Q1 Core Business and New Ventures Grow Together
Media, Converged Security, Commerce, etc.
Notable Year-on-Year Growth
[Asia Economy Reporter Cha Min-young] SK Telecom, the first among the three major mobile carriers to disclose its Q1 earnings, reported approximately KRW 4.8 trillion in revenue, a 7% increase year-on-year, driven by growth in both its core mobile network operator (MNO) and New ICT segments. Notably, operating profit rose by 29%, maintaining a solid performance trend.
On the 11th, SK Telecom announced that its consolidated financial statements for Q1 showed revenue of KRW 4,780.5 billion, operating profit of KRW 388.8 billion, and net profit of KRW 572 billion. Revenue and operating profit increased by 7.4% and 29%, respectively, compared to the same period last year. Net profit also surged 86.9%, influenced by equity method gains from SK Hynix.
New businesses such as media, security, and commerce drove revenue growth. Revenue from new business sectors rose 16.7% year-on-year to KRW 1,521.2 billion, while operating profit increased 64.1% to KRW 103.4 billion. The share of core new business revenue in total revenue also rose to 31.8%.
By segment, the media business saw revenue grow 17.6% year-on-year to KRW 967 billion, and operating profit nearly doubled, increasing 98.9% to KRW 75.4 billion, thanks to IPTV business growth and the effects of the T-broad merger.
SK Broadband established the multi-channel programming operator (MPP) ‘Media S’ in January to strengthen the media business value chain spanning content, channels, and platforms, and launched broadcasting last month. The comprehensive entertainment channel ‘Channel S’ under Media S collaborates with Kakao Entertainment and SM C&C to schedule 70% of its programs as self-produced exclusive content.
The online video service (OTT) Wave has been steadily enhancing its original content competitiveness by recently recruiting Chief Content Officer (CCO) Lee Chan-ho, who produced dramas such as ‘Misaeng’, ‘Goblin’, and ‘Secret Forest’.
The convergence security business (S&C business) changed its name from the existing security business to Safety & Care following the launch of the merged entity of ADT Caps and SK Infosec. Revenue and operating profit increased 20.3% and 9.4% year-on-year to KRW 350.5 billion and KRW 27.8 billion, respectively. ADT Caps plans to expand technology-based business models such as home security, convergence security, and cloud security, building on its growth in the security sector.
The commerce business, consisting of 11st and SK Stoa, recorded revenue of KRW 203.7 billion, a 7% increase year-on-year. Despite intensified market competition due to increased non-face-to-face consumption, the commerce division achieved both revenue growth and profit improvement compared to the same period last year. 11st is enhancing fulfillment services such as ‘Order Today, Arrive Tomorrow’ and strengthening collaborations with domestic and international brands.
T map Mobility, which received investment from Uber last year, secured an additional KRW 400 billion investment from financial investors, recognizing a corporate value of KRW 1.4 trillion. ‘WUTI’, jointly established by T map Mobility and Uber, plans to enhance consumer choice and support drivers’ revenue growth.
One Store has solidified its position as the ‘national representative app market’ with 11 consecutive quarters of transaction volume growth and plans to develop further by securing K-content intellectual property (IP) through a joint venture (JV) content studio with Yes24.
Core mobile communication revenue increased 1.9% year-on-year to KRW 2,980.7 billion. The 5G service, which marked its second year since commercialization, reached 6.74 million subscribers by the end of Q1. The company strengthened its lineup by launching new 5G plans in Q1 and introduced an online-only plan called the ‘Untact Plan’.
SK Telecom is also exploring consumer subscription services such as education, rental, and food & beverage (F&B). In the second half of the year, it plans to launch an integrated subscription service along with a new subscription marketing platform. The company intends to maintain investment at last year’s level to advance wired and wireless communication infrastructure and accelerate the early nationwide rollout of 5G.
Meanwhile, since announcing plans for a spin-off in April, SK Telecom has continued efforts to enhance shareholder value, including canceling treasury shares worth KRW 2.6 trillion, equivalent to 10.76% of total issued shares. The company plans to complete the spin-off within the year after board approval and shareholder meetings. The spin-off aims to establish an optimized structure and framework for wired and wireless communication businesses and new businesses, accelerating future growth.
Yoon Poong-young, SK Telecom’s Chief Financial Officer (CFO), stated, “We will complete the board decision-making process related to the spin-off within the first half of the year,” adding, “We will accelerate the growth of subsidiaries in the new business sector and maximize shareholder value.”
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