SK Telecom Announces 2015 3Q Earnings Results
Via SK Telecom Media Center
Nov 3, 2015
- Revenue of KRW 4.261 trillion, operating income of KRW 490.6 billion and net income of KRW 381.8 billion (K-IFRS consolidated)
- Compared to the same period last year, the revenue decreased by 2.4% and operating income declined by 8.6% due to elimination of sign-up fees, reduced network interconnection revenue, and increased number of subscribers who receive contract-based fee discounts
- Plans to continue building its competitiveness in products and services, while accelerating the development of its next-generation platform business
All business performance figures are based on Korean International Financial Reporting Standards (K-IFRS).
SK Telecom (NYSE:SKM) today announced its earnings on a K-IFRS consolidated basis for the third quarter of 2015: revenue of KRW 4.261 trillion, operating income of KRW 490.6 billion and net income of KRW 381.8 billion.
The revenue stood at KRW 4.261 trillion, edging down 2.4% year-on-year (YoY) due to the elimination of sign-up fees, decreased network interconnection revenue caused by interconnection fee reduction, and increased number of subscribers who choose mobile fee discounts based on their contracts. Compared to the previous quarter, the revenue grew 0.1% backed by increased sales of its subsidiaries including SK Planet and SK Broadband.
The operating income dropped 8.6% YoY to KRW 490.6 billion due to decreased revenue. It grew 18.8% compared to the previous quarter, which was affected by one-off labor costs.
The net income went down by 28.1% YoY and 4.0% quarter-on-quarter (QoQ) caused by lower operating profit and reduced equity method gain from SK Hynix.
With the continuous spread of LTE services, as of the end of September 2015, the number of SK Telecom’s LTE subscribers marked 18.46 million, taking up over 64.8% of the company’s total mobile subscriber base. In addition, based on its competitiveness in products and services, the company continued to actively carry out marketing activities focused on strengthening benefits for its existing customers. As the result, SK Telecom’s customer churn rate for the third quarter marked 1.4%, the lowest level in the industry.
SK Telecom’s ‘Band Data’ plans launched in May 2015 have been attracting subscribers at a record pace: As of the end of the third quarter, Band Data plans have attracted over 4.79 million subscribers. Meanwhile, the company has also expanded the low and middle priced smartphone market by exclusively launching devices that are reasonably priced yet packed with premium features. Moreover, SK Telecom plans to secure a competitive edge by expanding products that meet the needs of many different customer segments. So far the company has launched ‘T Kids Phone,’ ‘T Outdoor’ and ‘T Pet.’
The company is providing differentiated membership benefits: Following the launch of the ‘Design it Yourself’ membership service in April 2015, it introduced ‘T Mania,’ a membership service that provides up to four times greater discounts/points to customers at affiliate stores. SK Telecom is currently holding an event called ‘Table 2015,’ where it selects – through big data analytics - and announces the 100 most popular restaurants in Korea and invites customers to dine at 50 of these restaurants.
Furthermore, SK Telecom is keen to accelerate its new growth strategy focusing on the three innovative Next-Generation Platforms namely ‘Lifestyle Enhancement Platform,’ ‘Advanced Media Platform,’ and ‘IoT Service Platform.’
Following its launch of the first Lifestyle Enhancement Platform that combines content, community and commerce services named ‘‘Club T Kids’ in July 2015, SK Telecom has introduced ‘Petween’ for pet lovers in October 2015. Equipped with useful features such as spam call filtering, web-based phone directory search and O2O services, ‘T Phone’ is establishing itself as an innovative dialer platform, attracting over 7 million users.
For its Advanced Media Platform, SK Telecom plans to make continuous efforts to integrate media-related capabilities of its subsidiaries and strengthen competitiveness in fixed and mobile media. The company will also expand its investment in innovative contents production by merging SK Broadband and CJ Hellovision as well as strengthening partnership and cooperation with CJ Corporation.
Regarding IoT Service Platform, the company launched an open smart home service in May 2015 and plans to increase the total number of its smart home-capable products to 25 within the end of this year, and to 45 by the first half of next year. SK Telecom has also broadened its smart home partnership. It is now working with 33 different companies, a jump from nine in May 2015.
“SK Telecom will continue to transform the telecommunication market competition paradigm by focusing on delivering greater benefits to our customers through strengthened competitiveness of our products and services,” said Lee Yong-hwan, Chief Financial Officer of SK Telecom. “At the same time, we will maximize the corporate value by aggressively promoting our next-generation platform business.”
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