LG HelloVision continues to face significant challenges in revitalizing its mobile virtual network operator business. Despite a broader expansion in South Korea’s budget mobile market, the company reported minimal growth in both subscriber numbers and revenue. For the fiscal year 2022, LG HelloVision’s budget mobile revenue reached 156.7 billion won (approximately $118 million), a marginal increase from 156.1 billion won (around $117 million) the previous year, reflecting a rise of just 0.4%.
Subscriber Growth Remains Stagnant
The budget mobile segment, which accounts for about 10% of LG HelloVision’s total sales, has not experienced significant subscriber growth. The company announced that its subscriber base, including internet-of-things lines, totaled approximately 770,000 in the first half of last year, an increase of only 20,000 from the same period a year prior. Industry analysts noted that LG HelloVision has not capitalized on the increased demand for number transfers following a significant hacking incident in the telecommunications sector last year.
In response to this incident, South Korea’s three major wireless carriers launched aggressive marketing strategies to attract new subscribers, effectively diminishing the potential benefits for smaller operators like LG HelloVision. LG Uplus, the parent company of LG HelloVision, reported around 21.7 million mobile subscribers, marking a 6.6% increase from approximately 20.4 million the previous year. Mobile service revenue for LG Uplus rose to 6.67 trillion won (about $5.01 billion), up from 6.43 trillion won (around $4.83 billion).
Challenges and Future Strategies
According to industry officials, LG Uplus appeared less impacted by the fallout from the hacking incident, attracting a substantial share of the switching demand through its strong marketing efforts. Analysts have also pointed to LG HelloVision’s conservative approach to new pricing plans and promotional strategies as contributing factors to its ongoing struggles. The company has encountered profitability pressures while its core pay television business has stagnated. Operating profit has decreased from the 40 billion won range in 2021 to around 10 billion won in the past two years.
In a bid to stimulate subscriber growth, LG HelloVision plans to launch a new promotion coinciding with the release of Samsung Electronics’ Galaxy S26 smartphone series next week. Customers purchasing a Galaxy S26 device and subscribing to one of LG HelloVision’s mobile plans will receive a 30,000 won (approximately $23) gift certificate. Additionally, subscribers to its Coupon Pack plan will be eligible for extra coupons valued at 120,000 won (about $90).
To enhance user experience, LG HelloVision has introduced artificial intelligence features on its website, allowing potential customers to input their preferences and receive customized plan recommendations along with summaries of customer reviews. Despite these efforts, analysts remain skeptical about LG HelloVision’s ability to compete with the dominant three wireless carriers, especially as another wave of substantial smartphone subsidies is anticipated this year, driven in part by competitors like KT.
Given the current dynamics of the budget mobile market, experts suggest that LG HelloVision may need to adopt more aggressive low-cost promotional strategies and develop specialized offerings tailored to specific customer demographics to regain traction.
