Seoul, Korea, 26 July 2007- Shin Bae Kim, CEO of SK Telecom, (www.sktelecom.com) announced the following results for the first quarter of 2007 - Gross revenue of KRW2.7117 trillion, with operating income of KRW662 billion, and net income of KRW396.3 billion. Revenue and net income increased by 6.7% and 17.5% respectively Over the same period last year, while operating income was lower by 0.9%. When compared to the previous quarter, revenue recorded a 1.7% decrease while net income and operating income increased by 41.9% and 22.8% respectively.

Despite a reduction in wireless Internet service rates in January 2007, revenue was up 6.7% over the same period of last year. This was due to a steady growth in subscribers.

Backed by an increase in the number of data flat rate subscribers and introduction of upgraded wireless Internet services that enhanced search functions. Revenue from the Wireless Internet Unit grew to KRW676.9 billion, a 2.1% quarter-on-quarter increase.

Wireless Internet revenue accounted for 27.6% of the total revenue when network interconnection fees are excluded. Much of this increase confirms that SK Telecom’s wireless Internet services achieved sustainable growth despite the lowering of service rates by 30%.

In spite of the revenue growth, operating income was lower by 0.9% when compared with the same period last year due to the increase in marketing expenses that brought a rise in new subscribers. However, it increased by 22.8% when compared to the previous quarter. This was a result of the efficient use of marketing expenses and a reduction of handset changing by subscribers. Net income rose by 41.9% over the previous quarter, and by 17.5% quarter-on-quarter. This was due to the reduction of equity share losses during the previous quarter, and a decrease in temporary expenses followed by a change in the severance payment system in the same period last year.

Marketing expenses came to KRW586.6 billion, decreasing 7.7% over the previous quarter, and increasing 33.3% from the same period of a year earlier. This increase was due to the initiation of a handset subsidy starting at the end of March 2006. The 7.7% decrease is attributed to efficient marketing activities that focused on new subscribers in the first quarter of this year. Marketing expenses stood at 21.6% of total revenue.

Backed by the increase in new subscribers and increasing demands for wired and wireless combined services, ARPU (monthly average revenue per user) grew 2% from the same period  last year to KRW44,142. However, it was lower by 3% than the previous quarter, due to seasonal factors and the lowering of wireless Internet service rates.

“SK Telecom will stay focused on satisfying our customers’ diverse needs through a dual network strategy that concentrates on the already-proved CDMA network and the cutting-edge service-enabled WCDMA network. Recognizing that competition will be intensified throughout the telecommunications arena due to the introduction of combined service packages and HSDPA service, we will make concerted efforts to achieve sustainable growth based on accumulated service operating know-how,” said SK Telecom’s CFO Sung-Min Ha.