The logo of SK Telecom is seen in front of its headquarters in Seoul. Yonhap

By Lee Min-hyung

Telecom stocks are drawing attention due to their potential for an earnings rebound in 2023, after major mobile carriers suffered severe stock price falls last year.

According to data from market tracker FnGuide, the combined operating profit of Korea's top three mobile carriers ― SK Telecom, KT and LG Uplus ― is forecast to rise by 7.43 percent in 2023 from the previous year on hopes of sales growth and falling marketing costs.

Shares of SK Telecom, the largest telecom company here, reached a high of around 63,000 won ($49.50) in April, but have since been on a steep decline. SK Telecom shares closed at 47,300 won on Thursday. KT shares also reached about 38,000 won by early last December, but then went on a losing streak to around 33,700 won as of closing on Thursday.

But analysts shared a rosy outlook on their potential rebound this year.

"KT shares have been in the doldrums on their weak earnings forecast in the fourth quarter," Hana Securities analyst Kim Hong-sik said. But investors are advised to pay attention to the stock, as its valuation is expected to recover this year on hopes for an aggressive dividend policy and the reform of its governance structure, according to the analyst.

Most telecom stocks suffered dismal performances in the latter half of 2022 due to weaker-than-expected earnings results. But most brokerage houses expected their earnings to bounce back gradually in 2023, as the number of fifth-generation (5G) network subscribers will be on the rise.