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Press Release
Revenue of KRW 4.305 trillion, operating income of KRW 546.1 billion and net income of KRW 497.6 billion
On a year-on-year basis, revenues, operating income and net income rose respectively by 4.6%, 0.1% and 6.4%.
Supported by reinforced benefits for existing and long-term customers, the churn rate in 2Q dropped to 1.9%, the lowest record in 8 years since 2006 when it marked 2.0%.
SK Telecom (NYSE:SKM) announced its earnings on a K-IFRS consolidated basis for the second quarter of 2014: revenue of KRW 4.305 trillion, operating income of KRW 546.1 billion and net income of KRW 497.6 billion.
The revenue rose by 4.6% year-on-year (YoY) and 2.5% quarter-on-quarter (QoQ) backed by increase of the LTE/LTE-Advanced subscribers and strong performance in its enterprise solution business. As of the end of June, the number of LTE/LTE-Advanced subscribers marked 15.38 million, exceeding 55 percent of the company’s total mobile subscriber base. The enterprise solution business has become a stable growth pillar of the company with its revenue in the second quarter jumped by 23% from a year ago to stand at KRW 130.9 billion.
The operating income in the second quarter remained similar to that of the previous year, edging up 0.1%. On a QoQ basis, however, the operating income jumped by 116.4% as it reflected base effect caused by overheated market competition in the first quarter. Meanwhile, the net income increased by 6.4% YoY and 86.2% QoQ.
In the period, SK Telecom intensively beefed up benefits for its existing and long-term customers. For example, to celebrate its 30th anniversary, the company ran special promotions that offered free data coupon to all mobile customers who visited its authorized retail stores and provided the benefit of service fee exemption for up to 30 years to selected customers. The number of customers participated in the promotions amounted to 3.1 million. Also, for its customers graded VIP or Gold, unlimited membership points were provided.
As a result, the churn rate, an indicator of satisfaction level of existing and long-term customers, recorded as low as 1.9% on average in the second quarter. SK Telecom saw its churn rate falling below 2.0% for the first time in 8 years since 2006 when its annual average churn rate marked 2.0%.
Furthermore, in the second quarter of 2014, SK Telecom commercialized 225Mbps LTE-Advanced for the first time in the world and presented an ICT-based economic blue print. Also, as demonstrated in its recently-introduced innovative data products and price plans, SK Telecom’s multi-faceted efforts to provide optimized services to customers continued. Among them are unlimited data plans for LTE and LTE-Advanced subscribers, as well as optional data plans namely ‘Unlimited Data Option for Commuters’ and ‘Subway Free’ plan.
Meanwhile, SK Telecom will continuously strive to maximize differentiated customer value in the third quarter by innovating products and services so that it could lead the era of data services.
In line with its new scheme to bring change to all dimensions of people’s lives through ICT, the company also plans to further develop 5G technologies and give concrete shape to its new IoT-based solutions.
In addition, SK Telecom will focus on fostering health care, security and low power wireless sensor networks that are considered to hold big growth potential and continue to pioneer new areas in smart appcessories.
SK Telecom Chief Financial Officer Hwang Soo-cheol said, “In the second quarter, SK Telecom expanded more tangible benefits for its customers rather than engaging in exhaustive market competition. Based on differentiated competencies in network and customer-oriented services, the company will consistently pursue the market paradigm shift towards service/product-centric competition”.
The revenue rose by 4.6% year-on-year (YoY) and 2.5% quarter-on-quarter (QoQ) backed by increase of the LTE/LTE-Advanced subscribers and strong performance in its enterprise solution business. As of the end of June, the number of LTE/LTE-Advanced subscribers marked 15.38 million, exceeding 55 percent of the company’s total mobile subscriber base. The enterprise solution business has become a stable growth pillar of the company with its revenue in the second quarter jumped by 23% from a year ago to stand at KRW 130.9 billion.
The operating income in the second quarter remained similar to that of the previous year, edging up 0.1%. On a QoQ basis, however, the operating income jumped by 116.4% as it reflected base effect caused by overheated market competition in the first quarter. Meanwhile, the net income increased by 6.4% YoY and 86.2% QoQ.
In the period, SK Telecom intensively beefed up benefits for its existing and long-term customers. For example, to celebrate its 30th anniversary, the company ran special promotions that offered free data coupon to all mobile customers who visited its authorized retail stores and provided the benefit of service fee exemption for up to 30 years to selected customers. The number of customers participated in the promotions amounted to 3.1 million. Also, for its customers graded VIP or Gold, unlimited membership points were provided.
As a result, the churn rate, an indicator of satisfaction level of existing and long-term customers, recorded as low as 1.9% on average in the second quarter. SK Telecom saw its churn rate falling below 2.0% for the first time in 8 years since 2006 when its annual average churn rate marked 2.0%.
Furthermore, in the second quarter of 2014, SK Telecom commercialized 225Mbps LTE-Advanced for the first time in the world and presented an ICT-based economic blue print. Also, as demonstrated in its recently-introduced innovative data products and price plans, SK Telecom’s multi-faceted efforts to provide optimized services to customers continued. Among them are unlimited data plans for LTE and LTE-Advanced subscribers, as well as optional data plans namely ‘Unlimited Data Option for Commuters’ and ‘Subway Free’ plan.
Meanwhile, SK Telecom will continuously strive to maximize differentiated customer value in the third quarter by innovating products and services so that it could lead the era of data services.
In line with its new scheme to bring change to all dimensions of people’s lives through ICT, the company also plans to further develop 5G technologies and give concrete shape to its new IoT-based solutions.
In addition, SK Telecom will focus on fostering health care, security and low power wireless sensor networks that are considered to hold big growth potential and continue to pioneer new areas in smart appcessories.
SK Telecom Chief Financial Officer Hwang Soo-cheol said, “In the second quarter, SK Telecom expanded more tangible benefits for its customers rather than engaging in exhaustive market competition. Based on differentiated competencies in network and customer-oriented services, the company will consistently pursue the market paradigm shift towards service/product-centric competition”.