Its operating profit dipped 37.9 percent on-year to 191.1 billion won, while sales rose 6.4 percent to 4.5 trillion won in the three-month period, the firm said in a financial statement.

KT attributed its weak quarterly results to increased spending and marketing costs for its 5G service since its launch in early April.

"Although the 5G service expanded overall sales since its launch in April, increased investment in the 5G network and marketing reduced profits," KT said in a release.

Its wireless division's revenue edged down 0.5 percent on-year to 1.7 trillion won in the three-month period, while sales from its media content business jumped 15.9 percent to 68.9 billion won on the back of robust growth in IPTV subscribers.

The carrier said it had built 45,339 5G base stations as of the end of July, vowing to expand national coverage to improve the quality of the ultra-fast network and attract more customers.

KT said it had 420,000 5G customers by the end June, below SK Telecom's 530,000. 

The company said it will explore ways to integrate its 5G service in various sectors, including manufacturing, media, finance and gaming, while stepping up collaboration with 14 automotive brands on in-vehicle infotainment platforms to boost profits.

"5G subscribers are expected to account for 10 percent of the total handset users this year and reach some 30 percent by 2020," Yoon Kyung-keun, chief financial officer of KT, said in a conference call.

"While the wireless division is expected to post improved revenue thanks to the 5G service, this year's operating profit is predicted to be lower than last year due to higher marketing costs and fierce competition in the market."

Shares of KT retreated 2.33 percent to 27,250 won on the Seoul bourse Wednesday, compared with the KOSPI's 0.41 percent fall. (Yonhap)