LG Telecom Ltd., South Korea’s smallest mobile-phone operator, said the nation’s three carriers should refrain from spending too much on promotional expenses.

“We should avoid competition where we spend excessively on marketing,” Lee Sang Chul, LG Telecom chief executive officer, said in a statement today. Lee was appointed as the head of the company at a board meeting yesterday.

LG Telecom merged with LG Dacom Corp. and LG Powercom Corp. last year to create a company with annual sales of about 8 trillion won ($7 billion). The Seoul-based company is seeking to step up competition against KT Corp. and SK Telecom Co. by luring customers to products that bundle high-speed Internet with wireless and fixed-line phone services.

“The company will be able to cut overlapping costs in marketing and network investment,” Yang Jong In, an analyst at Korea Investment & Securities Co., wrote in a report today.

LG Telecom has said it expects the combination with its affiliates to help it pare costs, including marketing expenses, by as much as 2 percent of revenue in 2014.

LG Telecom’s third-quarter marketing spending, which includes expenses for advertising and subsidizing users’ handset payments, rose 25 percent, while SK Telecom’s spending increased 15 percent in the period.

South Korea’s telecommunications industry has undergone consolidation in the past two years as operators attempt to cut costs in a market where more than 90 percent of people already own a mobile phone and nine out of 10 homes have broadband Internet connections. KT, Korea’s largest phone and Internet company, bought out wireless unit KT Freetel Co. last year, while SK Telecom acquired SK Broadband Co. in 2008.

Source:Bloomberg