SK Telecom (NYSE:SKM) announced its earnings for the first quarter of 2011: revenue of KRW 3.132 trillion, operating income of KRW 598 billion and net income of KRW 560.7 billion.

The revenue grew 2.7% year-on-year (YoY) backed by growth in smartphone subscribers but dropped 2.5% quarter-on-quarter (QoQ) due to fewer business days in the current quarter.

Operating income climbed 16.0% YoY and 8.6% QoQ helped by increased revenues and decreased marketing expenses as the company made aggressive efforts to stabilize the market. Net income jumped 35.7% YoY and 0.5% QoQ due to a one-time profit of KRW 152.5 billion on sale of its stake in SK C&C.

Marketing expenses went down 7.0% YoY, but up 5.7% QoQ to stand at KRW 785.4 billion, accounting for 25.1% of Q1 revenues. However, based on the government’s marketing cost calculation method, marketing expenses took up 23.8% of Q1 revenue. 

SK Telecom secured 6 million smartphone subscribers as of 4 May and expects to exceed its 10 million smartphone subscriber target by year-end by releasing both high-end and affordable smartphones.

The company raised 2011 CAPEX guidance from KRW 2 trillion to KRW 2.3 trillion to invest in 3G network and LTE so as to further strengthen its network competitiveness and expand network capacity.

According to the consolidated financial statement that factor the company’s subsidiaries into its aggregated accounting figure, SK Telecom recorded KRW 3.909 trillion in revenue, KRW 614.3 billion of operating profit and KRW 537.3 billion of net income.

SK Telecom’s CFO Ahn Seung-Yun said, "SK Telecom continues to maintain its leadership position in the mobile Internet market by launching Korea’s first LTE network trial in April and further strengthens its competitive edge in quality and service. SK Telecom will constantly identify and promote high-potential business opportunities while focusing on its existing growth engines like commerce and T Store."