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Press Release
Operating income of KRW 2.36 trillion was realized on total sales of KRW 9.70 trillion.
Operating income decreased by KRW 721 billion (23%), and total sales rose KRW 183 billion (2%), over the previous year
Wireless Internet sales came to KRW 1.82 trillion, a KRW 503 billion increase over the year earlier total. This represents the best result ever attained in the company’s entire history.
On January 26th, SK Telecom announced that the company achieved an operating income of KRW 2.36 trillion, and total sales of KRW 9.70 trillion, for fiscal year 2004. In addition, EBITDA recorded KRW 4.59 trillion. SK Telecom’s total sales increased KRW 183 billion (2%), over the previous year. Its operating income and EBITDA decreased by KRW 721 billion (23%), and KRW 633 billion (14%) respectively, when compared to the 2003 totals.
The proportion of the company’s wireless Internet sales exceeded 20% of overall cellular service sales revenue in the 3rd quarter of 2004. In the 4th quarter of 2004, wireless Internet sales rose 16% to KRW 544 billion from KRW 470 billion in the 3rd quarter of 2004. This represented 23.9% of the company’s entire cellular service sales revenue. SK Telecom’s wireless Internet sales for 2004 stood at KRW 1.82 trillion, an increase of 38% over the previous year. This represented 20.6% of the company’s entire cellular service sales revenue, and was up 5.1% from one year earlier. This demonstrates that the wireless Internet service business has solidified its position as a growth engine for the company’s entire business sector.
Sales revenue increased 2% year on year despite the unfavorable market environment caused by excessive competition, the mobile number portability system introduced at the beginning of 2004, the adjustment of interconnection revenue rates (in July), and the lowering of cellular call rates (in September). However, due to an increase in marketing expenses, operating and net income came to KRW 2.36 trillion and KRW 1.49 trillion respectively, down 23% from the previous year. The marketing expenses for 2004 totaled KRW 1.86 trillion, an 18% increase over the year earlier. This represented 19.2% of the company’s total sales.
An SK Telecom official revealed that the primary factors causing the sharp increase in wireless Internet sales were the expansion of multi-function handset distribution, diversification of JUNE and NATE services, and the introduction of unlimited data usage rate plans.
The number of cellular service subscribers in 2004 reached 18.78 million, an increase of 470 thousand over the previous year. The monthly average revenue per user (ARPU) stood at KRW 43,542, a decrease of KRW 1,000 from the KRW 44,546 recorded in 2003. The monthly average call traffic volume per user (Minutes of Usage) came to 193 minutes, a 4 minute decrease from the 197 minute average in 2003.
Shin Bae Kim, president of SK Telecom said, "2004 was an extremely difficult year for us, primarily due to the mobile number portability system and adjustment of interconnection revenues. As we placed our utmost emphasis on maintaining high-quality subscribers as well as securing new subscribers, marketing expenses for the first half of 2004 increased and profits were reduced. However, the marketing expenses for the 3rd and 4th quarters of 2004 were lower by 24% and 15% respectively, over the prior two quarters of the same year."
SK Telecom achieved an operating income of KRW 594.40 billion and total sales of KRW 2.48 trillion, for the 4th quarter of 2004. The operating income decreased by 3%, and total sales increased by 2%, when compared to the 3rd quarter of 2004. In addition, the EBITDA margin totaled KRW 1.89 trillion, which was 5% above the 3rd quarter results.
The proportion of the company’s wireless Internet sales exceeded 20% of overall cellular service sales revenue in the 3rd quarter of 2004. In the 4th quarter of 2004, wireless Internet sales rose 16% to KRW 544 billion from KRW 470 billion in the 3rd quarter of 2004. This represented 23.9% of the company’s entire cellular service sales revenue. SK Telecom’s wireless Internet sales for 2004 stood at KRW 1.82 trillion, an increase of 38% over the previous year. This represented 20.6% of the company’s entire cellular service sales revenue, and was up 5.1% from one year earlier. This demonstrates that the wireless Internet service business has solidified its position as a growth engine for the company’s entire business sector.
Sales revenue increased 2% year on year despite the unfavorable market environment caused by excessive competition, the mobile number portability system introduced at the beginning of 2004, the adjustment of interconnection revenue rates (in July), and the lowering of cellular call rates (in September). However, due to an increase in marketing expenses, operating and net income came to KRW 2.36 trillion and KRW 1.49 trillion respectively, down 23% from the previous year. The marketing expenses for 2004 totaled KRW 1.86 trillion, an 18% increase over the year earlier. This represented 19.2% of the company’s total sales.
An SK Telecom official revealed that the primary factors causing the sharp increase in wireless Internet sales were the expansion of multi-function handset distribution, diversification of JUNE and NATE services, and the introduction of unlimited data usage rate plans.
The number of cellular service subscribers in 2004 reached 18.78 million, an increase of 470 thousand over the previous year. The monthly average revenue per user (ARPU) stood at KRW 43,542, a decrease of KRW 1,000 from the KRW 44,546 recorded in 2003. The monthly average call traffic volume per user (Minutes of Usage) came to 193 minutes, a 4 minute decrease from the 197 minute average in 2003.
Shin Bae Kim, president of SK Telecom said, "2004 was an extremely difficult year for us, primarily due to the mobile number portability system and adjustment of interconnection revenues. As we placed our utmost emphasis on maintaining high-quality subscribers as well as securing new subscribers, marketing expenses for the first half of 2004 increased and profits were reduced. However, the marketing expenses for the 3rd and 4th quarters of 2004 were lower by 24% and 15% respectively, over the prior two quarters of the same year."
SK Telecom achieved an operating income of KRW 594.40 billion and total sales of KRW 2.48 trillion, for the 4th quarter of 2004. The operating income decreased by 3%, and total sales increased by 2%, when compared to the 3rd quarter of 2004. In addition, the EBITDA margin totaled KRW 1.89 trillion, which was 5% above the 3rd quarter results.