SK Telecom (SKT), the largest operator in South Korea, booked solid mobile revenue gains in Q1 on the back of 5G subscriber growth and increased data usage, but its profit took a hit due to higher capex.
The operator ended March with 2.65 million 5G subscribers, up from 2.22 million at end-2019 (the service launched in April 2019, so annual comparisons aren’t yet available).
SKT said it plans to introduce specialised next-generation services including cloud games and AR/VR services, and strengthen its marketing activities on 5G clusters, where customers can experience those amenities.
Mobile service revenue rose 4.4 per cent to KRW2.48 trillion ($2.02 billion). The increase came despite a decline in international roaming revenue and slower growth across the industry caused by the Covid-19 (coronavirus) pandemic, the company said.
Total mobile subscribers rose 4.4 per cent to 28.75 million: ARPU increased 1.9 per cent to KRW30,777.
Net profit fell 17.9 per cent to KRW306.8 billion as a result of increased 5G network investment costs including spectrum licensing fees, along with lower equity gains from semiconductor company SK Hynix, (though it overturned a loss from the closing quarter of 2019).
Consolidated revenue rose 2.7 per cent to KRW4.45 trillion, backed by gains in its mobile, broadband, security and new businesses.
In a statement, SKT CFO Yoon Poong-young said: “Over the past three years, we have diversified our business portfolio centred on mobile communication, media, security and commerce to attain sustainable long-term growth. We will successfully navigate through the current crisis by achieving balanced growth of our four main business areas.”
Broadband revenue increased 8.2 per cent to KRW823.5 billion. Its security business grew 5.4 per cent to KRW291.4 billion, while commerce decreased 4.5 per cent due to new accounting standards, but grew 3 per cent when excluding the effects of those.