Performance results of 1.708 trillion won in operating profit and 1.5159 trillion won in net profit

SK Telecom announced on the 2nd that, based on consolidated financial statements under International Financial Reporting Standards (K-IFRS), it recorded annual revenue of 17.1367 trillion won, operating profit of 1.708 trillion won, and net profit of 1.5159 trillion won in 2015.

Despite strong performance by subsidiaries, sales decreased by 0.2% compared to the previous year due to a decrease in network access revenue resulting from the reduction in interconnection rates, the abolition of subscription fees, and the impact of selective contract discounts.

Operating profit decreased by 6.4% year-on-year due to the reflection of one-time personnel costs resulting from the implementation of a special early retirement program and increased general expenses caused by the expansion of business activities at subsidiaries. Net profit recorded 1.5159 trillion won, a 15.8% decrease year-on-year, due to the impact of a decline in equity method income from SK Hynix.

2015, Strengthening the Competitiveness of the Mobile Telecommunications Business

SK Telecom has devoted itself to further solidifying the competitiveness of its core MNO (mobile telecommunications business) and laying the foundation for securing new growth engines in the next-generation platform sector in order to overcome the crisis of stagnation in the telecommunications market.

As of the end of December 2015, LTE subscribers numbered 18.98 million, accounting for 66.3% of total subscribers.

The 'Band Data Plan' introduced by SK Telecom last May has established itself as a representative plan of the data era, recording approximately 7 million subscribers as of the end of the fourth quarter. In addition, the success of SK Telecom's exclusive phone, 'Luna,' is evaluated as a success in targeting niche markets, such as leading the trend of practical mid-to-low-priced devices.

SK Telecom's average churn rate last year was 1.5%. This is attributed to the effectiveness of enhanced benefits for long-term customers and efforts to stabilize the market.

SK Telecom has also officially launched services that will serve as the cornerstone for platform-specific growth, focusing on lifestyle value, media, and IoT sectors, moving beyond the MNO business.

The cumulative number of subscribers for various segment products, such as T Kids Phone and T Outdoor, has exceeded 600,000, and based on this, we plan to strengthen integration with the lifestyle value platform in the future. 'T Phone' has established itself as an innovative calling platform, surpassing 7 million users.

SK Telecom is accelerating the strengthening of its media platform through the pursuit of the acquisition of CJ HelloVision and is securing a foundation for future growth by maximizing synergies among its affiliates' media businesses.

In the IoT platform sector, it was the first telecommunications company to commercialize an open smart home service and, as of the end of 2015, partnered with 34 companies to introduce 25 models.

2016, Strengthening the competitiveness of wired and wireless media services and creating an ecosystem

SK Telecom plans to actively pursue performance improvement by maintaining its firm market leadership while operating products and services that are proactive and flexible in response to market changes. In addition, the strategy is to concentrate company-wide capabilities on strengthening the next-generation platform business for sustainable growth.

SK Telecom plans to proactively launch integrated products designed to maximize customer value, including strengthened exclusive device lineups following 'Luna' and 'Sol,' as well as rate plans and partnership products. Through the next-generation platform business it has been pursuing in earnest since last year, SK Telecom plans to generate tangible results starting this year by providing customer-oriented content and services.

In the media platform business, SK Telecom plans to accelerate the strengthening of its wired and wireless media service competitiveness and the fostering of its ecosystem through the acquisition of CJ HelloVision. In addition, it plans to accelerate its transformation into a leading integrated media platform operator by responding to the spread of high-quality media content consumption and the changing trends of the media industry toward personalization through 'oksusu,' a mobile media platform successfully launched last January.

The home IoT market has seen the emergence of various services and products since last year, and competition is expected to intensify starting this year with the full-scale expansion of users and the popularization of services.

SK Telecom plans to expand the number of home products compatible with IoT services to over 70 models by the end of the year and collaborate with more than 50 partners. In addition, the company plans to focus on generating differentiated performance by expanding beyond the smart home sector to connected cars, energy, security, and public services.

SK Telecom is strengthening its growth engine based on a lifestyle value platform by combining its existing MNO-based competitiveness with the capabilities of SK Planet. Last December, SK Telecom announced plans to restructure SK Planet's business structure to strengthen the framework for driving the growth of its next-generation platform business. We plan to analyze the needs and consumption patterns of actual segment product subscribers to strengthen the lineup of products and services that integrate optimal content, community, and commerce.

SK Telecom’s Head of Strategic Planning, Hwang Geun-ju, stated, “Last year was a year focused on securing new growth engines amidst economic uncertainties such as the stagnation of the telecommunications industry and subscriber saturation,” adding, “This year, we will lead the creation of tangible results in the next-generation platform business sector that generates new customer value based on telecommunications.”