content area
Press Release
Operating income of KRW 611.3 billion was realized on total sales of KRW 2.4 trillion. Operating income and total sales increased 32% and 2% respectively over the 2nd quarter of 2004.
Wireless Internet service sales recorded KRW 470.3 billion, a 13% increase over the 2nd quarter of 2004
a decrease in marketing expenses following the stabilization of the mobile number portability market was the main reason for the favorable business results
October 28th, SK Telecom announced its business results for the 3rd quarter of 2004. The results have demonstrated steady growth in spite of an unfavorable business environment that included a lowering of service rates, 40 day suspension of sales activity, and slow-down of domestic consumption and overall business activity.
SK Telecom achieved an operating income of KRW 611.3 billion and total sales of KRW 2.4 trillion for the 3rd quarter of 2004. Operating income and total sales increased 32% and 2% respectively over the 2nd quarter of 2004. In addition, the EBITDA margin came to KRW 1.4 trillion, 20% above the 2nd quarter results. In addition, total sales increased 1% over the same period of 2003. This demonstrates the company’s steady growth despite sales reduction factors that included lowering service rates in September, as well as an adjustment of interconnection revenue rates.
The increase in the company’s total sales can be attributed to the remarkable growth rate in wireless Internet sales, and the ceaseless efforts to improve our subscriber base. Due to the expansion of high-function handset market penetration caused by the ’June service’, and constant growth of new service areas such as ’Mobile Cyworld’, the sales for wireless Internet service came to KRW 470.3 billion. These were 13% and 39% increases over the 2nd quarter of 2004 and the second quarter of 2003, respectively. This represented 21.2% of the company’s overall sales revenue when interconnection revenues are not included.
The company’s operating income increased 32% over the KRW 462.7 billion recorded in the 2nd quarter of 2004. However, it decreased 25% over the KRW 820.1 billion recorded in the 3rd quarter of 2003.
SK Telecom’s self-regulation policy regarding market share and clean marketing approaches led to the reduction of expenses, and the steep increase in operating income in the 3rd quarter. Marketing expenses for the 3rd quarter totaled KRW 435.7 billion, a 24% decrease from the KRW 575.0 billion recorded in the 2nd quarter of 2004. However, marketing expenses increased due to the introduction of the Mobile Number Portability system, and general expenses also increased due to the adjustment of interconnection revenue rates. These are the primary factors that explain the decrease in operating income for the 3rd quarter of 2004, when compared to the same period in 2003.
The monthly average revenue per user (ARPU) rose 1% to 43,343 won over the 2nd quarter of 2004. However, it decreased 3% over the same period in 2003 due to the lowering of Calling Number Identification service rates, the adjustment of interconnection revenue rates, and a 1,000 won decrease in the cellular service flat rate.
The total investment for the 3rd quarter of 2004 amounted to KRW 416.0 billion. The company’s total investment thus far in 2004, was KRW 879.9 billion. This represents 52% of our full year target investment amount of KRW 1.7 trillion. This is a 6% increase over the 46% recorded for the same period in 2003. An SK Telecom official forecasted that the company will reach the targeted investment for this year without difficulty.
Shin Bae Kim, president of SK Telecom said, "Even though the lowered service rate started in the 3rd quarter of 2004, SK Telecom’s growth rate has been maintained due to the steep increase in wireless Internet service sales. As the wireless Internet business continues to play a pivotal role in leading the domestic mobile communications industry, we will not concentrate on the voice call-oriented business any longer. Instead we will place our utmost emphasis on new growth drivers that are Digital Product Providers".
SK Telecom achieved an operating income of KRW 611.3 billion and total sales of KRW 2.4 trillion for the 3rd quarter of 2004. Operating income and total sales increased 32% and 2% respectively over the 2nd quarter of 2004. In addition, the EBITDA margin came to KRW 1.4 trillion, 20% above the 2nd quarter results. In addition, total sales increased 1% over the same period of 2003. This demonstrates the company’s steady growth despite sales reduction factors that included lowering service rates in September, as well as an adjustment of interconnection revenue rates.
The increase in the company’s total sales can be attributed to the remarkable growth rate in wireless Internet sales, and the ceaseless efforts to improve our subscriber base. Due to the expansion of high-function handset market penetration caused by the ’June service’, and constant growth of new service areas such as ’Mobile Cyworld’, the sales for wireless Internet service came to KRW 470.3 billion. These were 13% and 39% increases over the 2nd quarter of 2004 and the second quarter of 2003, respectively. This represented 21.2% of the company’s overall sales revenue when interconnection revenues are not included.
The company’s operating income increased 32% over the KRW 462.7 billion recorded in the 2nd quarter of 2004. However, it decreased 25% over the KRW 820.1 billion recorded in the 3rd quarter of 2003.
SK Telecom’s self-regulation policy regarding market share and clean marketing approaches led to the reduction of expenses, and the steep increase in operating income in the 3rd quarter. Marketing expenses for the 3rd quarter totaled KRW 435.7 billion, a 24% decrease from the KRW 575.0 billion recorded in the 2nd quarter of 2004. However, marketing expenses increased due to the introduction of the Mobile Number Portability system, and general expenses also increased due to the adjustment of interconnection revenue rates. These are the primary factors that explain the decrease in operating income for the 3rd quarter of 2004, when compared to the same period in 2003.
The monthly average revenue per user (ARPU) rose 1% to 43,343 won over the 2nd quarter of 2004. However, it decreased 3% over the same period in 2003 due to the lowering of Calling Number Identification service rates, the adjustment of interconnection revenue rates, and a 1,000 won decrease in the cellular service flat rate.
The total investment for the 3rd quarter of 2004 amounted to KRW 416.0 billion. The company’s total investment thus far in 2004, was KRW 879.9 billion. This represents 52% of our full year target investment amount of KRW 1.7 trillion. This is a 6% increase over the 46% recorded for the same period in 2003. An SK Telecom official forecasted that the company will reach the targeted investment for this year without difficulty.
Shin Bae Kim, president of SK Telecom said, "Even though the lowered service rate started in the 3rd quarter of 2004, SK Telecom’s growth rate has been maintained due to the steep increase in wireless Internet service sales. As the wireless Internet business continues to play a pivotal role in leading the domestic mobile communications industry, we will not concentrate on the voice call-oriented business any longer. Instead we will place our utmost emphasis on new growth drivers that are Digital Product Providers".