SKT's Q3 profit down on Note 7 trouble

By Yoon Sung-won

SK Telecom said Thursday it posted 424.3 billion won in operating profit in the third quarter, down 13.5 percent from a year ago, largely due to the discontinued sale of Samsung Electronics Galaxy Note 7.

The nation’s largest telecom company pledged to concentrate on boosting its artificial intelligence (AI) and the Internet of Things (IoT) services businesses in the coming quarters.

“We expect that our strategy to fully open up major platforms including T Map and T Phone will lead to a successful outcome in the mid-to long-term,” said SK Telecom Chief Financial Officer and head of strategy and planning division Hwang Keun-joo said. “SK Telecom will accelerate its transformation into a next-generation platform company and keep developing customer-oriented products and services.”

According to its regulatory filing, Thursday, SK Telecom said it recorded 4.24 trillion won in sales, down 0.4 percent from last year’s 4.26 trillion won. Its net profit stood at 322.1 billion won in the quarter, down 15.6 percent year-on-year.

The telecom company’s average revenue per user (ARPU), one of the key indexes for a mobile carrier’s profitability, was 35,471 won in the third quarter, also down 2.1 percent from a year ago.

Besides the aftermath of Note 7 issue, SK Telecom has also suffered from overall contraction of the domestic telecom market as well as increase in the number of subscribers who applied for the government’s monthly fee discount program.

Despite the sales and profit deterioration in the telecom sector, the company has performed relatively well in non-telecom sectors.

Its mobile navigation service T Map topped with 9.18 million users as of September 2016, overwhelming similar services available in the domestic market. The company attributed to the sharp growth in the number of T Map users to the opening of the service free of charge to subscribers of other mobile carriers ― KT and LG Uplus ― starting July.

SK Telecom’s voice call platform service T Phone has also drawn over 100 million users as of August. The company has opened this service to non-SK Telecom subscribers since July, too.

SK Telecom’s cable business affiliate SK Broadband has added a total of 390,000 internet protocol television (IPTV) service subscribers, which is the largest increase among all IPTV providers in Korea. Its e-commerce affiliate SK Planet has also maintained the top perch in terms of the number of visitors to its online shopping service “11st Street” in the quarter, the company said.