[Foreign Language] Good Morning. I am Youngwoo Kim, KT’s IRO. Let us begin our Q1 2017 earnings release. Today’s earnings presentation will be conducted in an offline setting but is also being webcast real-time via our website, and recordings will be also available. After the presentation, we will only take questions from the floor and not through the conference call. [Foreign Language] Please note that KT has been releasing its consolidated numbers under the IFRS standard since the first quarter of 2011. We will begin with our CFO, Kwang-Suk Shin’s opening remarks, and then move on to Q1 2017 performance results.

[Foreign Language] Good morning. I am Kwang-Suk Shin, KT’s CFO. Thank you for joining our earnings release despite the early hour. In the first quarter, based on stronger core competitiveness and cost-efficient marketing, KT was able to upgrade its capacity to generate profit compared to the previous year. Group affiliates also displayed sound performance, driving both revenue and operating profit growth in the first quarter for 2 consecutive years. [Foreign Language] First, on the wireless business, by acquiring subscribers in new segments, such as in second device, we recorded the highest MNO net addition ever. [Foreign Language] For the fixed line business, our growth continues, underpinned by KT GiGA Internet, which is unrivaled by any peers in terms of quality and brand awareness. For the IPTV, by broadening the base of high-quality subscribers and with growth in platform revenue, we continue to grow as we lead to the domestic media market. [Foreign Language] There was 400,000 GiGA Internet subscriber net addition as of end of Q1 as we reached to 2.8 million subscribers, which is more than 33% of the company’s total Internet subscribers. IPTV also recorded subscriber net adds of 120,000 in Q1. In light of the current trends in GiGA Internet subscriber expansion and customer preferences, we expect a smooth ride towards achieving this year’s target of 3.5 million subscribers by the end of the year. [Foreign Language] Let me now move on to Q1 earnings results. [Foreign Language] Q1 operating revenue was up 1.8% year-over-year, recording KRW 5,611,700,000,000 on growth in merchandise and service revenue. Operating profit was up 8.3% year-over-year coming in at KRW 417 billion. Despite changes in accounting standards and impact from the THAAD missile defense system, which drove down performance of some of our affiliates, we were able to upgrade our profit-generating capacity…

[Foreign Language] I’m Daishin Securities. I would like to you ask a question. If you look at your top line from your fixed line business, we’ve seen year-over-year decline but a Q-o-Q increase. Is this a sign of any structural change? Second question, you’ve mentioned that you would be focused on bringing about qualitative growth and profitability growth in your media business. Can you provide some color as to what your forecast is in terms of profitability in these businesses?

[Foreign Language] So your question had to do about the Q-o-Q increase in terms of the fixed line revenue. The Q1 telephony revenue actually went up 1.1% Q-o-Q due to the impact from the settlement revenue coming in from the international traffic. But the revenue from international traffic shows high quarterly volatility, so it’s too early to come to the conclusion that fixed line revenue erosion has structurally slowed. [Foreign Language] Our forecast of low KRW 200 billion revenue erosion still stands, and when we feel convinced that, that decline is slowing, we will communicate that to the market. [Foreign Language] Your next question had to do with our profitability target for IPTV and our mid- to long-term forecast. IPTV is expected to generate annual profits starting this year, driven by platform revenue and basic fee growth and based on our efforts in managing our profitability. Although I cannot offer a specific profit target, as we see continuous profitability improvement, we expect operating margin to reach around the typical level, which will be around 6% to 7% for a telecom business, at the earliest, this year or next year by latest. [Foreign Language] IPTV is a core foundation for our media platform business, and based on our unrivaled subscriber base and new platforms of AI and VR, we plan to grow the platform revenue. Also, by improving subscriber quality and achieving innovative cost efficiencies such as – from content, we expect profitability improvement to continue. [Foreign Language] And if platform revenue is to grow continuously based on IPTV’s competitive edge, we believe we can gain capacity to generate profit far better than the existing SOs.

[Foreign Language] I’m from Korea Investment & Securities. I would like ask 2 questions. We see recently there’s been a sudden increase in data traffic per subscribers. I would like to understand whether this would lead to trading up of the tariff plan for the subscribers, and would that drive ARPU growth? Second question, BC Card recently have come under the impact relating to the THAAD missile defense deployment in Korea. Could you provide some color as to what the top line and operating profit is – looks like from UnionPay for your subsidiary, BC Card?

[Foreign Language] So your question was on whether the increase in data traffic is going to drive ARPU growth. If you look at data usage per subscriber, it is growing continuously based on the differentiated data base services such as GiGA LTE and greater use of multimedia service such as Gini music and OTM. And in Q1, data traffic per user recorded 6 gigabytes. In line with the growth and the data traffic, we see an upward trend in subscribers taking out high-end rate plans with a share of those subscribers increasing as well against the total base. [Foreign Language] And based on such trend, we expect wireless service revenue to sustain its growth, and as communicated at the beginning of the year, we are expecting above 2% year-over-year growth. [Foreign Language] However, in light of the growing number of second device and IoT circuits and inflow of low ARPU subscribers from customer segmentation, it’s expected to be difficult to continue the ARPU growth trend. We are trying to select a new matrix to carve out the impact of second device and IoT lines, but it’s not yet decided. We will communicate when the decision is made. [Foreign Language] Your second question had to do with the impact we’re getting from China UnionPay. Now any revenue or profit related to UnionPay is subject to confidentiality undertakings, so we cannot make any disclosures, but I can say that profit contribution is higher than top line contribution. [Foreign Language] Although I cannot give you an exact acquiring volume impact related to UnionPay, we estimate there to be a similar amount of downward impact on BC Cards OP as we saw in the wake of the MERS epidemic, which was around KRW 6 billion. We will have to wait and see the extent of the decline in the acquiring volume, but for now, we plan to minimize the impact through growing revenue from other areas and through cost efficiencies that we can still – so that we can still meet the year-end target. [Foreign Language] Considering that BC Card contribution to the group is quite significant, it may not be all that easy to meet KRW 400 billion operating profit target at the group level. However, having said that, we will endeavor to meet this KRW 400 billion OP target through better performance from our affiliates like the KT Estate, which is seeing growing property sales revenue and Nasmedia, where we see growth in digital broadcasting and mobile app.

[Foreign Language] I’m from CLSA. I’m [indiscernible] I have two questions. First has to do with your marketing spend. With the launch of the S8, which is being welcomed by the market, there’s some concern in the market that it may trigger some overheating of competition. I would like to understand what your strategy is or how you view the market in terms of your marketing spend for the coming period. And also in the second half of the year, there’s an iPhone to be launched. And we hear that there’s quite a bit of standby demand. Can you maybe provide some color as to what this will – the impact it will have on your overall marketing spend? Second question, your wireless revenue on a year-over-year basis has recorded a – wireless service revenue has come down. What is – and you still have mentioned that you will try to keep it within the guidance level. Are there any strategies or drivers that you’ve identified to bring about a further growth of this top line? If so, can you please explain?

[Foreign Language] Your first question had to do with our marketing spend relate – spend-related strategies as in the wake of the Galaxy S8 launch and also some of the forecast for the second half of the year. With the launch of Galaxy S8, which is a flagship handset, market can expand temporarily in Q2. And we believe consumer reaction is also quite very positive, as seen from the standby demand and the fact that the device is also well executed. KT will also use Galaxy S8 quite aggressively to attract its premiums subscribers. [Foreign Language] But compared to the past, market volatility has subdued and regulatory authority is tightly monitoring for signs of overheating in the market. And people usually select tariff discount plans for premium handsets, so there doesn’t seem to be high probability of overheating of competition. And we are going to control G&A within KRW 2.5 trillion guidance through efficient marketing as well. [Foreign Language] I believe we have proven our capacity to generate stable bottom line, as can be seen from the first quarter, where we posted OP of about – above KRW 400 billion despite changes in accounting standards and external issues. By achieving stable results in the remaining time, we will do our best to bring profitable enhancements on a year-over-year basis – profitability enhancements on a year-over-year basis. [Foreign Language] Wireless business is growing both in terms of volume and quality, driven by MNO subscriber net adds and trading-up of subscribers based on data. But in terms of revenue, there was Q-o-Q and year-over-year decline temporarily because of seasonality in the first quarter and accounting standard changes that excluded the handset issuance sales. [Foreign Language] But if you take out the impact from accounting changes, there was 1.6% year-over-year growth, meaning, top line growth is being sustained, supported by our subscriber quality improvement and broadening of subscriber base. From the second quarter, with no seasonality and new flagship handset, which will lead to high-quality subscriber growth, we expect service revenue to rebound, and we will do our best to achieve 2% growth target.

[Foreign Language] With no further questions, we would like to now close the Q&A session. Once again, thank you very much for joining us. We would like to now close our earnings release and presentation for Q1 2017. Thank you.