SK Telecom (SKT), the largest mobile operator in South Korea, continued to face downward pressure on mobile revenue as discounts caused a double-digit drop in ARPU in the final quarter of 2018, but strength in its expanding ICT businesses led to a gain overall.

The operator’s net profit for Q4 2018 rose 1.7 per cent year-on-year to KRW475 billion ($427 million), on consolidated revenue of KRW4.35 trillion, up 3.3 per cent.

Mobile service revenue fell 8.9 per cent to KRW2.45 trillion due the impact of government mandated tariff discounts, which pushed ARPU down 10.2 per cent to KRW31,328.

The weakness in its mobile business was offset by gains in its media and security units.

Reorganisation
Yoon Poong-Young, SK Telecom CFO, said it established the basic framework for its four main business areas – network operator, media, security and commerce – by reorganising its business portfolio in 2018, noting: “Based on competitiveness in 5G, SK Telecom will make all-out efforts to achieve tangible growth in new ICT business in 2019.”

IPTV revenue in Q4 increased 29.1 per cent to KRW374 billion as a result of growth in its subscriber base (70,000 additions in the quarter), paid content and a platform business. Its ADT Cap security business recorded 16.5 per cent year-on-year growth in 2018 (Q4 figures weren’t disclosed due to the reorganisation).

SKT said its e-commerce platform 11st, which was spun off from SK Planet in 2018, continued to improve its margins and targets to improve profitability through various partnerships with SK units.

The operator added 185,000 mobile subscribers in 2018 to take its total to 24.7 million at end-December. LTE penetration rose to 80.3 per cent at end-December from 75.7 per cent a year earlier.

Capex for the full year increased 13 per cent to KRW2.13 trillion.

SKT and rival operators simultaneously turned on their 5G networks on 1 December. The company said it plans to expand 5G service in the Seoul metropolitan area and major cities in time for the launch of 5G smartphones later this year.