Citing both strategic and operational challenges, Hanaro Telecom reported that Q1 revenues decreased by 5.6% to KRW 329.1 billion (US$ 262.3 million) compared to the prior quarter. Hanaro recorded an operating loss amounting to KRW 6.4 billion for the quarter, following two consecutive quarters of profits. Some highlights:
The decline in revenue was attributed to a slowdown of subscriber growth since Q4 2002, and a relatively high monthly average churn rate of 2.9% during the first quarter.
In order to combat “an extremely comptetive” broadband environment, Hanaro is adopting a number of measures, including elevated salesperson performance incentives, increases in long-term contracts with disincentive termination penalties, and a differentiating focus on service.
The total broadband subscriber base at the end of 1Q03 was 2,973,921, representing an increase of 3.3% over Q4 2002. (figures listed below)
Approximately 40% of the VDSL subscribers are former Hanaro ADSL subscribers.
Broadband access services (cable modem, ADSL, VDSL, LMDS and WLAN) together accounted for 73% of oveall revenues, while voice services represented 17%, leased lines 6% and Internet data centers 2%.
CAPEX for Q1 decreased by 33.1% to KRW 70.0 billion from KRW 104.7 billion in Q4 2002. Further reductions in CAPEX are planned.
Following the recent resignation of its CEO, Hanaro Telecom has launched a major restructuring aimed at cost cutting. A new CEO is expected to be named before July.
http://www.hanaro.com
