SK Telecom has reported a 4.4% year on year decline in revenue for the second quarter, blaming an earnings decrease across South Korea's mobile industry arising from regulatory changes.
The operator reported revenue for the June quarter of 4.154 trillion won ($3.72 billion). Operating profit meanwhile fell 18% year-on-year to 346.9 billion won.
SK Telecom attributed the declines to the recent government mandated order to increase the selective discount provided to lower-income consumers from 20% to 25%.
A rise in the number of selective discount subscribers, additional discounts for the underprivileged and compensation money paid out for service disconnection all also contributed to the decline in earnings for the nation's mobile communications sector.
But SK Telecom's total profit for the quarter climbed 47.3% to 914.3 million won as a result of a strong performance at chipmaker division SK Hynix.
During the quarter, SK Telecom's churn rate fell to a record low of 1.2%. The company also reported a 25.1% increase in IPTV revenue to 306 billion won due to strong interest in its Oksusu mobile media platform, and made progress with its forays into diversified areas such as AI and e-commerce.
“To ensure sustainable long-term growth, we will revamp the telecommunications industry’s business structure and takeoff as a comprehensive ICT company, bringing about fundamental changes in the overall business structure,” SK Telecom EVP Ryu Young-Sang said.