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LG Uplus Q3 net falls 32 per cent on 5G investment

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LG Uplus Corp., South Korea’s No. 3 mobile carrier, has said its net profit dropped 32.1 per cent in the third quarter (Q3) from a year earlier due to increased spending for 5G infrastructure buildup and marketing.

Net profit stood at 104.5 billion won or $89.5 million in the July-September period, compared with 153.8 billion won a year ago, LG Uplus said in a regulatory filing, Yonhap news agency reported on Friday.

Third-quarter sales rose 8.4 per cent on-year to 3.2 trillion won, and operating profit decreased 31.7 per cent to 155.9 billion won over the three-month period, the firm said.

LG Uplus said it’s profits decreased, despite solid sales, due to increased marketing costs and continued investment for 5G networks that rolled out in early April.

The company’s marketing spending soared 17.5 percent on-year to 586.1 billion won in the third quarter, as it carried out aggressive campaigns for 5G service. Its capital spending skyrocketed 169.4 per cent to 784.4 billion won over the period in line with the construction of 5G base stations.

LG Uplus said revenue from its mainstay mobile business gained 3.5 per cent to 1.4 trillion won in the third quarter, thanks to an increased number of 5G subscribers.

The company said it had about 875,000 5G users as of September, which accounted for 5.9 per cent of its total mobile subscribers.

Sales from its smart home division surged 3.2 per cent to 995 billion won, led by robust IPTV and high-speed internet business.

The number of its IPTV subscribers jumped 11.5 per cent on-year to 4.4 million in the third quarter, and that of high-speed internet users grew 5.4 per cent to 4.2 million, it noted.

LG Uplus said it will speed up building 5G base stations across the nation to improve the quality of the network and boost premium service users, and that it will create new revenue streams with various services for enterprise users, including connected cars and smart factories.

The company said it expects to have about 1.5 million 5G users by year-end, about 10 percent of the total mobile subscribers.

“If Apple launches 5G smartphones and the network quality improves next year, the number of 5G users could rise to 30 percent of the total by the end of 2020,” Lee Hyuk-joo, the firm’s chief financial officer, said during a conference call.

The company said the capital expenditure for 2020 will be similar to this year as it plans to expand 5G coverage beyond the Seoul metropolitan area.

Shares of LG Uplus fell 1.86 per cent to 13,200 won on the Seoul bourse, hovering below KOSPI’s 0.8 per cent gain. The earnings report was released before the market closure.

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Business

Jio surpassed BSNL to become the country’s largest fixed broadband provider

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JioFiber added 0.19 million subscribers to become the number 1 operator in the fixed broadband segment in just about two years from commercial launch, with 4.34mn FBB subs.

JioFiber’s market share improved 85bp month on month to 16.9 per cent (launched commercially in Sep-19), Nomura said in a report.

Bharti added 0.1mn subs to reach 4.08mn FBB subs (up 68% since May-20), with market share up 60bp m-m to 15.9 per cent.

Bharat Sanchar Nigam Limited’s (BSNL) market share further declined by 185 bp to 16.4 per cent share (vs 44 per cent pre-JioFiber launch in September’19), the report said.

Without significant fund-raising, Vodafone Idea’s network investments and 5G rollout would likely remain constrained, at least in the near term. Hence, we expect market share gains to continue for Bharti and R-Jio, the report said.

TRAI data for November shows a slight improvement in industry numbers, with Jio gaining market share at the expense of VIL, UBS said in a report.

After a large decline in September (driven by the 19mn subscriber loss reported by Jio) and flattish numbers in October, the industry witnessed a slight improvement in November, with overall subscriber base expanding by 1.2mn. Bharti gained 1.3mn subs (-0.5mn in Oct), Jio added 2mn subs (+1.8mn in Oct), while VIL continued to lose market share: it lost 1.9mn subs (versus loss of 1mn and 1.1mn in Oct and Sept respectively).

Jio remains the market leader, with a subscriber market share (SMS) of 36.7 per cent (+10bps). Bharti and VIL ended Nov with SMS of 30.4 per cent (flat MoM) and 22.9 per cent (down 20bps) respectively. It is important to note that the tariff hikes were largely applicable from end-November / December, and therefore, December is likely to see some churn, UBS said.

In fixed broadband, Jio surpassed BSNL to become the country’s largest FBB provider. Jio now has 4.3mn FBB subs (+0.2mn in Nov), followed by BSNL with 4.2mn subs (-0.5mn in Nov) and Airtel with 4.1mn subs (+0.1mn in Nov).

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Business

FoodTech platform Pluckk raises $ 5 mn seed capital from Exponentia Ventures

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 Fresh produce food-tech venture, PLUCKK (A brand owned by Fruveggiie Tech Pvt limited) has raised $ 5 million seed capital in a funding round, from Exponentia Ventures, a fund focussed on emerging business ideas in both B2C and B2B space.

Founded in 2021, by Pratik Gupta, Pluckk aims to build India’s first digital commerce business to serve the growing demand of lifestyle-oriented fresh produce. The company’s proposition is centered on global food trends ranging from vegan, carb alternatives, gut health, immunity to plant-forward eating to prevent diabetes and mental health.

This round of funding will be utilised towards building the right team, technology, farm to fork infrastructure, customer acquisition and expansion into key metro cities. A part of this fund will also be utilised to acquire Indus Fresh — an existing player in the fresh FnV category serving both B2C and B2B customers like Flipkart, Amazon, Swiggy, Dunzo and Zepto.

Pratik Gupta, CEO and Co-Founder, PLUCKK, said “The biggest consumer revolution we are witnessing today is that consumers not only want to enjoy eating but are also increasingly very careful on what they eat. Pluckk aims to be the brand of choice by providing the widest curated range of such lifestyle-oriented fresh produce. At the core Pluckk will work with farmers through its bespoke win-win program that focuses on farm practices to ensure residue free and traceable produce.”

With this fresh funding, the products and services of PLUCKK will now also be made available to a wider set of consumers in key metro cities such as Bangalore & Mumbai (further expansion plans to Gurugram, Pune, Hyderabad) on its direct-to-consumer (D2C) platform as well as through leading ecommerce platforms under its brand name.

On the firm’s third investment, Alok Gupta, Partner, Exponentia Ventures, said, “Our commitment continues to invest in ideas that connect with the emerging ecosystem. In Pluckk, we find an agile business team with execution focus and leveraging a deep customer insight which can scale to millions of customers.”

The Indian online grocery market size is currently valued at USD 4 billion growing at a compound annual growth rate (CAGR) of 37% and is expected to grow 10X touching USD40 bn in the next 7 years. Of the total grocery market, fruits and vegetables account for 15-20 per cent of the market size, Pluckk aims to gain a higher single-digit share of this market in the next 3-5 years.

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Business

Equities extend losses; Sensex down 380 points in early trade

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 The 30-scrip Sensitive Index (Sensex) and broader 50-scrip Nifty on the National Stock Exchange extended their losses from the previous session and traded in the red on Wednesday.

At 10.30 a.m., Sensex traded at 60,368 points, down 0.6 per cent from the previous close of 60,75 points. It opened at 60,845 points.

Nifty traded at 18,013 points, down 0.6 per cent from the previous close of 18,113 points. It opened at 18,129 points.

Asian Paints, Ultratech Cement, Adani Ports, Tata Consumers, and Shree Cement were some of the top losers, NSE data showed.

Top gainers during the early trade were ONGC, Coal India, UPL, Tata Steel, and Bajaj Auto.

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