Loss of More Than 650,000 Subscribers
Surge in Costs Due to Customer Compensation Measures
SK Telecom announced on the 5th that on a consolidated basis, last year's results came in at 17.0992 trillion won in revenue and 1.0732 trillion won in operating profit, down 4.7% and 41.1%, respectively, from the same period a year earlier.
During the same period, net profit also fell 73.0% year-on-year to 375.1 billion won. On a separate basis, revenue was tallied at 12.0511 trillion won and operating profit at 811.8 billion won.
In the fourth quarter of last year, operating profit was 119.1 billion won, a decrease of 53.1% from the same period a year earlier. Over the same period, revenue and net profit were 4.3287 trillion won and 97.0 billion won, respectively.
The sharp decline in operating profit was due to a large-scale personal data leakage incident that occurred last year. The hacking incident led to the loss of more than 650,000 subscribers, and costs surged as the company implemented various customer compensation programs, including a 50% discount on telecom charges, which dealt a direct blow to its performance.
The company explained that the number of 5th generation mobile communication (5G) subscribers stood at 17.49 million as of the end of last year, an increase of about 230,000 from the third quarter of the same year, and that the number of wireline subscribers, including those for ultra-high-speed internet, also recovered to the pre-incident level in terms of net additions in the fourth quarter.
Revenue related to AI data centers was 519.9 billion won, up 34.9% from a year earlier. This was driven by higher utilization rates at the data centers in Gasan, Seoul and Yangju, Gyeonggi Province, as well as the acquisition of the Pangyo data center.
SK Telecom plans to further strengthen its fundamentals this year through a "selection and concentration" strategy that focuses on achieving tangible business outcomes in areas where it already excels, following the establishment last year of an AI CIC (company-in-company) system that consolidated its AI capabilities.
The Ulsan artificial intelligence (AI) data center, which is being promoted in partnership with Amazon Web Services (AWS), broke ground in September last year, and the company is preparing to break ground on an additional data center in the Seoul area this year.
The company also plans to strengthen its data-center-related solutions business while expanding its submarine cable business to enhance synergies with its AI data center business.
Last month, SK Telecom successfully advanced to Phase 2 of the government's "independent AI foundation model" project, gaining momentum in securing competitiveness in "sovereign AI."
This year, the company plans to introduce AI across all existing telecom domains, including products and marketing, networks, and distribution channels, to enhance the customer experience. It also plans to further advance AI-based "customer lifetime value" modeling to provide each customer with tailored products, membership benefits, and distribution channels.
Park Jongseok, SK Telecom's Chief Financial Officer (CFO), said, "This year, we will strive to restore our financial performance to the usual level by driving innovation in customer value across all areas of our telecom and AI businesses."
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