SEOUL, KOREA - SK Telecom (NYSE:SKM) announced its earnings on a K-IFRS consolidated basis for the third quarter of 2014: revenue of KRW 4.367 trillion, operating income of KRW 537 billion and net income of KRW 531 billion.
The revenue rose by 5.9% year-on-year (YoY) and 1.4% quarter-on-quarter (QoQ) backed by increase of the LTE/LTE-Advanced subscribers. As of the end of September, the number of LTE/LTE-Advanced subscribers surpassed 16 million, taking up more than 57 percent of the company’s total mobile subscriber base. By the year end, the proportion is expected to reach 60%.
The operating income in the third quarter fell by 1.7% on a QoQ basis. Previously, in the second quarter, the operating income jumped by 116.4% from the first quarter due to base effect of temporary business suspension ordered by the government. However, in the third quarter, the number edged down from the second quarter as the company reinforced tangible benefits for customers, in particular, by reducing subscription fee and providing unlimited membership points.
Meanwhile, the net income increased by 6.7% QoQ, propelled by strong performance of SK Hynix, recording KRW 531 billion.
After reducing subscription fee by 50% from KRW 23,760(VAT included) to KRW 11,880 last August, SK Telecom plans to scrap the fee all together soon. The company expects the abolition of fee to save users about KRW 92 billion in communication expenses.
In the period, SK Telecom intensively beefed up benefits for its existing and long-term customers. For example, the company ran a special promotion to offer unlimited membership points to all VIP and Gold customers and launched T Membership Global to allow customers to enjoy membership benefits overseas.
Also, in an attempt to deliver a maximum amount of duplicate discounts from bundled products, SK Telecom strengthened benefits of ‘All Family Free’, a bundled product of wired and wireless services, and diversified tariff plans for senior citizens and the challenged while expanding the benefits.
Meanwhile, in line with its new scheme to bring change to all dimensions of people’s lives through ICT, SK Telecom continued multi-faceted efforts to drive its growth strategies, for example, in IoT solutions business including smart appcessory and security.
SK Telecom set a mid-to long-term direction in smart appcessory business by acquiring iriver while developing a security service combining the cloud-based intelligent video surveillance and unmanned systems for security in cooperation with NSOK, a local security firm.
Based on its differentiated ICT competencies, the company will continue to develop new products and associated services. Furthermore, by converging ICT and traditional industries, SK Telecom will consistently enhance national competitiveness and revitalize the country’s regional economies.
SK Telecom Chief Financial Officer Hwang Soo-cheol said, “Throughout the third quarter, SK Telecom made strenuous efforts to solidify its competitiveness on products and services by further expanding customer benefits. Based on differentiated competencies in network, the company will pursue a market paradigm shift in a direction towards a service-centric competition with an aim to enhance customer value”.
By Cheon Tae-un(ctu@koreaittimes.com)
