Mobile operators in Korea plan to cut capital expenditures (CAPEX) from 10% to 29% year over year in 2009 since the massive investment for the 3G network is almost completed.

The leading mobile carrier SK Telecom reportedly will reduce its investment-revenue ratio from 17% to 12-13%. Since SK Telecom's CAPEX this year was 1,970 billion Kwon, the company's investment for next year should be around 1,400 billion Kwon.

KTF, the second-largest wireless operator, may invest 850 billion Kwon, a decrease of 10.5% YoY.  The smallest mobile carrier, LG Telecom may reduce its CAPEX nearly 29% to 500 billion Kwon.

Kyobo Investment Securities, a local financial firm, said in a recent report that cutting the CAPEX will reduce the mobile operators' depreciation costs and boost carriers' profits next year.

The financial firm expects mobile carriers to shrink from 4G investments until making its money back from 3G investments. Even though the 4G standard will be set by 2011, mobile carriers may be reluctant to deploy the 4G network early, the report adds.

Meanwhile, KTF plans to finish its CDMA to WCDMA network migration by 2011. The CDMA operator LG Telecom recently announced it will adopt LTE as a 4G standard.

Source:telecomskorea