SK Telecom profit rises on one-off gain, revenue slides - Mobile World Live

SK Telecom profit rises on one-off gain, revenue slides

06 FEB 2017

South Korea’s largest mobile operator SK Telecom (SKT) reported a strong jump in profit last year on a one-off gain, but operating revenue declined slightly due mainly to the elimination of sign-up fees and lower interconnect rates.

The operator’s net income for 2016 increased 10.5 per cent year-on-year to KRW1.66 trillion ($1.47 billion), while EBITDA was down 2.1 per cent to KRW4.6 trillion. SKT said its net income was boosted by the sale of SK Planet’s stake in Loen Entertainment in Q1 2016.

Revenue last year declined 0.3 per cent to KRW17.1 trillion. Mobile service revenue fell 0.9 per cent to KRW10.8 trillion, while interconnect revenue in 2016 dropped 12.4 per cent to KRW656 billion after the government mandated a reduction in interconnection fees.

Mobile revenue in Q4 edged up 0.4 per cent quarter-on-quarter to KRW2.7 trillion, its first quarterly rise in a year, the company said.

Despite an increase in the number of customers selecting contract-based mobile fee discounts and the elimination of sign-up fees, the operator said its mobile network operation “sustained a steady performance backed by growth in LTE subscribers and mobile data usage per user”.

Its LTE base increased 11 per cent last year to 21.1 million, accounting for 71 per cent of its 29.6 million subscribers, which rose 3.4 per cent in 2016.

Its mobile navigation platform “T Map” now has more than 11.6 million subscribers.

Capex rose 3.8 per cent to KRW1.96 trillion as it nearly fulfilled its network deployment requirements, it said.

The operator said although its subsidiaries posted operating losses last year as they “experienced some growing pains while expanding their businesses bases”, its main subsidiaries SK Broadband and SK Planet have “already started to generate tangible results from their business development”.

SK Planet’s 2016 revenue increased 7.7 per cent year-on-year to KRW2.9 trillion. Its IPTV business grew 33 per cent to KRW844 billion.

Moody’s expects SKT’s revenue and earnings to be stable in 2017, as expenses drop and losses narrow at SK Planet.


Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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