South Korea’s largest mobile operator SK Telecom (SKT) posted a jump in profit in Q1, despite a slight decrease in mobile revenue, as a result of cost-cutting measures and a one-off gain.

The operator’s net income during the quarter rose 29.3 per cent year-on-year to KRW572.3 billion ($500 million), due in large part to SK Planet’s sale of its stake in Loen Entertainment.

The elimination of sign-up fees and a rise in the number of subscribers choosing contract-based mobile discounts led to a one per cent drop in mobile revenue to KRW2.7 trillion. Its overall operating revenue was down 0.3 per cent to KRW4.23 trillion.

SKT’s operating expenses fell slightly year-on-year to KRW3.83 trillion, with marketing costs dropping 15 per cent to KRW717 billion and the cost of equipment down 13 per cent to KRW427 billion. Both were a result of the government’s push to reduce what it calls excessive subsidies.

Its capex also declined sharply during the quarter, down 91 per cent year-on-year and 76 per cent quarter-on-quarter to KRW78 billion.

ARPU edged up 0.3 per cent to KRW36,414 ($31.94) year-on-year but was down 0.7 per cent from the previous quarter.

LTE users now account for 67.5 per cent of its mobile subscriber base, up 5.3 percentage points from a year ago, after it expanded 4G connections 12 per cent to more than 19.5 million.

Smartphone penetration increased to nearly 73 per cent, as the number of smartphone users grew 6.2 per cent to more than 21 million.

Its mobile subscriber base rose 3.2 per cent from a year ago to 28.9 million.