SK Telecom’s net drops 18% on costs

SK Telecom Co., Korea's largest mobile operator, said Thursday that its third-quarter earnings dropped 18 percent from one year ago on increased spending on wireless networks.

Net profit reached 383.9 billion won ($339 million) in the July-September period, compared with 470.7 billion won a year ago, it said in a regulatory filing.

Sales inched up 2 percent on-year to 4.06 trillion won over the cited period, while operating income declined 17 percent to 531.4 billion won, it said.

Shares of SK Telecom were trading at 159,500 won on the Seoul bourse as of 11:46 a.m., down 1.24 percent from Wednesday's close.

Despite reduced marketing fees and higher wireless data sales from smartphone users, widened network investments and one-time costs from spinning off its mobile platform unit hurt its profit, SK Telecom said.

Its capital expenditure increased 15 percent from one year ago to 552.3 billion won.

SK Telecom expanded its third-generation wireless networks and built the high-speed fourth-generation networks called long-term evolution (LTE) to meet rising data demand from smartphone users.

SK Telecom spun off its mobile platform unit SK Planet this month in a bid to move faster in the quickly changing wireless market and it shelled out incentives to around 600 employees to encourage them to transfer to the wholly owned subsidiary, it added.

The company's profit also decreased due to the mobile rate cuts it adopted in September, coming under government pressure over high mobile fees putting a dent in household finances.

The company submitted a letter of intent in July for a 15 percent stake in Hynix Semiconductor Inc., the world's second-largest memory chipmaker, and remains the sole potential bidder.(Yonhap)