Moody's: Profits up for Korea telecoms

Moody's Investors Service said the second quarter of 2010 financial results for Korea telecommunications operators showed improved profitability on both year-over-year and quarter-over-quarter bases, supported in turn by their reductions in marketing expenses.

Such an outcome demonstrates their willingness to abide with the Korea Communication Commission's guidelines on marketing spending, Moody's said. But the actual achievement of the regulator's targets for 2010 will require a dramatic fall in such expenditure in the second half of 2010, the agency added.

Competitive pressures will merely shift from direct marketing costs into more subjective areas, such as tariff reductions, particularly for data-heavy Smartphone users, and accelerated capital expenditure for advanced data networks, Moody's said.

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