LG Uplus Q2 net halves on marketing fees

South Korea's smallest mobile carrier LG Uplus Corp. said Friday that its second-quarter operating profit plummeted 49 percent from a year ago, weighed down by higher marketing fees. Net profit stood at 35.3 billion won (US$33.5 million) in the April-June period, compared with 68.9 billion won a year earlier, it said in a regulatory filing. The bottom line came in far lower than the consensus of 69.3 billion won in a poll of analysts by Yonhap Infomax, the financial news arm of Yonhap News Agency. Sales rose 16.5 percent on-year to 2.3 trillion won as the portion of high-end smartphones increased, while operating profit tumbled 38 percent to 60.3 billion won. As its number of smartphone subscribers topped 2.1 million in the quarter, the company's marketing fees, including subsidies to handsets, increased, dragging down its bottom line. LG Uplus aims to offer long-term evolution (LTE) service nationwide in July 2012, as it bets big on the fourth-generation wireless service to close the gap with bigger rivals SK Telecom Co. and KT Corp. LG Uplus is the only mobile carrier in the country that does not offer the iPhone and iPad. It will start sales of two high-end smartphones compatible with its LTE networks in October and one LTE tablet PC before December, it said. The company forecast that it will secure more than 4 million smartphone subscribers by the end of this year, well above its target of 3.5 million subscribers. Korean mobile operators are keen on securing more smartphone buyers because they bring a fatter profit margin than subscribers of regular cell phones. South Korea's smartphone market exploded very quickly in the last year with 15 million subscribers -- about 30 percent of the company's wireless market. LG Uplus controlled about 17.7 percent of the country's mobile market as of March, according to government data. SK Telecom accounts for 50.6 percent and KT has a 31.7 percent market share.