Seoul, Korea, 29 April 2010 - SK Telecom (NYSE:SKM) announced its earnings for the first quarter of 2010: revenue of KRW 3.018 trillion, operating income of KRW 480.5 billion and net income of KRW 321.8 billion.
The revenue dropped by 2.6% compared to the previous quarter partly due to shorter business days. However, the figure climbed by 4.9% year-on-year, backed by gradual increase in the number of subscribers thanks to customer tariff cut measures such as per-second charge system and subscription fee reduction introduced in this March and late last year respectively.
Operating income dropped by 14.8% Y-on-Y because of increase in marketing expenses and depreciation cost rise caused by taking SK Network's dedicated line network of last year.
As of late March of 2010, the cumulative number of subscribers climbed by 6.3 % Y-on-Y to 24.82 million, with 550 thousand more subscribers than the figure of late 2009. This led to an increase in marketing expense but is expected to boost subscriber growth, expanding the company's future sales basis.
The wireless Internet revenue expanded by 6.8% Y-on-Y and the number of flat-rate data plan subscribers reached 3.48 million as of late March 2010, marking 23.2% growth Y-on-Y. Wireless internet revenue of this year is expected to further grow with an increment of the number of flat-rate data plan users thanks to increasing smart phone penetration.
Average revenue per user (ARPU) marked KRW 41,003, marking Q-on-Q and Y-on-Y decreases by 4.0% and 0.9% respectively. The figure declined due to the impact of implementing per-second charge system and subscription fee reduction, which were introduced to maximize customer benefit as a part of SK Telecom's measure to provide customer friendly services.
Meanwhile, B2B revenue during 1Q marked KRW 165.8 billion, gaining 50% Y-on-Y growth. It is expected that the company could smoothly achieve its B2B/IPE 1 trillion won revenue target by securing new revenue sources from B2B as well as IPE business home and abroad.
SK Telecom's CFO Dong-Hyun Jang said, "The first quarter was a time for SK Telecom to prepare an earnest growth of wireless Internet business under the strategy of openness and mutual sharing. From the second quarter, SK Telecom will take the wireless market initiative, firming its existing market leadership."
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