SEOUL, KOREA — SK Telecom (NYSE:SKM) announced its earnings on a K-IFRS consolidated basis for the second quarter of 2012: revenue of KRW 4.015 trillion, operating income of KRW 384.6 billion and net income of KRW 120.6 billion.
Despite continuous rise in smartphone penetration and strong growth of LTE subscriber base, the revenue decreased by 0.6% (or KRW 22.3 billion) year-on-year (YoY) due to the impact of diverse mobile tariff cut measures including lowering of the monthly basic rate by KRW 1,000 that took effect in September 2011.
The operating income decreased by 42.8% YoY due to factors including increased marketing expenses for LTE subscriber acquisition, expanded LTE network investment cost as well as mobile tariff reduction measures. The consolidated net income for the second quarter dropped 74.1% compared to the same period last year as the company ended satellite DMB service.
EBITDA fell by 22.7% YoY to KRW 1.003 trillion, which translates into an EBITDA margin of 24.9%, 7.1%P lower than the same period last year.
SK Telecom surpassed 3.4 million LTE subscriber mark in just one year after launching commercial LTE service in July 2011 and exceeded 4.22 million LTE subscribers as of the end of July 2012. The company said that it is on track to achieve its target of 7 million LTE subscribers by the end of 2012.
SK Telecom said that Average Revenue per User (ARPU) has started growing again thanks to the increase of LTE subscribers who not only enjoy video services (e.g. watching movies and TV shows on their smartphones), but also use new services like network games and online shopping. The billing ARPU (excluding sign-up fee from mobile service revenues) expanded by 1.8% quarter-on-quarter (QoQ) to KRW 33,700.
SK Telecom said that B2B revenues are increasing as it is launching new enterprise solutions and winning more projects based on its competitive edge in the LTE market. The company added that SK Planet is successfully generating synergies with SK Telecom. SK Planet’s T Store, which firmly established itself as Korea’s No.1 application store, has surpassed 15 million subscribers and 900 million cumulative downloads in the second quarter and the company’s LTE-specialized multimedia package called T Freemium has already attracted over 1.15 million subscribers.
SK Telecom’s Chief Financial Officerm Seung-yun Ahn said, “Although a fierce competition took place among mobile operators in the second quarter to gain an upper hand in the LTE market, SK Telecom has been focusing on providing differentiated network quality and service to secure and maintain a solid market leadership. With wider adoption of LTE smartphones backed by a wide range of attractive LTE services, SK Telecom expects to achieve stronger growth in the mid-to long-term and contribute to expansion of SK Planet’s platform business.”
