SK Telecom earnings reel from data breach as LG Uplus posts solid performance

A person walks by an SK Telecom retail store in Seoul, June 29, 2025. News1

SK Telecom took a huge hit in its 2025 earnings as it continued to recover from the fallout of a major cybersecurity incident last April, while LG Uplus ended on a high note, logging solid growth across its mobile and infrastructure businesses.

SK Telecom reported a sharp drop, despite its growing momentum in artificial intelligence (AI). It announced Thursday that its net income for 2025 tumbled 73 percent to 375.1 billion won ($256.29 million), down from about 1.39 trillion won a year earlier. Operating profit slid 41.1 percent year-on-year to 1.07 trillion won, while revenue fell 4.7 percent to 17.1 trillion won.

The steep earnings drop underscores the damage from last year’s data breach and subsequent efforts to recover customer trust. The company explained that subscribers for its 5G mobile plan reached 17.49 million as of the end of last year, up about 230,000 from the third quarter.

"In 2025, our mobile network operator business focused on addressing changes to the business environment caused by the cybersecurity incident,” the company’s Chief Financial Officer Park Jong-seok said during the conference call.

He explained the company plans to deploy AI across all core telecom functions this year, including products, marketing, networks and distribution channels, to enhance customer experience and improve profitability.

“We aim to enhance our AI-based life-value modeling to deliver personalized offers, and to apply AI-driven automation across our networks from design and build through to operation,” he said.

While profits shrank, the company reported robust growth in its AI business as revenue from AI data centers rose 34.9 percent year-on-year to 519.9 billion won, driven by increased utilization rates at its sites in Seoul's southwestern Gasan area and in Yangju, Gyeonggi Province, and the addition of a new facility in Pangyo of Seongnam, Gyeonggi Province.

The company said it aims to further accelerate growth by scaling up with an additional data center in the Seoul region this year. It also plans to expand its data center solutions business and grow its submarine cable operations to create synergy with its AI data center portfolio.

SK Telecom's proprietary AI model, A.KX1, recently advanced to the second round of the government-led national AI foundation model project.

The company said the model, built to capture cultural nuance and deliver higher-quality answers in Korean, will give it an edge in the local AI market, noting it is expected to create business opportunities across both the business-to-consumer and business-to-business sectors.

LG Uplus' headquarters in Yongsan District, Seoul / Courtesy of LG Uplus

LG Uplus posted a 5.7 percent year-on-year increase in total revenue in 2025 to 15.45 trillion won, driven by a surge in mobile subscribers following data breach incidents at rival telecoms and continued expansion in its data infrastructure business.

The company said Thursday that its service revenue, which excludes handset sales, rose 3.5 percent to 12.26 trillion won, marking its highest growth rate in four years.

Operating profit climbed 3.4 percent from 2024 to 892.1 billion won, while net income jumped 61.9 percent to 509.2 billion won, mainly due to the absence of nonrecurring asset impairment losses at its subsidiary LG HelloVision, which had weighed on earnings in 2024.

“The company improved profitability by restructuring low-margin businesses and shifting its focus to core operations,” Chief Financial Officer Yeo Myung-hee said during an earnings conference call. “We also revamped our customer service operations around an AI contact center and accelerated efficiency gains through AI adoption across online and retail channels.”

The mobile segment remained the company’s largest growth driver. Revenue from the unit rose 3.7 percent year-on-year to 6.67 trillion won, supported by subscriber growth and improved customer satisfaction.

Total wireless subscribers, including mobile virtual network operator (MVNO) users, reached more than 30.71 million, up 7.7 percent from a year earlier. MVNO subscribers have increased by more than 10 percent annually for seven consecutive years, while mobile network operator subscriptions grew 6.6 percent.

Revenue from the enterprise infrastructure segment, which includes AI data centers, solutions and enterprise leased lines, increased 6 percent year-on-year to 1.81 trillion won. Growth was driven primarily by the AI data center business, which expanded 18.4 percent to 422 billion won.

The company said its entry into design, build and operate data center projects boosted performance, citing the completion of its Gasan data center last year. It plans to position its data center currently under construction in Paju, Gyeonggi Province, as a next-generation facility to support future growth in its colocation business.

“Customer demand for the new AI data center in Paju is already secured, and the company is actively considering a second-phase expansion as additional demand is expected,” an LG Uplus official said.

The company also plans to deepen collaboration with domestic and overseas financial investors to strengthen its market presence.

In its solutions business, LG Uplus plans to enhance its AI capabilities with new products, including Agentic Callbot Pro, set to launch this year, to help enterprise clients accelerate digital transformation and improve productivity.