※  All business performance figures are based on Korean International Financial Reporting Standards (K-IFRS).
 
SK Telecom (NYSE:SKM) announced its earnings on a K-IFRS consolidated basis for the third quarter of 2013: revenue of KRW 4.125 trillion, operating income of KRW 551.4 billion and net income of KRW 502.2 billion.
 
The revenue edged up 0.2% quarter-on-quarter (QoQ) due to growth of ARPU and new business areas including enterprise solutions. Billing ARPU* for the third quarter grew 2.6% QoQ to stand at KRW 34,909, backed by the increased proportion of LTE subscribers. As of the end of September 2013, the number of SK Telecom’s LTE subscribers marked 12.27 million, taking up over 45% of the company’s total mobile subscriber base.
* The billing ARPU excludes sign-up fee from mobile service revenues
 
Although the total amount of operating expenses for the third quarter remained similar to that of the previous quarter, the operating income increased by 1.1% QoQ as the company successfully stabilized the market by focusing on customer retention measures – i.e. programs that offer benefits to long-term subscribers including handset discount program - while spending less on acquiring new customers. Average churn rate for the third quarter is 2.25%, lower than last quarter’s 2.27%. In particular, churn rate for September went down further to stand at 1.98%. Moreover, led by SK Telecom, the market is rapidly moving toward a product/service-oriented competition as other mobile carriers have also launched efforts to retain their customers by offering greater benefits.
 
Consolidated net income expanded by 7.4% QoQ to stand at KRW 502.2 billion, 75% of which was contributed by strong performance of SK Hynix and sales of SK Planet’s stake in LOEN Entertainment. Following the previous quarter, SK Hynix has again posted record earnings in the third quarter, resulting in KRW 223.1 billion from the gain on valuation using the equity method of accounting. In addition, by selling LOEN Entertainment, the company recorded KRW 171.9 billion of income from discontinued operations.
 
SK Telecom Chief Financial Officer Hwang Soo-cheol said, “SK Telecom was able to achieve meaningful outcome in the third quarter through multifaceted efforts to provide customers with innovative products and services that promise greater value and convenience, thereby transforming the overall market paradigm. Going forward, armed with strong network competitiveness and specialized services, SK Telecom will lead the migration toward an era where data communication becomes the mainstream, while promoting a health competition in the marketplace to attain sustainable growth and maximize shareholder value.”