The Korea Herald


SK Telecom Q4 net jumps on growing LTE subscribers and new businesses

By KH디지털2

Published : Jan. 29, 2015 - 15:18

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SK Telecom Co., the country's top mobile operator, said Thursday its fourth-quarter earnings soared on an increased number of subscribers to its faster mobile Internet connection and a rise in sales from its business solution service.

Net profit came to 503.3 billion won (US$465 million) in the October-December period, up 71.4 percent from the 293.6 billion won tallied a year earlier, SK Telecom said in a regulatory filing. The figure, however, marks a 5.2 percent drop from the previous quarter.

Revenue fell 0.1 percent on-year to 4.28 trillion won, and operating profit also decreased 3.9 percent to 490 billion won over the cited period.

 For all of 2014, the company posted a net profit of 1.79 trillion won, up 11.8 percent from a year earlier. Its sales advanced 3.4 percent on-year to 17.16 trillion won while operating profit shed 9.2 percent to 1.82 trillion won.

The yearly results came in line with the median estimate of 1.76 trillion won suggested by South Korea's 13 brokerage houses, according to the data compiled by Yonhap Infomax, the financial news arm of Yonhap News Agency.

The securities firms surveyed had also predicted an average 17.3 trillion won in sales and 1.83 trillion won in operating profit for 2014.

SK Telecom said the decline in its fourth-quarter operating profits came as the company had abolished sign-up fees while expanding other benefits for subscribers.

The increase in the number of long-term evolution (LTE) users and rising returns from business-to-business solution services, however, supported its bottom line, it added.

The number of its LTE users came to 16.73 million, accounting for 58 percent of its combined subscribers.

While SK Telecom did not provide detailed figures, it said the revenue of the B2B solution division expanded 12.7 percent on-year in 2014.

SK Telecom said the country's announcement of the new retail law that is aimed at bringing transparency to the smartphone market had a limited impact on its marketing costs and overall performances.

"While the marketing costs slightly fell, this was attributable to the market's contraction in October, when the law was first implemented," SK Telecom said. "There was no significant impact from the new law."

The law went into effect at the start of October to bring transparency to the market, long distorted by subsidies handed out by manufacturers and carriers that are well over the limit set by law as they compete for customers.

The amount of subsidies had varied depending on time, shop, the location and the carrier, leaving customers to hunt for cheaper devices and subscription plans, and negotiate prices, which were usually unmarked.

Policy watchers have expected that the law would allow mobile carriers to cut unnecessary marketing costs and rather focus on improving service quality and a fair market environment.

SK Telecom said for 2015, it plans to expand its Internet-of-Things business and focus on developing new platforms that will connect business solutions and machines.

It will also seek to attract some 7 million subscribers of Internet Protocol TV services.

SK Telecom took up 50.01 percent of the South Korean market as of end-December, data compiled by the Ministry of Science, ICT and Future Planning showed, followed by KT Corp. with 30.29 percent and LG Uplus Inc. with 19.69 percent.

Shares of SK Telecom closed 0.53 percent lower Thursday at 284,000 won, nearly matching the broader KOSPI's 0.54 percent fall.

The earnings result was released during the trading session. (Yonhap)