SKT earnings soar 44% on back of media, security businesses
South Korea mobile leader SK Telecom has posted a 44% spike in third-quarter earnings, driven once again by non-core businesses.
It has announced net earnings of 395.7 billion won (US$352.0 million) on 3.7% higher revenue of 4.73 trillion won ($4.21 billion) after strong quarters from its media, security and e-commerce units.
The media group, which includes SK Broadband, streaming venture Wavve and its pay-TV business, was bolstered by the completion of the t-broad acquisition and some popular local TV series.
The media unit revenue grew 20% and operating income a healthy 79%. SKT's security unit grew 15.5% and the e-commerce group lifted revenue 18.7%.
CFO Yoon Poong-young said the company is planning to spin off its increasingly successful non-core businesses, with app store Onestore expected to list in the second half of next year.
He says it plans future IPOs for SK Broadband, security business ADT Caps, Wavve, e-commerce unit 11st, and its latest JV, a partnership with Uber called Tmap Mobility .
For the core mobile business it was another modest quarter, with operating income up 4.5% on tepid topline growth of 1.7%.
Despite adding another 915,000 5G subs – its best since first quarter after launch - the 18-month-old 5G business is yet to make an impact. Mobile ARPU of 30,051 won is actually down slightly on Q2 and 2% lower than a year ago.
It is set to fall again in 2021 after the company launches discount 5G plans to respond to price cuts by competitors.
Mix it up
Yoon told an earnings call Thursday the company was "reviewing and reorganizing" its 5G price plans.
He believes the lower prices, combined with the arrival of the iPhone and other new devices, will accelerate subscriber take-up, and although ARPU is likely to decline further, it will result in positive growth for the MNO business.
The operator reported 4.26 million 5G subs as at end-October. Yoon says it stands by its target of 6-7 million by year-end and 9 million by end-2021.
On the critical 5G enterprise side, SK Telecom has rolled out private networks for industrial giants such as SK Hynix, Samsung and Posco, and has created a 5G smart factory solution.
It is offering 5G-connected cloud services in partnership with AWS as well as developing its own, and plans to launch a 5G-based MEC service by year-end.
It also expects to open two new data centers in Seoul by mid-2021, with plans for further data centers underway.
- SK Telecom to spin off mobility biz and form JV with Uber
- South Korea pushes back against US pressure on Huawei – report
- South Korea sees 'sharp acceleration' in 5G demand
- SKT joins forces with Samsung, HPE, Intel on 5G NFV
- SKT grows operating income 11% thanks to media, commerce units
— Robert Clark, contributing editor, special to Light Reading