SK Telecom's
Spectacular Year

Facility investment should total 1.6 tln won this year

SK Telecom plans to make 10.5 trillion won in sales this year of which 29.5 percent came from the sale of wireless Internet, the company's president Kim Shin-bae said during a conference meeting on January 24.
The CEO went on to say that the marketing expense would be around 17.5 percent of total sales with EBDITDA(corporate tax, interest, and income before depreciation) targeted at 4.4 trillion won and facility investment 1.6 trillion won. He said 570 billion won would go to HSDPA and 170 billion won to the mobile Internet. He said these investments are meant to raise competitiveness of mobile phones and other core businesses in the convergence environment and sustain the expansion of the base for globalization.
President Kim, on shareholder share return, said this year's propensity for dividends will be raised to 40 percent of net income and buy out 200 billion won worth of the company's shares and next year's shareholder share return will be the same as this year. The company's propensity for dividends reached 35 percent last year. Kim also predicted that mobile phone subscribers would total 30.84 million this year of which 20 million would belong to SK Telecom. He also said the company will not cut the satellite DMB rates since it would be developed as a premium service facility.
On overseas operation plans, Kim said the U.S. mobile communication service subsidiary, HELIO, will launch its operation in earnest this year providing wireless Internet service all across the United States. The impact from the tie-up between KTF and NTT DoCoMo on the market would be negligible and not threatening to the company, he said, adding that the probe by the Fair Trade Commission on a possible bidding fix on SMS rates would not be a concern because of the absence of factors to fix the bidding.
On listing subsidiaries on the stock market, he said, no detailed plans on the short-term have been made on the plan yet. The initial public offering of SK Communications is being studied, but no firm decision has been made yet.
In the meantime, SK Telecom said its 2005 sales revenue amounted to 10.16 trillion won, up 4.7 percent from the preceding year with net profit totaling 1.87 trillion won, up 25.2 percent from 2004. Increased sales owed to the hike in the number of subscribers and the use frequency of the wireless Internet, boosting APPU, and the highest in its history. Net profit showed a large increase due to the sale proceeds of SK Teletech, amounted to 2.45 trillion won, up 34.9 percent from the previous year. The figure takes up 26.6 percent of total sales excluding contact fees, up 6 percent more than 20.6 percent increase recorded in 2004. The company, which saw the sale from the wireless Internet, hit the highest in its history due to strengthening of its content commodities including Mellon and mobile cyworld.
The marketing expense accounted for 17.2 percent of total sales, down 5.9 percent from the previous year. The increase in expense fell 2 percent compared to 19.2 percent recorded in 2004 and below the 18.5 percent projected for 2005. The situation is considered a result of the company's marketing effort that stabilized the market, company officials said.
The company's subscriber number totaled 19.53 million last year, an increase of 750,000 and APPU recorded 44,167 won, up 625 won from the previous year. Various indexes for customers made good showings, including MOU, which extended from 194 minutes in 2004 to 197 minutes last year, helping to expand the sales revenue to around 10 trillion won.
President Kim said the company will focus on expanding the wireless Internet market, data business in particular and strengthening global business operations for sustained growth. In the first half, the company will give the priority to commercial operation of the HSDPA, strong on data service. nw

SK Telecom President Kim Shin-bae.