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LTE uptake bolsters SKT’s annual turnover

5 Feb 2013

SK Telecom (SKT), South Korea’s largest mobile operator in terms of subscribers, has released its financial and operational results for the twelve months ended 31 December 2012. Having posted a 2.3% year-on-year increase in consolidated revenue for the year to KRW16.30 trillion (USD14.4 billion), SKT noted that this result stemmed from the continued growth in LTE subscriber numbers, while it also pointed to improved sales at subsidiaries including SK Broadband. Operating revenues for SKT’s mobile operations, however, fell by 1.7% to KRW12.333 million, with the company highlighting declines resulting from enforced reductions in interconnection rates during the year as a notable factor. The cellco did meanwhile note that it had actually registered revenue growth in the last quarter of 2012; in the three-month period it generated turnover of KRW3.16 trillion, up from KRW3.01 trillion in the same period of 2011. With SKT attributing the growth in 4Q12 in part to increased LTE subscriptions, it also noted that its 4G offerings are helping to increase average revenue per user (ARPU). Despite ARPU having fallen by half a percentage point in FY2012, in the last quarter of the year the cellco reported a 2.3% increase, to KRW41.2, the third quarter in a row that ARPU had risen.

Operating income in FY12 meanwhile decreased, and which was the result of tariff cuts made in September 2011 and increased costs related to the acquisition of LTE subscribers. In the year ended 31 December 2012, SKT recorded a consolidated operating income of KRW1.76 trillion, while consolidated net profit for the year stood at KRW1.12 trillion, down from KRW1.58 trillion in 2011.

In terms of subscribers, at 31 December 2012 SKT’s total mobile accesses numbered 26.961 million, representing a 1.5% year-on-year increase. Of that total, 7.53 million were signed up to the operator’s LTE service, a more than ten-fold increase compared to the 634,000 4G subscribers it had at end-2011.

South Korea, SK Telecom (SKT)

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