[Concall] SK Telecom "Reevaluating Business Plan Due to COVID-19... Turnaround Timing Becomes Difficult to Predict"

[Asia Economy Reporter Seulgina Cho] SK Telecom announced that it has become even more difficult to predict the turnaround timing for the mobile network operator (MNO) segment due to the impact of the novel coronavirus disease (COVID-19). The forecast for 5G subscriber numbers this year is expected to remain 10-15% lower than initially anticipated.

Yoon Poong-young, SK Telecom’s Chief Financial Officer (CFO), stated during a conference call held after the Q1 earnings announcement on the 7th, "We are currently reviewing our management plans due to economic uncertainties caused by COVID-19."

CFO Yoon added, "It is true that it has become harder to predict the turnaround timing than originally expected due to factors such as the slowdown in 5G subscriber growth and a decline in roaming revenue," but he also mentioned, "The number of 5G subscribers this year is projected to be 10-15% lower than the 6 to 7 million expected last year."

However, he explained, "Data traffic is steadily increasing, and the market stabilization trend is expected to continue," adding, "We are making company-wide efforts to reduce non-essential costs, and if the COVID-19 situation stabilizes early, there will be little impact on the overall MNO situation."

In response to another related question, he emphasized, "We will strive to achieve a turnaround in the second half of the year through investment execution efficiency." He also added, "Regarding subsidiaries’ performance outside of MNO, we expect improvements compared to the previous year."

Regarding recent concerns about market overheating, such as Galaxy S20 devices being sold at prices in the 100,000 won range, CFO Yoon evaluated, "The market overheating has stabilized since Q4 last year, and this trend has not changed. Recently, the impact of COVID-19 has caused a decrease in device demand, and there were temporary promotions for specific models during certain periods."

Meanwhile, SK Telecom, the first among the three major domestic telecom companies to announce Q1 earnings, posted quarterly results of 4.4504 trillion won in revenue and 302 billion won in operating profit.

Growth continued mainly in new growth sectors such as media and security, with revenue increasing 2.7% year-on-year. However, operating profit decreased by 6.4% due to ongoing 5G investment burdens combined with the COVID-19 shock. Net profit for the period recorded 306.8 billion won, down 17.9%, influenced by equity method gains from SK Hynix.

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