SK Telecom has reported a 3.7% decline in consolidated revenue for 2018 to 16.87 trillion won, largely as a result of increased spending on customer retention.
The operator meanwhile reported a 21.8% slump in operating income for the quarter to 1.2 trillion won, but consolidated net income grew by 17.9% to 1.54 trillion yuan as a result of a record performance at chipmaker subsidiary SK Hynix.
SK Telecom attributed the declines in part to a rise in the number of subscribers to the operator's selective contract discount plans – provided to lower-income customers – as well as spending associated with its eight-pillared plan to enhance customer value.
These measures include offering price plan recommendations, addressing roaming costs, introducing a membership program and other such initiatives.
The strategy is showing signs of paying off, with SK Telecom recording 185,000 net mobile additions for the year as well as a record low churn rate of 1.22%, or 0.99% excluding MVNO operations.
In an earnings release, SK Telecom said it plans to drive earnings growth in 2019 by launching full-fledged 5G services covering the operator's initial 5G footprint in parts of Seoul and other major cities, and by growing its new ICT business in areas including media, security and commerce.
SK Telecom has established the basic framework for its four main business areas - MNO, media, security and commerce - by successfully reorganizing the New ICT business portfolio last year,” SK Telecom CFO Yoon Poong-Young said.
“Based on unmatched competitiveness in 5G, SK Telecom will make all-out efforts to achieve tangible growth in [the] New ICT Business in 2019.”