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Press Release
SK Telecom achieved a net income of KRW 467.1 billion, an operating income of KRW 713.4 billion, and total sales of KRW 2.53 trillion for the second quarter of 2005. Net income and operating income were greater by 27% and 16% respectively, and total sal
The company expects to sustain steady growth in its wireless Internet business by recording KRW 10,419 in average revenue per user (ARPU), and reduce marketing expenses. This will establish a solid foundation for reaching our overall sales revenue targe
SK Telecom announced on July 25th that the company achieved a net income of KRW 467.1 billion, an operating income of KRW 713.4 billion, and total sales of KRW 2.53 trillion, for the 2nd quarter of 2005. Net income and operating income were higher by 27% and 16% respectively, and total sales revenue rose by 5% than that of the 1st quarter of 2005. Compared to the same period in 2004, net income and operating income increased 56% and 54% respectively, while the total sales figure was up by 6%.
An SK Telecom official revealed that the three-way number portability market that was launched in January of this year has stabilized as a whole. In this environment, the remarkable business results we achieved in the 2nd quarter have reconfirmed the market leadership position we have attained by bolstering our competitive edge in voice and data products.
Sales revenue rose 5% over the previous quarter, helped by an increase in call traffic volume due to the larger number of working days as well as wireless Internet revenue growth. In addition, total revenue increased by 6% over the same period last year thanks to the wireless Internet revenue rising by 43% on a quarter-on-quarter basis. This occurred despite a KRW 1,000 decrease in the monthly flat rate. Operating income stood at KRW 713.4 billion, a 16% increase over the previous quarter, and 54% compared to the same period last year. This growth is attributed to a wireless Internet revenue increase, and a decrease in overall expenses that followed the market stabilization.
Wireless Internet revenue stood at KRW 597 billion, up by 9% over the previous quarter of 2005, and a 43% increase over the same period last year. Wireless Internet ARPU rose due to the launching of new growth drivers such as the branching out into new combined wired and wireless services that include Melon, Mobile Cyworld, Sizzle, GXG, etc. Furthermore, SK Telecom channeled its energy into boosting wireless Internet services by introducing a broad range of fixed rate plans e.g. the data free rate plan. These are the main factors that explain the increase in wireless Internet revenue.
Due to the rise in advertising costs due to the launching of new services e.g. GXG and 1mm, the marketing expenses for the quarter came to KRW 442.2 billion. This was a 1% increase over those in the 1st quarter of 2005. However, with basic competitiveness-based efficient cost execution, the overall marketing expenses were 23% less than those of the same period last year. For the 2nd quarter, SK Telecom stayed below the Annual Guidance of 18.5% for marketing expenses by registering marketing expenses of 17.5% of overall sales revenues. This represented a 0.6% decrease from the 18.1% recorded in the previous quarter this year.
The company’s ARPU came to KRW 44,105, a 4% increase over the previous quarter, and up by 3% over the second quarter of last year. This was largely due to the fact that the wireless Internet ARPU rose by 8% over the 1st quarter this year, and 39% over the same period last year. This was in spite of the decrease in call fee revenue caused by the tariff reduction, as well as the decline in cellular service activation fees caused by the company’s clean marketing policies. The wireless Internet ARPU recorded KRW 10,419 in the 2nd quarter of 2005, demonstrating a steady growth pattern.
In addition, monthly minutes of usage (MOU) posted 196 minutes, up by 6% over the 1st quarter, and up by 1% compared to the same period last year. This demonstrates that SK Telecom’s subscriber base has been further strengthened.
Shin Bae Kim, president of SK Telecom commented, "There are concerns about the reality of continued growth in the mobile phone industry. However, we are laying a robust base for steady growth by conducting high quality retention strategies, and launching a vast array of services that fit customers’ ever-changing needs". He also stated, "The market stability under the three-way mobile number portability environment, and our efforts towards efficient expense reductions, were the primary factors for the improved business results we have enjoyed in the 2nd quarter of 2005"
An SK Telecom official revealed that the three-way number portability market that was launched in January of this year has stabilized as a whole. In this environment, the remarkable business results we achieved in the 2nd quarter have reconfirmed the market leadership position we have attained by bolstering our competitive edge in voice and data products.
Sales revenue rose 5% over the previous quarter, helped by an increase in call traffic volume due to the larger number of working days as well as wireless Internet revenue growth. In addition, total revenue increased by 6% over the same period last year thanks to the wireless Internet revenue rising by 43% on a quarter-on-quarter basis. This occurred despite a KRW 1,000 decrease in the monthly flat rate. Operating income stood at KRW 713.4 billion, a 16% increase over the previous quarter, and 54% compared to the same period last year. This growth is attributed to a wireless Internet revenue increase, and a decrease in overall expenses that followed the market stabilization.
Wireless Internet revenue stood at KRW 597 billion, up by 9% over the previous quarter of 2005, and a 43% increase over the same period last year. Wireless Internet ARPU rose due to the launching of new growth drivers such as the branching out into new combined wired and wireless services that include Melon, Mobile Cyworld, Sizzle, GXG, etc. Furthermore, SK Telecom channeled its energy into boosting wireless Internet services by introducing a broad range of fixed rate plans e.g. the data free rate plan. These are the main factors that explain the increase in wireless Internet revenue.
Due to the rise in advertising costs due to the launching of new services e.g. GXG and 1mm, the marketing expenses for the quarter came to KRW 442.2 billion. This was a 1% increase over those in the 1st quarter of 2005. However, with basic competitiveness-based efficient cost execution, the overall marketing expenses were 23% less than those of the same period last year. For the 2nd quarter, SK Telecom stayed below the Annual Guidance of 18.5% for marketing expenses by registering marketing expenses of 17.5% of overall sales revenues. This represented a 0.6% decrease from the 18.1% recorded in the previous quarter this year.
The company’s ARPU came to KRW 44,105, a 4% increase over the previous quarter, and up by 3% over the second quarter of last year. This was largely due to the fact that the wireless Internet ARPU rose by 8% over the 1st quarter this year, and 39% over the same period last year. This was in spite of the decrease in call fee revenue caused by the tariff reduction, as well as the decline in cellular service activation fees caused by the company’s clean marketing policies. The wireless Internet ARPU recorded KRW 10,419 in the 2nd quarter of 2005, demonstrating a steady growth pattern.
In addition, monthly minutes of usage (MOU) posted 196 minutes, up by 6% over the 1st quarter, and up by 1% compared to the same period last year. This demonstrates that SK Telecom’s subscriber base has been further strengthened.
Shin Bae Kim, president of SK Telecom commented, "There are concerns about the reality of continued growth in the mobile phone industry. However, we are laying a robust base for steady growth by conducting high quality retention strategies, and launching a vast array of services that fit customers’ ever-changing needs". He also stated, "The market stability under the three-way mobile number portability environment, and our efforts towards efficient expense reductions, were the primary factors for the improved business results we have enjoyed in the 2nd quarter of 2005"