[Weekly Signal] SKT and LGU+ Q3 Operating Profit Seen Rising, KT Expected to Dip Slightly

Over the past week in the telecom industry, major news and this week’s key schedules were introduced together. The topic of the article was rising operating profit for SKT and LGU+ in the third quarter, with KT expected to post a slight decline. Earnings releases and news about the outlook and partnerships of global equipment companies were also reported.

SK Telecom and LG Uplus are expected to report higher operating profit in the third quarter of this year compared with the same period last year. The companies are also expanding their AI data center businesses. KT, meanwhile, is forecast to see a slight decline in third-quarter operating profit.

SK Telecom’s third-quarter consolidated revenue for this year came to KRW 4.4973 trillion, while consolidated operating profit reached KRW 552.3 billion. Revenue rose 13.1% from a year earlier, and operating profit increased 1040.3% year over year. SK Telecom said revenue rose on the back of growth in its wireline and wireless telecom businesses.

SK Telecom also said wireless business revenue is gradually recovering as it shifts its marketing strategy to focus on customer lifetime value (LTV). In relation to its AI data center business, SK Telecom launched SK Hyper in July and SK Horizon in August. Through these moves, it established a framework for advancing its AI data center business.

SK Telecom said it plans to actively attract outside investment for its AI data center business. Among global equipment companies, Nokia projected that global network traffic in 2035 will be 4 times the 2026 level. Ericsson and Verizon expanded AI-based automation in RAN operations.

LG Uplus’s third-quarter consolidated operating revenue came to KRW 3.9813 trillion, down 0.7% from a year earlier, while third-quarter operating profit rose 84.1% year over year to KRW 297.6 billion. However, LG Uplus’s third-quarter operating profit fell 13.6% from KRW 344.5 billion in the second quarter. Factors behind the year-over-year increase in operating profit included a base effect from one-off labor costs last year and cost efficiency gains. LG Uplus’s AI data center revenue rose 27.7% from a year earlier, driven by growth in the colocation business and the DBO business.

KT is scheduled to announce its third-quarter earnings on the 10th. SK Securities estimated KT’s third-quarter operating revenue at about KRW 7 trillion, down 1.8% from a year earlier. SK Securities estimated KT’s third-quarter operating profit at KRW 514.6 billion, down 4.4% year over year and below the market consensus of KRW 539.6 billion. SK Securities also forecast that KT’s wireless revenue would fall 3.1% from a year earlier, citing the impact of the customer appreciation program that ran through last July.

Nokia released its "Global Network Traffic Report." The report said the expansion of AI-connected devices is changing the nature of telecom demand that networks must handle, including demand from devices connected in addition to people. It said the increase in AI agents capable of autonomous task execution and the rise in network-connected devices are driving this shift, and that the spread of AI is also increasing uplink demand and the need for faster response times.

In particular, the report pointed out that networks designed around downloads now face additional requirements to expand upload capacity and support real-time responses. Physical AI applications that interact with the surrounding environment, such as robots and vehicles, already exist, and their projected share of uplink traffic in 2035 was put at more than 90% of total traffic. The report also said the need to process data at points close to users and devices is expected to increase accordingly.

The report projected that global network traffic in 2035 will approach 3,789 exabytes (EB) per month, about 4 times the 2026 level. It also projected that AI will account for 44% of total traffic in 2035, close to half. Nokia explained that global traffic in 2035 will be 4 times the 2026 level and that AI will make up 44%.

Current traffic volumes are small. However, the projected agentic AI traffic for 2035 is 160 times the 2026 level, and projected physical AI traffic for 2035 is 105 times the 2026 level.

As an example of network automation responding to this growth, the collaboration between U.S. carrier Verizon and Ericsson was cited. Verizon is pursuing expansion of AI-RAN. RAN refers to the segment that connects devices such as smartphones to the network via base stations.

Verizon plans to introduce Ericcson Intelligent Controller (EIC) across the United States this year. It also plans to deploy rApp, an automation app within the EIC platform for network condition analysis and configuration optimization. The two companies said they use AI in live networks to adjust base-station radio coverage and redistribute traffic in congested areas. As a result, they said data throughput and network operating efficiency improved.

Verizon also has its own in-house rApp. The rApp has a function that enables switching from an LTE network to a 5G standalone (SA) network for FWA terminal connections. FWA is a method of providing internet to fixed locations such as homes and businesses over a mobile network instead of a wired line.

Verizon plans to test and deploy an rApp for detecting anomalies in base stations and analyzing their causes.

Industry events are scheduled for this week in the telecom sector.

The AI-RAN Alliance is scheduled to hold "AI-RAN Summit 2026" on November 9-10.

There is also an earnings announcement schedule. KT is scheduled to hold a conference call for its third-quarter 2026 earnings release on November 10 at 15:00.

There are also attendance plans related to a National Assembly standing committee. Kim Jong-cheol, chair of the Broadcasting and Media Communications Commission (방미통위), is scheduled to attend the Budget and Accounts Subcommittee of the Science, ICT, Broadcasting and Communications Committee (과방위 예결위) on November 10 at 10:00.

The chair and vice chair of the Broadcasting and Media Communications Commission are scheduled to attend the plenary session of the Science, ICT, Broadcasting and Communications Committee on November 13 at 14:00.

Source: IT DAILY · Seong Won-young
Original: https://www.itdaily.kr/news/articleView.html?idxno=242773

References

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