SK Telecom's profit falls 22% on price cuts, lower mobile data use

Telecom Asia Staff
28 Jan 2009

Korean mobile SK Telecom's income declined 22% in 2008, falling to 1.27 trillion won ($918.8 million), due to price discounts, heavy infrastructure investment and sinking wireless internet revenue.

Revenue increased 3% overall to $8.39 billion, but wireless internet revenue fell 13% to $1.75 billion. Wireless internet's contribution to total revenue fell 4% to 23.4%, SKT said.

The company also spent a record $1.37 billion on network investment, particularly W-CDMA investment. Marketing expenses increased 7.3% to $2.20 billion thanks to "especially fierce" 3G competition in the first half of the year, the company said.

Total subscribers improved 5% to 23.03 million, but ARPU declined 3% overall because of "various discount plans" and an 18% fall in wireless internet ARPU. MOU remained relatively unchanged at an average of 200 per month.

SK Telecom CFO Dong-Hyun Jang pledged to turn around the company's wireless internet business.

"SK Telecom will increase the number of flat rate data plan subscribers to revitalize the wireless internet business and create a solid foundation for sustained growth," he said.

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