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Press Release
Revenue of KRW 11.675 trillion, operating income of KRW 2.060 trillion and net income of KRW 1. 278 trillion: revenue increased by 3.4% while operating income and net income decreased by 5.1% and 22.2%, respectively, compared to year 2007
2008 marked as a year where the company enhanced WCDMA competitiveness and strengthened its business portfolio to fully embrace the emerging era of convergence
Increased investment in WCDMA brings the total amount of investment in 2008 to a record level of KRW 1.919 trillion
Seoul, Korea, 23 January, 2009 – SK Telecom (NYSE:SKM, CEO & President Man-Won Jung) announced its earnings for the year 2008: revenue of KRW 11.675 trillion, operating income of KRW 2.060 trillion and net income of KRW 1.278 trillion.
The revenue increased by 3.4% compared to the previous year to record KRW 11.675 trillion backed by gradual increase in the number of subscribers and growth in interconnection revenue despite various discount plans and SMS tariff cut that took place since January 2008.
Marketing expenses in 2008 marked KRW 3.064 trillion, up by 7.3% compared to the previous year due to competition in WCDMA marketing, which was especially fierce during the first half of 2008. Marketing expenses took up 26.2% of the company’s revenue.
Operating income recorded KRW 2.060 trillion, contracting 5.1% compared to 2007, resulting from increases in marketing expenses and depreciation expenses caused by expanded investment in WCDMA. Net income in 2008 stood at KRW 1.278 trillion, representing a 22.2% decline compared to the previous year with a decrease in equity method gain and increase in non-operating expenses due to the reflection of market price of SK Telecom’s equity in LG Powercom Co., Ltd.
Furthermore, SK Telecom announced that a total of KRW 1.919 trillion was invested in year 2008 to secure WCDMA coverage and enhance call quality.
The 2008 cumulative number of subscribers climbed by 5% compared to 2007 to reach 23.03 million and average revenue per user (ARPU) edged down by 3% to KRW 43,016 with the introduction of various discount plans and reduction in wireless Internet ARPU.
For the fourth quarter of 2008, the revenue increased by 3.7% quarter-on-quarter to mark KRW 3.007 trillion. Also compared to the previous quarter, the operating income went down by 7% to stand at KRW 468.8 billion and net income dropped by 21% to mark KRW 263.1 billion.
SK Telecom’s CFO Dong-Hyun Jang said, "SK Telecom will increase the number of flat rate data plan subscribers to revitalize the wireless internet business and create a solid foundation for sustained growth by advancing WCDMA while strengthening its core competitiveness."