SK Telecom posts quarterly earnings jump

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SEOUL -- SK Telecom, Korea's top mobile phone service provider, posted a 7.7% year-to-year rise in April-June earnings Thursday, to 2.843 trillion won ($3.10 billion), on steady subscriber growth and mobile Internet service revenues.

SKT boasts more than 20 million subscribers, or more than half of Korea's fiercely competitive wireless communications market, and owns such major media companies as iHQ, Korea's leading talent management company, which also makes movies, TV, music and online games.

SKT said that the second consecutive rise in quarterly earnings offset the loss of revenue due to a reduction in wireless Internet rates charged subscribers.

Aggressive competition with Korea's No. 2 mobile service provider, KTF, caused SKT's marketing costs to rise to $764.2 million in the second quarter, up 17.3% from the same period a year ago, and a jump of 19.9% from the January-March period this year.

Established in 1984, SKT bought a controlling stake in iHQ in March 2005, gaining a controlling share of the film production and distribution house Chungeorahm Film and cable TV network YTN Media.

Reiterating SKT plans to expand further into media and possibly into investment and distribution, CFO Sung-Min Ha said: "We will deliver greater customer benefits by diversifying our product portfolio to expand to cable TV programs and more. We will launch a combined mobile and high-speed Internet product under the partnership with fixed-line broadcasting networks."

Korean shares in SK Telecom, with a market value of $19 billion, rose 0.7% to end the day at 217,000 won, beating a 2% drop in the wider market. SKT's shares also are listed on the New York Stock Exchange.
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