South Korea’s telecommunications incumbent SK Telecom has enjoyed a significant increase in its profits, which it has largely attributed to its investments in its broadband and e-commerce businesses.
South Korea’s largest mobile operator announced its Q4 results for 2017, and they represented a sharp increase from the same period last year. The revenue increase is a result of the operator’s aggressive and robust strategic approach to its e-commerce and broadband services.
SK Telecom enjoyed a net profit increase of 39% year-on-year to KRW661 billion ($606 million), while its total revenue rose by 3.3% to KRW4.5 trillion. For the calendar year of 2017, the operator’s net income increased by a whopping 60%, although it credited that exponential rise to higher equity gains from its investment in South Korean chipmaker SK Hynix. SK Telecom holds close to a 20% stake in the country’s second largest chipmaker.
SKT has a 48% market share overall, despite a rise in contract-based mobile fee discounts which have been adopted. It has also enjoyed growth in data usage and handset subscriptions, although it was recently issued with a hefty fine from the Korea Communications Commission over its role in illegal handset subsidies.
EVP of SK Telecom’s corporate center, Ryu Young-Sang expressed his delight at the Q4 results, and claimed its success was achieved by its vision to explore opportunities in new growth areas.
He said, “Despite tough mobile telecommunications market condition last year, SK Telecom managed to bring about visible outcomes in new growth engine areas. The situation is unlikely to change this year, but we will continue to realize growth in the new ICT sector with some bold approaches.”
Revenue at its broadband and IPTV unit, SK Broadband, grew 8.7 per cent year-on-year in Q4 to KRW837 billion, as broadband subs rose 4.5 per cent year-on-year to 5.4 million and IPTV subs increased 10.2 per cent to 4.4 million. Its e-commerce business, reported an 8.7 per cent growth in its revenue in Q4.