SEOUL -- SK Telecom (NYSE:SKM) announced its earnings on a K-IFRS consolidated basis for year 2013: revenue of KRW 16.602 trillion, operating income of KRW 2.011 trillion and net income of KRW 1.610 trillion.
Despite expanded revenue-decreasing factors brought by the company’s year-round efforts to alleviate customers’ cost burden, including the launch of ‘T & T Sharing’ Plans which include unlimited in-net voice calls (Mar. 2013), the revenue increased by 2.9% year-on-year (YoY) backed by its strengthened leadership in LTE and growth of its new businesses including the enterprise solution business.
Based on its unrivalled LTE leadership, as of the end of 2013, SK Telecom has attracted 13.5 million LTE subscribers, which accounts for around 50% of its total mobile subscriber base. Sales of its enterprise solution business increased by 60% YoY to stand at KRW 434 billion, serving as a strong medium-term growth momentum for the company.
The operating income grew 16.2% YoY as diverse programs that offer benefits to long-term subscribers (including handset discount program and data refill service) successfully drove up profitability by reducing customer churn rate.
SK Telecom’s average churn rate for the year 2013 stood at 2.3%, decreasing by 0.3%p compared to that of the previous year. Moreover, quarterly churn rates continues to fall (2.1% in 4Q), proving the effectiveness of the company’s market stabilization efforts.
The consolidated net income for the year 2013 jumped 44.3% YoY backed by strong performance of its subsidiaries including SK Hynix. In 2013, SK Hynix recorded KRW 600 billion from the gain on valuation using the equity method of accounting.
Last year, SK Telecom has once again proven its differentiated network quality by successfully commercializing the world’s first LTE-Advanced service in June 2013, and led the market towards a service/product-oriented competition by introducing diverse plans and programs that increase customer benefits.
By achieving innovations in its mobile network operation business and promoting further growth in its new growth businesses, the company is determined to secure a stronger competitiveness, while maximizing customer value.
To this end, SK Telecom will enhance its network quality by launching “20MHz + 10MHz” LTE-Advanced service in the second half of 2014, while accelerating the development and application of diverse next-generation network technologies including LTE-Advanced 3 Band Carrier Aggregation. Moreover, the company plans to expand its product/service offerings by launching over 20 products in five core service categories namely Communication Platform, Home Service, Media Service, Entertainment Service and Security Service. In this context, SK Telecom has launched ‘T Phone,’ an All-IP communications platform, and ‘B Box,’ a home hub device on January 23, 2014.
Furthermore, ICT-based convergence business, one of the company’s three designated growth pillars, is expected to grow at a more rapid pace. Enterprise solution business, in particular, will solidify its competitiveness by developing solutions that combine the cloud and big data, while focusing on promoting smart work solutions that help enhance corporate productivity and green solutions designed to reduce energy consumption.
SK Telecom (Nasdaq: SKM)