November 9, 2010 / 12:36 AM / 9 years ago

UPDATE 1-KT Q3 profit rises 44 pct on iPhone, cost cuts

* Q3 operating profit 595 bln won, vs 568 bln fcast

* KT starts to receive pre-orders for Apple’s iPad tablet

* iPhone, iPad marketing costs weigh

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SEOUL, Nov 9 (Reuters) - KT (030200.KS), South Korea’s No.2 mobile operator, on Tuesday reported a 44 percent rise in quarterly operating profit, as solid growth in iPhone subscribers lifted sales and its labour restructuring last year helped cut costs.

But its profit was almost unchanged from the preceding quarter as the launch of Apple’s (AAPL.O) iPhone 4 in September fueled tough competition in the saturated South Korean market.

A government move to cap handset subsidies should ease the stiff price competition in the fourth quarter, analysts say.

South Korean telecom operators who are struggling to grow revenues in the saturated domestic market are making big bets on smartphones to boost wireless data revenue even though that increases competition and marketing spending in the short term.

KT said the number of its smartphone subscribers surpassed 2 million as of the end of October, thanks to the popularity of the iPhone. The carrier expects smartphone subcribers to represent more than 30 percent of its total subscribers by the end of 2011.

On Tuesday, KT will also start to receive pre-orders for Apple’s iPad tablet PC, to challenge Samsung’s Galaxy Tab, which will be sold by its bigger rival SK Telecom (017670.KS) from the same month.

KT, South Korea’s top fixed-line carrier that merged with its mobile unit KTF in June last year, posted a 595 billion won ($533.6 million) operating profit in the third quarter ended in September, above a consensus forecast of 568 billion won from Thomson Reuters I/B/E/S.

The result compares with a year-ago operating profit of 413 billion won and a quarter-ago profit of 601 billion won.

Third-quarter sales reached 5.2 trillion won, while net profit came in at 351 billion won.

KT shares rose 1.12 percent as of 0014 GMT in a wider market .KS11 down 0.09 percent.

Reporting by Hyunjoo Jin; Editing by David Chance

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