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Press Release
Net income of 630 billion won was recorded on total sales of 2.9 trillion won.
In spite of a reduction in the number of cellular phone subscribers, the company?s average revenue per user (ARPU) increased.
On August 3, SK Telecom(www.sktelecom.com) announced that it achieved the highest net income and total sales ever for the first half of 2001.
In accordance with the company?s announcement, as of the end of June 2001, there were 640 thousand fewer cellular phone subscribers compared with the same period a year ago. This was because marketing efforts were restricted when the company was forced to reduce its share of the Korean market below 50% (as instructed by the Korean government when it allowed Shinsegi Telecomm to merge with SK Telecom). However, the company?s total sales for the first half of 2001 reached 2.915 trillion won, showing more than a 1% increase from the same period of 2000. In addition, net income skyrocketed to 632.3 billion won, up 70.4% from the same period a year ago.
Steadily growing monthly minutes of usage (MOU) per cellular phone user was an important factor in explaining the achievement of the highest half-yearly results in its history. MOU per user has increased from 149 in the first half and 163 in the second half of 2000 to 170 (from January to April 2001). Furthermore, this occurred during the period when the company was forced to reduce its share of the Korean market, SK Telecom continuously implemented a policy of qualitative growth, as the company carried out a variety of promotional activities for subscribers of excellent credit, while it made the requisites for service cancellation become stricter for marginal subscribers. This factor also contributed to SK Telecom?s achieving this remarkable business performance.
Due to the decrease in the cellular phone users? temporary suspension and increase of MOU per user, the company?s average revenue per user (ARPU) increased over 5,000 won from 40,736 won in June 2000 to 46,082 won for the same period this year. The total sales of wireless data service that has been emerging as the company?s new growth engine skyrocketed to 85.4 billion won in the first half of 2001, a 2-fold increase over 37.5 billion won in the same period a year ago.
Taking look at the SK Telecom?s second quarter business results compared to those in the first quarter, we see that the total sales reached 1.494 trillion won, increasing 72.4 billion won, while operating expenses totaled 1.054 trillion won, up 257.6 billion won. This resulted in a net income of 232.6 billion won, a decrease of 167.1 billion won.
The second quarter operating expenses increased from those of the first quarter because one-time expenses have been fully reflected in second quarter income statement according to half-yearly accounting principles. The one time expenses include a 110 billion won increase of depreciation expenses and applying 2 years worth of retroactive discount program funds (40 billion won) according to accounting principles for discounting fees to customers (discounting programs for long-term subscribers called ?Call Plus?).
SK Telecom said ?the sales for the second half of this year will increase as the company is expected to secure about 900 thousand more cellular phone service subscribers. Unlike the first half of this year, one-time expenses will decrease. Considering these factors, the company expects that the net income for this year will reach over 1.16 trillion won on total sales of 6.06 trillion won?.
In accordance with the company?s announcement, as of the end of June 2001, there were 640 thousand fewer cellular phone subscribers compared with the same period a year ago. This was because marketing efforts were restricted when the company was forced to reduce its share of the Korean market below 50% (as instructed by the Korean government when it allowed Shinsegi Telecomm to merge with SK Telecom). However, the company?s total sales for the first half of 2001 reached 2.915 trillion won, showing more than a 1% increase from the same period of 2000. In addition, net income skyrocketed to 632.3 billion won, up 70.4% from the same period a year ago.
Steadily growing monthly minutes of usage (MOU) per cellular phone user was an important factor in explaining the achievement of the highest half-yearly results in its history. MOU per user has increased from 149 in the first half and 163 in the second half of 2000 to 170 (from January to April 2001). Furthermore, this occurred during the period when the company was forced to reduce its share of the Korean market, SK Telecom continuously implemented a policy of qualitative growth, as the company carried out a variety of promotional activities for subscribers of excellent credit, while it made the requisites for service cancellation become stricter for marginal subscribers. This factor also contributed to SK Telecom?s achieving this remarkable business performance.
Due to the decrease in the cellular phone users? temporary suspension and increase of MOU per user, the company?s average revenue per user (ARPU) increased over 5,000 won from 40,736 won in June 2000 to 46,082 won for the same period this year. The total sales of wireless data service that has been emerging as the company?s new growth engine skyrocketed to 85.4 billion won in the first half of 2001, a 2-fold increase over 37.5 billion won in the same period a year ago.
Taking look at the SK Telecom?s second quarter business results compared to those in the first quarter, we see that the total sales reached 1.494 trillion won, increasing 72.4 billion won, while operating expenses totaled 1.054 trillion won, up 257.6 billion won. This resulted in a net income of 232.6 billion won, a decrease of 167.1 billion won.
The second quarter operating expenses increased from those of the first quarter because one-time expenses have been fully reflected in second quarter income statement according to half-yearly accounting principles. The one time expenses include a 110 billion won increase of depreciation expenses and applying 2 years worth of retroactive discount program funds (40 billion won) according to accounting principles for discounting fees to customers (discounting programs for long-term subscribers called ?Call Plus?).
SK Telecom said ?the sales for the second half of this year will increase as the company is expected to secure about 900 thousand more cellular phone service subscribers. Unlike the first half of this year, one-time expenses will decrease. Considering these factors, the company expects that the net income for this year will reach over 1.16 trillion won on total sales of 6.06 trillion won?.