[Shareholders Meeting] Park Jung-ho SK Telecom President "Subsidiary IPO Likely Delayed by 1 Year"

[Asia Economy Reporter Seulgina Jo] Park Jung-ho, CEO of SK Telecom, stated that major projects such as subsidiary initial public offerings (IPOs) could be delayed by about a year due to the impact of the novel coronavirus disease (COVID-19). As the negative effects of COVID-19 became apparent in key business sectors, the company has established a response system up to the third stage of the worst-case scenario.

On the morning of the 26th, at SK Telecom's 36th Annual General Meeting held at T Tower in Euljiro, Seoul, Park said, "We need to observe how the COVID-19 situation will unfold globally, but we expect more disruptions in the real economy than initially anticipated."

He explained, "Many of the investment plans through SK Hynix, including Toshiba, scheduled for the first half of the year, have been postponed to next year," adding, "(The subsidiary listing plans) could be deferred by a year." Previously, SK Telecom had identified SK Broadband, 11st, ADT Caps, One Store, and Wavve as candidates for IPOs.

Park expressed concern, saying, "The rapid spread of COVID-19 in Europe and the United States is shaking the economy on a massive scale. Global investment institutions are also predicting a recession. As daily life changes and businesses are affected, SK Telecom is not immune to these impacts."

He elaborated, "The roaming business, one of our core operations, has taken a significant hit. The security business, including ADT Caps which serves self-employed customers, has been affected by the increase in self-employed business closures and suspensions." Regarding commerce businesses like 11st, he added that while sales of daily necessities have increased, overall sales have declined due to reduced sales of travel and leisure products. Park's assessment is that the commerce sector is not free from the effects of COVID-19 either.

Park said, "We are considering up to the third worst-case scenario and are closely monitoring liquidity and profitability."

SK Telecom plans to use the COVID-19 crisis as an opportunity to introduce leading remote work practices and drive business innovation. Park emphasized, "We will take this opportunity to test and significantly strengthen the non-face-to-face and contactless marketing preparations we have been working on for a long time."

Park, who took office in 2017, was reappointed as an inside director at the shareholders' meeting and has entered the second management term with a three-year tenure.

Before discussing the agenda, Park highlighted the significance of the company's move beyond telecommunications over the past three years. He said, "We judged that the mobile network operator (MNO) sector was not receiving the public's affection, so we have pursued changes to be loved, such as improving roaming and launching contract plans that meet customer expectations," and evaluated, "We have also built a portfolio by advancing media, security, and commerce businesses, which are non-telecom sectors."

He continued, "The most meaningful part is that the non-telecom business division returned to profitability last year," expressing his determination to make this year the first year of achieving tangible results by focusing on the two pillars of the leading telecommunications business and the new ICT business.