SK Telecom
Tops 10 Trillion won in Sales

Inks an MOU on providing internet content services to Intel Viiv Technology

SK Telecom posted 10,161.1 billion won in sales during 2005, surpassing the 10 trillion won mark in sales for the first time in its corporate history. The company raked in 2,653.6 billion won in operating profit, a 25.2 percent surge over a year earlier and 1,871.4 billion won in net profit, a 12.5 percent jump.
Korea's largest telecom operator announced on January 24 that its sales for the 2005 fiscal year ended on December 31 were up 4.7 percent over 2004 due to a rise in the average revenue per user (ARPU) arising from a constant increase in subscribers and a rising number of mobile internet users. In particular, the company chalked up a 25.2 percent jump to 1,871.4 billion won in operating profit due to revenues arising from the disposal of its subsidiary SK Teletec.
The mobile internet sector witnessed sales except connection fees surge 34.9 percent to 2,459.2 billion won, accounting for 20.6 percent of total sales, up 6 percentage points over 2004. A record high of sales in the mobile internet sector was attributable to a brisk mobile internet usage stemming from augmentation of such content products as Melon and mobile Cyworld and other measures.
Marketing expenses dropped 5.9 percent to 1,750.1 billion won, or 17.2 percent of total sales. The figure was 0.2 percentage points lower from 19.2 percent in 2004 and was below the 2005 target of 18.5 percent. SK Telecom's clean marketing activities contributed to stabilizing the telecom market, analysts said.
The number of cellular service subscribers in 2005 reached 19.53 million, an increase of 750,000 over the previous year. The ARPU stood at 44,167 won, a growth of 625 won over the results a year earlier. This was largely due to an increase in data call volume brought about by the diversification of the wireless Internet services, and the strength in the high quality subscriber base. The monthly average call traffic volume per user (Minutes of Usage) was 197 minutes, a 3 minute increase over the 194 minute average in 2004. This robust subscriber base significantly accelerated the company's rapid progress toward achieving the ten billion plus mark in sales revenue in 2005.
"We will make the utmost effort to solidify our leadership in the wireless Internet market by continuing to rapidly introduce new upgraded wireless data services. In line with this, SK Telecom plans to release a commercial High-Speed Downlink Packet Access (HSDPA) service during the first half of 2006. We will also strengthen our global operations by maintaining a steady growth pattern in our penetration of overseas markets,"said Kim Shin-bae, president of SK Telecom.

TIES WITH INTEL ― SK Telecom and Intel Korea have signed an MOU for providing SK Telecom Internet content services to Intel Viiv Technology. SK Telecom has already provided Melon service to Intel Viiv technology which was launched January 10. New content products such as the latest movies from Cizle, games from GXG, and the mini-homepage of Cyworld will be included in this service.
Intel Viiv technology lets the customer enjoy music, movies, music video and games, through digital connected devices such as a TV, stereo, notebook computer, mobile phone, and portable media player. SK Telecom and Intel Korea will continue to cooperate in expanding MMS and web-to-phone services operating through new formats and more equipment.
"Through this affiliation, the content of SK Telecom will be expanded to PCs and TVs, thereby leaping over the boundaries of wired and wireless mobile devices. We will take the lead in developing 'multi-channel content'that will improve the user's ultimate convenience."Said Bang Hyung Lee, vice-president of SK Telecom's Business Group.
Don Macdonald, vice-president of, and head of Intel's Digital Home Group explained,
'Intel Viiv technology was developed to increase the scope of, and convenience in, operating digital home entertainment devices. Considering the Korean customers"penchant for spending more time using digital entertainment, Intel will keep broadening the range of options for entertainment content on demand which is adapted to Intel Viiv technology."He concluded by saying, "Intel will continue to put forth its best efforts to develop technology and services that will entertain Korean customers through simple and convenient methods of operation."
REORGANIZATION ― SK Telecom announced on January 20 that the company went through reorganization in an effort to ensure its growth platform's full response to the convergence business environment, and globalization trends. The organizational changes were specifically aimed at increasing managerial efficiency, and reinforcing the implementation capabilities of our global and convergent businesses. In particular, the company has strengthened management responsibilities by introducing unit system responsibility into each head business group.
Due to the modifications in the organizational structure, SK Telecom now consists of one business department, fifty-five divisions, seven groups, and three head groups. Previously the company was composed of fifty-five divisions, seven groups, and two head groups.
To enhance its global business implementation capability, SK Telecom established one new Global Business Office in the Business Group and one in Technology Group as well. These offices will play a role as pipelines designed to transfer the company's core competencies to global operations. In addition, SK Telecom established a "convergence Business Division"in the New Business Group, and a "Business Development Division"in the Business Group. These actions are aimed at strengthening our convergence business implementation capability. These two divisions will focus on the development of new multifaceted business opportunities in cooperation with the Technology Strategy Office in the Strategic Technology Group, and the Business Strategy Office in the Strategic Planning Group. nw