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Press Release
Revenue of KRW 2.877 trillion, operating income of KRW 564 billion and net income of 316.7 billion : revenue and operating income increased by 1.4% and 1.8%, respectively and net income decreased by 17.3% compared to first quarter of 2008
Due to increased customer sign-ups for discount price plans and bundled products, ARPU contracted by 3% YoY and revenue grew by only 1.4% YoY while cumulative subscriber count went up by 4%
Expanded investment in WCDMA brings the total CAPEX to jump by 25.3% YoY to KRW 348.4 billion
Seoul, Korea, 30 April 2009 – SK Telecom (NYSE:SKM) announced its earnings for the first quarter of 2009: revenue of KRW 2.877 trillion, operating income of KRW 564 billion and net income of KRW 316.7 billion.
The revenue marked KRW 2.877 trillion, dropping by 4.3% compared to the previous quarter partly due to shorter business days. However, the figure climbed by 1.4% year-on-year, backed by gradual increase in the number of subscribers.
Wireless internet revenue in the first quarter stood at KRW 624.9 billion, falling by 0.3% quarter-on-quarter, resulting from the sale of the company’s music business ’MelOn’ to LOEN Entertainment. Yet on a year-on-year basis, the figure expanded by 4.6% from growth in flat rate data plan subscribers and phone mail use.
Marketing expenses marked KRW 660.7 billion, contracting 13.8% year-on-year even in the face of seasonal demands related to the start of new school year, thanks to effective market stabilizing efforts and the company’s cost-cutting measures.
Operating income amounted to KRW 564 billion, increasing by 1.8% compared to the same period last year. Net income reached KRW 316.7 billion or decreased 17.3% year-on-year due to an increase in valuation losses, triggered by foreign exchange rate increases and interest rate fluctuations.
Furthermore, SK Telecom announced that it executed capital expenditure (CAPEX) of KRW 348.4 billion, representing a 25.3% rise year-on-year, with the aim to secure WCDMA capacity and improve call quality.
The cumulative number of subscribers climbed by 4% year-on-year to reach 23.35 million and average revenue per user (ARPU) edged down by 3% year-on-year to KRW 41,372, resulting from increasing number of discount plan subscribers and decreasing number of new subscribers as the market stabilized.
In particular, the company’s revenue marked a relatively small growth when considering the 4% year-on-year increase in cumulative number of subscribers, showing that an increasing number of customers are enjoying wider benefits by joining discount plans and purchasing bundled products.
SK Telecom’s CFO Dong-Hyun Jang said, "Korean mobile telecommunications market continued to stabilize in the first quarter of 2009. SK Telecom will maintain market leadership by providing innovative services based on a new customer experience management program and launching various bundled products."