the company’s marketing strategy centred on feature phones which required an increasingly higher upfront subsidy to attract subscribers away from the popular smartphones, causing LGU’s margins to deteriorate in FY10.
However, Fitch still expects that LGU will be able to increase the number of its smartphone subscribers in a meaningful manner and gradually improve its profitability in FY11. Firstly, the agency notes that the company’s smartphone net additions significantly increased since the launch of LG Electronics Inc’s (LGE, ‘BBB’/Stable) Optimus One model in Q4FY10, and its market share of smartphone subscribers improved to 10% at end-February 2011 compared with just 2% in Q1FY10. Secondly, Fitch anticipates that the recent change to major handset makers’ distribution policies (to supply the popular smartphone models more on a non-exclusive basis) together with the recovery of LGE’s handset business will enable LGU to offer a range of highly competitive smartphones in FY11. Thirdly, as LGU is scheduled to commercialise its Long Term Evolution (LTE) 4G network from H2FY11, the company should be increasingly capable of providing faster data transmission speeds for its smartphone subscribers. With these factors in mind, Fitch expects that LGU’s overall market share of smartphone subscribers will gradually improve to nearly 18% in the next 12 to 18 months.
Nevertheless a temporary spike in capex to KRW1.7trn in FY11 (FY10: KRW1.15trn) for the LTE roll-out means that the company’s financial leverage is not likely to improve until FY12. With a major portion of the LTE network investment (KRW0.85trn) scheduled to occur in FY11, Fitch forecasts that LGU will generate negative free cash flow (FCF) in FY11 and thus its financial leverage, measured in terms of funds from operations (FFO) adjusted net leverage, will increase to 1.6x at FYE11 from 1.5x at FYE10. Fitch views LGU’s investment in LTE as essential to strengthen its operational competitiveness, and believes the expected negative FCF generation in FY11 is therefore justifiable.
The Stable Outlook reflects Fitch’s expectation that LGU’s leverage ratio will not deteriorate significantly and the company will improve its operating margin over the medium term. However, a negative rating action could occur if LGU’s EBITDAR margin remains below 20% on a sustained basis due to excessive marketing efforts and/or slower-than-expected smartphone subscriber acquisition. Additionally, FFO adjusted net leverage sustained over 2.0x and/or two years of projected negative FCF generation could also lead to a negative rating action.
LGU provides wireless, fixed-line telephony and broadband services. As at FYE10, LGU held a 17.8% market share of wireless subscribers, a 17.6% share of broadband subscribers and an 11.6% share of fixed voice subscribers.
South Korea to launch probe into Apple location data collection
South Korea’s telecom regulator has announced that will be launching a probe into Apple to determine whether the world’s largest handset vendors (by revenue) collection of location data from iPhone and iPad devices violates privacy rules.
According to the Korea Communications Commission, it has asked Apple how often information is collected and saved, and whether users have a choice over whether it is saved or deleted. Apple must explain why such data is saved on devices and if it’s stored on the company’s servers.
The commission also stated that it will form a team to study how to better protect smartphone users’ information and privacy.
Apple has been investigated by French, German and Italian privacy regulators since analysts reported the company’s devices track and store data about the movements of iPhone and iPad users.
SK Telecom to launch LTE in July (South Korea)
SK Telecom has demonstrated 4G LTE network in South Korea at its Bundang Building’s LTE Test-bed and is planning to launch the services in July 2011.
During demonstration, the company compared speeds of 4G LTE and 3G WCDMA; showcased LTE-based 3D video streaming and high definition video content download/ streaming; and demonstrated high definition video call between two handsets, one located in a moving bus and the other in the Bundang Building.
SK Telecom plans to begin providing commercial 4G LTE services in Seoul in July this year and upgrade its LTE networks to LTE-Advanced (LTE-A), the technology standard of which is expected to be completed by June 2011. The pace of this network evolution will be flexibly implemented, taking account customers’ demand for data.
SK Telecom also plans to adopt its own cloud-based network technology named Smart Cloud Access Network (SCAN) to set up its LTE network. With SCAN, SK Telecom successfully separated Digital Unit (DU) and Radio Unit (RU), the two main components of a base station. DUs will be stored together in one area, while Remote Radio Units (RRU) – along with the antenna – will be set up in various locations, thereby enhancing network operation efficiency. Also, with full-fledged application of cloud computing technology, the network will be able to flexibly and seamlessly handle mobile data traffic that varies by time and region.
The company plans to expand its LTE coverage to 23 cities including the Seoul Metropolitan Area and other Metropolitan cities as soon as possible and provide nationwide coverage (82 cities) in 2013. Moreover, SK Telecom unveiled plans to upgrade LTE networks to LTE-A networks in 2013 to further enhance data communications speed and capacity.
KT Corp looks to sell Russian subsidiary (South Korea)
KT’s chief executive, Lee Suk-chae s stated that the company is looking to sell its 79.96% stake in Russian mobile network, New Telephone Company (NTC) in a sale which could raise around US$500 million. They are in talks to sell the business. Lee declined to comment on the potential buyer
or the size of the deal.
KT Corp brought the stake in NTC, a regional phone company based in the Primorsk region of eastern Russia back in 1997. All three of Russia’s major networks, MegaFon, VimpleCom and MTS have previously expressed interest in buying control of the company. There were reports last month that MegaFon had already secured an agreement to buy the company, but that seemed to have been premature.
