SOUTH Korean mobile telephone company KT Freetel Co yesterday reported an eighth straight decline in quarterly profit after boosting spending on subsidies to win customers from rivals SK Telecom Co and LG Telecom Ltd.

Fourth-quarter net income fell 51 percent to 53.1 billion won (US$56 million), from 107.7 billion won a year earlier, Seoul-based KT Freetel said. Sales rose 18 percent to 1.94 trillion won.

KT Freetel increased spending on promotions to lure users to its so-called third-generation services, launched nationwide in March, that allow faster downloads of music and video in a market where about nine out of 10 people own handsets. The company plans to buy 33 percent of Malaysia's U Mobile Sdn with Japan's NTT DoCoMo Inc as growth stalls in Korea, said Bloomberg News.

"Spending this year, especially in the first half, is not likely to come down much as KT Freetel will continue to try to gain more net subscribers," said Choi Nam Kon, an analyst at Tong Yang Investment Bank in Seoul, who has a "market perform" rating on the company. "A recovery in profitability in 2008 will depend on marketing costs and capital spending plans."

KT Freetel was expected to report fourth-quarter net income of 62.9 billion won and revenue of 1.83 trillion won, said a median of eight analysts surveyed by Bloomberg News.