SK Telecom's "Record High Sales" Amid 5G Price War...Operating Profit Down 7.6% (Update)

[Asia Economy Reporter Joeslgina] SK Telecom achieved its 'highest-ever' sales last year despite large-scale 5G investments and cutthroat competition. With the full-scale popularization of 5G this year, sales are expected to break the record again, reaching 19.2 trillion KRW.

SK Telecom announced on the 7th that in 2019, the first year of 5G commercialization (consolidated basis), it recorded sales of 17.7437 trillion KRW and operating profit of 1.11 trillion KRW. New growth sectors such as media and security drove the increase in performance, resulting in a 5.2% rise in total sales compared to the previous year. This is the highest on an annual basis.

Operating profit decreased by 7.6% compared to the previous year due to increased 5G network investments, including 5G frequency costs. Net profit also fell sharply to 861.9 billion KRW, down 72.5%, influenced by equity method gains from SK Hynix.

On a separate basis, SK Telecom’s annual sales recorded 11.4162 trillion KRW, down 2.5% from the previous year. The company expects sales to rebound this year as mobile phone sales have been rising since the second quarter of last year, supported by increasing data usage and 5G subscriber growth trends.

Subsidiary SK Broadband’s IPTV business sales (1.2985 trillion KRW) increased by 10.7% year-on-year as premium subscribers grew. Over the year, IPTV subscribers increased by 464,000, securing a cumulative subscriber base of 5.19 million.

Security businesses such as ADT Caps and SK Infosec also recorded growth, with sales of 1.1932 trillion KRW and operating profit of 153.5 billion KRW, up 17.4% and 21.9%, respectively. In the commerce business, 11st and SK Stoa succeeded in turning annual operating profits positive.

SK Telecom expects to set a new record by achieving sales of 19.2 trillion KRW this year, when 5G subscriber inflow is expected to accelerate.

In the mobile network operator (MNO) business, the company plans to strengthen 5G service competitiveness through 'super cooperation' with domestic and international operators and to concretize B2B models. The number of 5G subscribers, which stood at 2.08 million at the end of last year, is expected to increase to 6 to 7 million by the end of this year.

In the media business, the SK Broadband-T-Broad merged corporation, which has 8 million paid broadcasting subscribers as of the end of April, will be launched. WAVVE, a joint venture with the three major domestic broadcasters, plans to secure competitiveness by focusing on strengthening premium content capabilities such as original content production. In the security business, the company plans to expand integrated security products, unmanned parking, and home security based on synergy with the SK ICT family.

Yoon Poong-young, SK Telecom’s Chief Financial Officer (CFO), said, “This year, the MNO, which is making a leap forward, and new businesses will be the two major growth engines, and the company’s value will be re-evaluated in the market.”

This content was produced with the assistance of AI translation services.