SK Telecom (NYSE:SKM) today announced its earnings on a K-IFRS consolidated basis for the first quarter of 2017: revenue of KRW 4.234 trillion, operating income of KRW 410.5 billion and net income of KRW 583.5 billion.

The revenue edged up 0.1% year-on-year (YoY) backed by factors including the growth of LTE subscribers and mobile data usage, as well as improved performance of its subsidiaries. The operating income increased by 2.1% YoY affected by improved profitability of its subsidiaries and winning of the lawsuit regarding interconnection fees. The net income grew by 2.0% YoY due to increased equity method gain from SK Hynix. 

Despite revenue-decreasing factors, including the increased number of subscribers who choose contract-based mobile fee discounts, elimination of sign-up fees, and reduction of interconnection fees, SK Telecom’s mobile network operation business sustained its steady performance backed by the growth of its LTE subscribers and mobile data usage per user. 

As of the end of March 2017, the number of SK Telecom’s LTE subscribers marked 21.65 million, representing a 10.9% YoY growth and taking up 72.6% of the company’s total mobile subscriber base of 29.83 million. 

SK Telecom is providing its customers with services tailored to their needs as well as strengthened benefits by introducing customized price plans like ‘T Signature’ and ‘Band Play Pack,’ and reinforcing its device lineup by launching ‘Sol Prime’, A5’ and ‘X300.’

As a result of these efforts, the churn rate - a figure which shows the level of satisfaction of the existing customers - stood at 1.5%, staying around 1% for eight consecutive quarters. In addition, recognized for its outstanding service quality, SK Telecom has ranked at the top of the NCSI (National Customer Satisfaction Index) for 20 years in a row.  

SK Telecom is also achieving meaningful results in the new business areas. The sales of SK Telecom’s Artificial Intelligence (AI) platform ‘NUGU’ continued to increase in the first quarter. The company has recently added more features to NUGU to enable users to order products from ‘11st’ and receive alerts for professional baseball games.  

While strengthening the technological competitiveness and value of its AI business by working closely with affiliate companies including SK C&C, SK Telecom will also focus on building a New ICT ecosystem around its AI platform through collaboration with startups and ventures based on an open API approach. Its strategy is to develop and launch differentiated, customized products and services by analyzing vast amount of data generated from its main business areas - including mobile network, media, IoT and commerce - with its AI technologies. 

SK Telecom’s consolidated subsidiaries have also posted improved results in the first quarter of this year. The number of SK Broadband’s IPTV subscribers grew 12.2% YoY to stand at 4.07 million and the IPTV revenue has increased by 21.7% YoY to KRW 235.6 billion. Moreover, SK Planet, which has transformed into a commerce platform company through business restructuring last year, has recorded reduced losses in the first quarter.

“SK Telecom has sustained steady performance in the mobile network operations business and achieved improved results compared to the same period last year backed by improved profitability of its subsidiaries,” said Ryu Young-sang, CFO of SK Telecom. “This year, SK Telecom will not only strengthen its leadership in the mobile telecommunications market but will also generate tangible results in the New ICT area.”

※ The conference call in regard to SK Telecom’s 2017 1Q earnings results can be heard via SK Telecom’s webpage on Wednesday April 26, from 3:00 P.M. Seoul Time.

* Attachment 1 : Summary and Comparison of Consolidated Income Statement

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* Attachment 2 : Summary of Separate Income Statement 

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※  All business performance figures are based on Korean International Financial Reporting Standards (K-IFRS).