SK Telecom sees profit decline 13 percent in Q3

By Kim Yoo-chul

SK Telecom, the nation's top mobile carrier, has reported a disappointing quarterly result in the third quarter due to an increase in marketing costs and more investment in network expansion.

The firm's net profit during the July to Sept. period dropped by 13 percent to 363.9 billion won from a year earlier.

Operating profit declined by 16.1 percent to 51 billion won, while quarterly sales increased by 4.1 percent to 3.18 trillion won, SK said in a regulatory filing, Thursday.

SK said its marketing costs rose by 1.5 percent to 750 billion won. SK is promoting marketing to better compete with Apple’s latest iPhone 4.

``It’s highly uncertain over the fourth quarter outlook as SK is being pressured to spend more on marketing to compete with Apple’s tablet PC _ iPad _ by selling more of Samsung’s Galaxy Tab tablet PCs,’’ said an SK Telecom official.

The Korea Communications Commission (KCC), the nation’s top telecommunication regulator, earlier set guidelines for telecom carriers to limit marketing costs to 22 percent of total revenue in 2010 and about 20 percent from next year.

SK’s marketing expenses accounted for 24 percent of its total sales, according to company spokeswoman Cindy Kang.