Seoul, Korea – SK Telecom (NYSE:SKM) announced its earnings on a K-IFRS consolidated basis for year 2014: revenue of KRW 17.164 trillion, operating income of KRW 1.825 trillion and net income of KRW 1.799 trillion.
The revenue increased by 3.4% year-on-year (YoY) to KRW 17.164 trillion backed by expanded LTE subscriber base, increased sales from its new businesses including the enterprise solution business and growth of its subsidiary companies.
With the spread of the LTE service, as of December 2014, SK Telecom has attracted 16.73 million LTE subscribers, which accounts for around 58% of its total mobile subscriber base. Sales from its new businesses, including the enterprise solution business, increased by 12.7% YoY.
The operating income decreased by 9.2% YoY due to increased marketing expenses as the company expanded customer benefits by eliminating sign-up fees for new customers and enhanced membership benefits.
The consolidated net income for the year 2014 jumped 11.8% YoY to stand at KRW 1.799 trillion backed by strong performance of SK Hynix.
Marking its 30th anniversary in 2014, SK Telecom has further solidified its leadership in the Korean mobile telecommunications market through innovative products/services, outstanding network quality and attractive new business models.
To alleviate customers’ cost burden, the company reduced sign-up fee by 50 percent in August and scrapped the fee altogether in November for the first time in the Korean mobile industry. Also, in December 2014, it eliminated cancellation fees for customers who received monthly plan discounts but fail to complete contracts.
SK Telecom focused on enhancing customer value by launching new services tailored to the market needs, including T Phone, T Kids Phone and T Outdoor, while providing greater benefits to its existing customers through unlimited membership points and strengthened bundled products.
Moreover, in 2014, the company continued its efforts to strengthen its LTE leadership and network quality by commercializing Wideband LTE-Advanced (LTE-A) service for the first time in the world.
SK Telecom has also generated meaningful results in the area of new business by expanding its solution and IPTV businesses, and strengthening its healthcare business foundation. Meanwhile, it successfully developed new growth opportunities in the global and convergence businesses by opening a medical center in Shenzhen and acquiring NSOK, a security and surveillance company, and iRiver, an audio equipment maker.
This year, SK Telecom is set to complete its work of shifting the market paradigm towards a service/product-oriented competition and plans to boost the use of multimedia contents, while offering new products/services optimized for the advanced network environment.
Under the goal of achieving 5G demonstration and commercialization in 2018 and 2020, respectively, SK Telecom plans to lead the advancement of the network structure through innovative technologies developed in cooperation with diverse partners. Also, to this end, the company will create a 5G network test bed to carry out technology verifications and demonstrations.
With the emergence of the IoT era, SK Telecom announced plans to create new IoT business models by leveraging its existing strength and capabilities. It will focus on promoting IoT-based enterprise solutions and IoT platform business based on its existing M2M business. In addition, in media business, it plans to secure 7 million IPTV subscribers and develop diverse business models including commerce.
Furthermore, aiming to strengthen national competitiveness and revitalize local economies, SK Telecom will converge its differentiated ICT with traditional industries.
“The year 2014 is marked as a special year for SK Telecom as it successfully transformed the market paradigm towards product/service-oriented competition and achieved meaningful results in its growth businesses,” said Hwang Keun-joo, Executive Vice President and Head of Strategy and Planning Division at SK Telecom. “This year, SK Telecom will continue to strengthen its product/service competitiveness by expanding customer benefits and generate tangible results in the new growth businesses by leveraging its differentiated network competitiveness.”
By Shin Ji-hye
