(Seoul, 24 April 2008) - SK Telecom announced its earnings for the first quarter of 2008 - revenue of KRW 2.837 trillion, operating income of KRW 554 billion, and net income of KRW 382.9 billion. The revenue increased by 4.6% year on year while operating income and net income declined by 16.3% and 3.4% respectively. 

Backed by the continued subscriber growth, the revenue expanded 4.6% year on year. On a quarter-on-quarter basis, the revenue was reduced by 2.7% due to the T-to-T Calling Plan released in October 2007 and 30% cut in phone-mail tariff earlier this year.

As SK Telecom lowered phone-mail tariff and released "ting" Control Rate, a capped mobile plan for teenagers, the revenue of wireless Internet declined to KRW 597.3 billion, down by 11.8% year on year and 17.3% quarter on quarter.

With competition in the WCDMA market heating up, the marketing expenses increased 30.7% year on year. However, due to efficient marketing expense management the expenses went down from the previous quarter to KRW 766.8 billion, posting a 10.2% decrease. The marketing expenses accounted for 27% of the total revenue.

Due to the reduced marketing expenses, the operating income rose to KRW 554 billion, grown by 78.3% from the previous quarter. Compared to the previous year, however, the operating income decreased by 16.3%.

The 2008 1Q cumulative subscriber count is 22.37 million, gained 8% year on year. Average revenue per user (ARPU) decreased to KRW 42,654, down by 3% year on year because of phone-mail tariff cut and T-to-T Calling Plan.

SK Telecom’s CFO Kyou Bin Lee said, "With handset subsidy ban abolished and minimum term contract introduced, market uncertainty is growing. We understand this might lead to concerns over even fiercer competition. However, SK Telecom will continue its efforts to enhance customer and shareholder value by creating a strong synergy between our telecommunication, convergence, and global businesses." 

 

※ The conference call in regard to SK Telecom’s 2008 1Q earnings can be heard via SK Telecom’s webpage (https://www.sktelecom.com/jsp/invest/ir/ResultList.jsp?menucode=A241) on Thursday 24, April, for one and a half hours from 16:00.