SK Telecom (SKT) reported a significant increase in operating profit for the third quarter of this year, reaching 552.3 billion won, a 1040% rise compared to the same period last year. The company experienced substantial growth in both its wireless and AI data center (AIDC) sectors.
On November 4, SKT announced that its consolidated revenue for the third quarter was 4.4973 trillion won, marking a 13.1% increase from 3.9781 trillion won in the same quarter last year. The operating profit surged from 48.4 billion won in the previous year to 552.3 billion won this year.
The increase in operating profit follows a year when temporary expenses related to a hacking incident led to significant customer compensation costs. This year, the absence of one-time expenses has allowed the company to normalize its performance, achieving over 500 billion won in operating profit for three consecutive quarters.
Wireless revenue reached 2.5697 trillion won, a 21.6% increase compared to the same period last year. Baek Byung-chan, head of SKT's mobile network operations, explained during a conference call that the company focused on securing high-value subscribers through customer value innovation rather than competing solely on marketing expenses.
The fixed-line segment also saw revenue growth, reaching 305.5 billion won, up 7.4% year-on-year, with high-speed internet subscribers increasing to 7.383 million. SK Broadband, emphasizing cost efficiency, reported an operating profit of 134.7 billion won, a 51% increase from the previous year.
AIDC revenue rose by 6.2% year-on-year to 126.1 billion won, driven by increased data center utilization and undersea cable traffic. However, it fell 7.4% from the previous quarter, attributed to a temporary phenomenon during the transition to new long-term contracts.
Revenue from business-to-business (B2B) and business-to-consumer (B2C) transactions increased by 27.3% to 70 billion won, influenced by new cloud business contracts.
SKT plans to further develop its AIDC business, with SKT overseeing strategy and risk management, while SK Hyper focuses on business development and SK Horizon manages infrastructure operations and expansion.
SK Horizon is currently constructing new data centers in Ulsan and Seoul, with a capacity of approximately 180 megawatts (MW), and plans to gradually expand its undersea cable business.
SK Hyper is negotiating with potential clients in Ulsan and aims to expedite infrastructure development once sites are secured. Park Jong-seok, SKT's Chief Financial Officer, stated, "We are in discussions with three to four global partners regarding specific business conditions," adding that they are also developing sites and attracting clients in multiple locations beyond Ulsan.
He noted that AIDC requires substantial investment, and securing stable demand through long-term contracts with clients is crucial for external funding. The company is exploring various funding methods, including attracting strategic investors and project financing.
SKT anticipates that the impact of low Earth orbit satellite communication providers, such as SpaceX, on the domestic telecommunications market will be limited. Park emphasized that domestic operators already possess excellent network quality and service competitiveness based on a nationwide 5G network and high in-building coverage.
However, he acknowledged the potential for continuous improvement in satellite communication coverage and data capacity through the integration of satellite and terrestrial networks, stating that the company will monitor technological advancements, business models, and domestic regulatory changes closely.
Additionally, the standalone 5G network is expected to be commercialized in December, while the sixth-generation (6G) network is projected for 2030.
On November 4, SKT announced that its consolidated revenue for the third quarter was 4.4973 trillion won, marking a 13.1% increase from 3.9781 trillion won in the same quarter last year. The operating profit surged from 48.4 billion won in the previous year to 552.3 billion won this year.
The increase in operating profit follows a year when temporary expenses related to a hacking incident led to significant customer compensation costs. This year, the absence of one-time expenses has allowed the company to normalize its performance, achieving over 500 billion won in operating profit for three consecutive quarters.
Wireless revenue reached 2.5697 trillion won, a 21.6% increase compared to the same period last year. Baek Byung-chan, head of SKT's mobile network operations, explained during a conference call that the company focused on securing high-value subscribers through customer value innovation rather than competing solely on marketing expenses.
The fixed-line segment also saw revenue growth, reaching 305.5 billion won, up 7.4% year-on-year, with high-speed internet subscribers increasing to 7.383 million. SK Broadband, emphasizing cost efficiency, reported an operating profit of 134.7 billion won, a 51% increase from the previous year.
AIDC revenue rose by 6.2% year-on-year to 126.1 billion won, driven by increased data center utilization and undersea cable traffic. However, it fell 7.4% from the previous quarter, attributed to a temporary phenomenon during the transition to new long-term contracts.
Revenue from business-to-business (B2B) and business-to-consumer (B2C) transactions increased by 27.3% to 70 billion won, influenced by new cloud business contracts.
SKT plans to further develop its AIDC business, with SKT overseeing strategy and risk management, while SK Hyper focuses on business development and SK Horizon manages infrastructure operations and expansion.
SK Horizon is currently constructing new data centers in Ulsan and Seoul, with a capacity of approximately 180 megawatts (MW), and plans to gradually expand its undersea cable business.
SK Hyper is negotiating with potential clients in Ulsan and aims to expedite infrastructure development once sites are secured. Park Jong-seok, SKT's Chief Financial Officer, stated, "We are in discussions with three to four global partners regarding specific business conditions," adding that they are also developing sites and attracting clients in multiple locations beyond Ulsan.
He noted that AIDC requires substantial investment, and securing stable demand through long-term contracts with clients is crucial for external funding. The company is exploring various funding methods, including attracting strategic investors and project financing.
SKT anticipates that the impact of low Earth orbit satellite communication providers, such as SpaceX, on the domestic telecommunications market will be limited. Park emphasized that domestic operators already possess excellent network quality and service competitiveness based on a nationwide 5G network and high in-building coverage.
However, he acknowledged the potential for continuous improvement in satellite communication coverage and data capacity through the integration of satellite and terrestrial networks, stating that the company will monitor technological advancements, business models, and domestic regulatory changes closely.
Additionally, the standalone 5G network is expected to be commercialized in December, while the sixth-generation (6G) network is projected for 2030.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.