※  All business performance figures are based on Korean International Financial Reporting Standards (K-IFRS).

SK Telecom (NYSE:SKM) today announced its earnings on a K-IFRS consolidated basis for the first quarter of 2015: revenue of KRW 4.240 trillion, operating income of KRW 402.6 billion and net income of KRW 442.7 billion.

Although affected by the elimination of sign-up fees and decreased network interconnection revenue due to the interconnection fee reduction, the revenue grew 0.9% year-on-year(YoY) to KRW 4.240 trillion backed by growth of its subsidiaries including SK Planet, which posted increased sales from 11st and Syrup, and the acquisition of Iriver and NSOK.

With the popularization of LTE services, as of the end of March 2015, the number of SK Telecom’s LTE subscribers marked 17.45 million, taking up over 61% of the company’s total mobile subscriber base.

The operating income dropped 17.8% quarter-on-quarter (QoQ) on the back of increased marketing expenses, including the abolition of sign-up fees, strengthened membership benefits and increased support for customers who switch their mobile device. Compared to the same period last year, the operating income rose by 59.5% due to base effect*.

* SK Telecom experienced a temporary decrease in operating income in the first quarter of 2014 due to a sharp increase in marketing expenses in the abnormally overheated market and its payment of compensation for the network failure incident in March 2014. 

Compared to the same period last year, the net income jumped by 65.6% to stand at KRW 442.7 billion as SK Hynix continues to deliver strong earnings. However, compared to the previous quarter, it fell by 12% due to decreased operating income.

SK Telecom has been making efforts to transform the market competition paradigm by building customer trust through the creation of a healthy distribution environment and innovative products/services, as well as strengthened network competitiveness.

In the first quarter of 2015, the company has strengthened benefits for its existing customers by revamping its membership services – i.e. increased discount limit, greater number of membership partners, expanded geographic coverage of membership programs, etc. – and ‘T Kids’ and ‘T Outdoor,’ services designed to satisfy the needs of specific customers, have so far attracted 185,000 and 110,000 subscribers, respectively.

Moreover, as of the end of March 2015, SK Telecom has deployed a total of 26,000 units of 2.1GHz base stations, and is providing tri-band LTE-A service in main areas of 85 cities nationwide, including Seoul and six other metropolitan cities.

As the result of such efforts, SK Telecom’s churn rate, which represents the level of satisfaction of its existing/long-term customers, marked 2.0% on average – excluding the one-off cancellation of accounts - in the first quarter of 2015. Also, in March 2015, the company ranked number one, for 18 consecutive years, in the category of mobile telecommunications service by National Customer Satisfaction Index. Its subsidiary SK Broadband has also topped the list in the category of high-speed Internet and IPTV for five years in a row.

Furthermore, under the new growth strategy centered around three ‘Next-Generation Platforms*,’ SK Telecom will create an open ecosystem based on its telecommunications assets and offer innovative products/services that meet the customer’s unrealized needs, thereby maximizing customer value and achieving sustained growth.

*The three Next-Generation Platforms SK Telecom announced in April are Lifestyle Enhancement Platform, Advanced Media Platform and IoT Service Platform.

“Based on our strengthened product/ service offerings and differentiated network competitiveness, SK Telecom will shift the competition paradigm to create a healthy business environment and improve our profitability,” said Lee Yong-hwan, Chief Financial Officer of SK Telecom. “Besides achieving stronger performance in the network operation business, we will secure a new growth momentum through our three Next-Generation Platforms.”

About SK Telecom

SK Telecom (NYSE: SKM, KSE: 017670), established in 1984, is Korea’s largest telecommunications company with more than 28 million mobile subscribers, accounting for around 50% of the market. The company reached KRW 17.164 trillion in revenue in 2014. As the world’s first company to commercialize CDMA, CDMA 2000 1x, CDMA EV-DO and HSDPA networks, SK Telecom launched the nation’s first LTE service in July 2011. SK Telecom also became the world’s first mobile carrier to commercialize 150Mbps LTE-Advanced in June 2013 and 225Mbps LTE-Advanced in June 2014 through Carrier Aggregation(CA). In line with its efforts to swiftly move towards the next-generation mobile network system, or 5G, it successfully commercialized 300Mbps tri-band LTE-A CA. As of the end of March 2015, the company has over 17.4 million LTE and LTE-Advanced subscribers. Based on its strength in network operations business, SK Telecom is seeking new growth engines through three innovative platforms namely Lifestyle Enhancement Platform, Advanced Media Platform and IoT Service Platform. For more information, please visit www.sktelecom.com or email to press@sktelecom.com.