• Revenue of KRW 4.267 trillion, operating income of KRW 407.4 billion and net income of KRW 291 billion (K-IFRS consolidated)
• The revenue increased by 0.3% YoY backed by increased sales of its subsidiaries
• The operating income edged down by 1.3% compared to the same period last year affected by expanded expenses caused by growth in subsidiaries’ business activities
• The net income decreased by 26.9% YoY due to reduced equity method gain from SK Hynix
• Increased CAPEX guidance for 2016 from KRW 2.0 trillion to KRW 2.1 trillion
• Continues its efforts to shape into a platform company by opening up its major products/services including T Map, and rolling out nationwide IoT networks

※ All business performance figures are based on Korean International Financial Reporting Standards (K-IFRS).

SK Telecom (NYSE:SKM) today announced its earnings on a K-IFRS consolidated basis for the second quarter of 2016: revenue of KRW 4.267 trillion, operating income of KRW 407.4 billion and net income of KRW 291billion.

Despite the elimination of sign-up fees and increased number of subscribers who choose contract-based mobile fee discounts, the revenue increased by 0.3% year-on-year(YoY) to KRW 4.267 trillion backed by increased sales of its subsidiaries including SK Broadband.

The operating income dropped 1.3% YoY to KRW 407.4 billion affected by increased expenses caused by growth in business activities of its subsidiaries including SK Planet.

Compared to the same period last year, the net income decreased by 26.9% to stand at KRW 291 billion due to reduced equity method gain from SK Hynix.

As of the end of June 2016, the number of SK Telecom’s LTE subscribers marked 20.03 million, taking up over 68.7% of the company’s total mobile subscriber base.

SK Telecom has secured a pair of bandwidth blocs (10MHz bandwidth + 20MHz bandwidth) in the 2.6 GHz band at the spectrum auction held in Korea on May 2, 2016. The company plans to actively roll-out LTE network using the 30MHz bandwidth in the 2.6GHz band, covering Seoul and six metropolitan cities by the end of 2016, main areas of 85 cities nationwide by the end of 2017, and all areas of the 85 cities by the end of 2018 (The nationwide network will cover over 90 percent of the population).

Moreover, SK Telecom has finished building LoRaWAN across the country by end of June, covering 99 percent of the population. The company had also completed nationwide LTE-M rollout in March, 2016. By becoming the world’s first operator to secure nationwide coverage for both LTE-M and LoRaWAN, the two main pillars of the IoT network, SK Telecom said that it is now fully ready to create valuable business opportunities in the IoT era.

SK Telecom also increased its CAPEX guidance for the year 2016 from KRW 2 trillion (announced in February 2016) to KRW 2.1 trillion.

On July 19, 2016, SK Telecom has converted its mobile navigation service ‘T Map’ into a free service for subscribers of other Korean mobile carriers. The company expects the opening up of T Map to serve as a stepping stone for expanding new growth businesses such as IoT platform, Connected Car and electric vehicle. In December 2015, the company has opened up ‘T Phone, an integrated call platform to non-SK Telecom subscribers.

“Our decision to fully open up major products and services including T Map is a testament to our strong determination to transform into a platform company,” said Hwang Keun-joo, CFO and Head of Strategy and Planning Division at SK Telecom. “Based on our efforts in the field of platform business, coupled with our unrivalled leadership in mobile telecommunications, we will continue to increase value for all stakeholders.”

Summary and Comparison of Consolidated Income Statement

 (K-IFRS Consolidated Financial Statement, Unit: KRW 1 Billion)  

Summary of ARPU

 (Unit: KRW)

* Billing ARPU (excluding sign-up fees from mobile service revenues)