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Press Release
SK Telecom achieved KRW 2.54 trillion in total sales, KRW 337.2 billion in net income and KRW 667.9 billion in operating income for the 1st quarter of 2006.
SK Telecom has already attained 24% of the 2006 total revenue target (KRW 10.5 trillion).
SK Telecom announced on April 27th that it achieved KRW 2.54 trillion in total sales, KRW 337.2 billion in net income and KRW 667.9 billion in operating income, for the 1st quarter of 2006. Total sales and operating income were higher by 5.3% and 8.7% respectively, and net income edged down by 8.5% when compared with the same period of 2005. When compared to the 4th quarter of 2005, total sales and net income were lower by 3.3% and 24.7% respectively, while the operating income figure was up by 2%.
Despite the offer of free Caller Identification (CID) Service starting last January, the company’s revenue for the first quarter of 2006 rose 5.3% year on year. This figure was helped by an increase in the number of subscribers, and wireless Internet sales. The company’s wireless Internet revenue for the lst quarter reached KRW 663.2 billion, an increase of 21.1% year-on-year. Much of this increase was due to the continuous growth of new services such as ?Phone Mail’, ’Melon’ and ’Mobile Cyworld’, as well as increased usage of the data flat rate plans. This brought the wireless Internet revenue up to 28.7% of total sales if interconnection fees are not included.
Operating income increased by 8.7% year on year and 2% quarter on quarter. Net income was lower by 8.5% year on year and 24.7% quarter on quarter, due to non-operating expenses caused by the interim payments of retirement allowances.
Marketing expenses for the quarter came to KRW 440.2 billion, a year-on-year increase of only 1%. This was due to SK Telecom’s efficient and flexible management of marketing expenses in order to fully respond to a changing market environment. As a percentage of sales revenue, the marketing expenses recorded 17.3%. This figure stayed comfortably below the year-on-year marketing expense rate of 18.1%.
The company’s average revenue per user (ARPU) stood at KRW 43,135, a 4.2% decrease over the previous quarter because of the reduction of working days and the offering of the free CID Service. However, ARPU increased by 1.4% year on year, backed by increased data call volume caused by the great popularity of wired and wireless combined services, as well as constant growth in the number of data flat rate users.
"Even though the first quarter is a slack season for mobile phone services, we have already attained 24% of our 2006 total revenue target (KRW 10.5 trillion). After the first quarter, SK Telecom plans to release new mobile services such as a commercial High-Speed Downlink Packet Access (HSDPA) service, and a Wibro service. These services will contribute a great deal to the increase of ARPU", said Sung Min Ha, CFO of SK Telecom. He also added "The government’s permission for a handset subsidy can temporally lead to an increase in our marketing expenses. However, we will do our utmost to stabilize the market through improved core competitiveness".
Despite the offer of free Caller Identification (CID) Service starting last January, the company’s revenue for the first quarter of 2006 rose 5.3% year on year. This figure was helped by an increase in the number of subscribers, and wireless Internet sales. The company’s wireless Internet revenue for the lst quarter reached KRW 663.2 billion, an increase of 21.1% year-on-year. Much of this increase was due to the continuous growth of new services such as ?Phone Mail’, ’Melon’ and ’Mobile Cyworld’, as well as increased usage of the data flat rate plans. This brought the wireless Internet revenue up to 28.7% of total sales if interconnection fees are not included.
Operating income increased by 8.7% year on year and 2% quarter on quarter. Net income was lower by 8.5% year on year and 24.7% quarter on quarter, due to non-operating expenses caused by the interim payments of retirement allowances.
Marketing expenses for the quarter came to KRW 440.2 billion, a year-on-year increase of only 1%. This was due to SK Telecom’s efficient and flexible management of marketing expenses in order to fully respond to a changing market environment. As a percentage of sales revenue, the marketing expenses recorded 17.3%. This figure stayed comfortably below the year-on-year marketing expense rate of 18.1%.
The company’s average revenue per user (ARPU) stood at KRW 43,135, a 4.2% decrease over the previous quarter because of the reduction of working days and the offering of the free CID Service. However, ARPU increased by 1.4% year on year, backed by increased data call volume caused by the great popularity of wired and wireless combined services, as well as constant growth in the number of data flat rate users.
"Even though the first quarter is a slack season for mobile phone services, we have already attained 24% of our 2006 total revenue target (KRW 10.5 trillion). After the first quarter, SK Telecom plans to release new mobile services such as a commercial High-Speed Downlink Packet Access (HSDPA) service, and a Wibro service. These services will contribute a great deal to the increase of ARPU", said Sung Min Ha, CFO of SK Telecom. He also added "The government’s permission for a handset subsidy can temporally lead to an increase in our marketing expenses. However, we will do our utmost to stabilize the market through improved core competitiveness".