Overseas Performances
According to the Data Analysis, Retrieval and Transfer (DART) System of the Financial Supervisory Service (FSS) on March 14, all of 11 overseas subsidiaries from SK Telecom recorded deficits from the first to third quarters last year. The total amount of accumulated deficits stood at 87.1 billion won (US$73.35 million).
More specifically, SK Telecom China Holdings made a loss of 12.64 billion won (US$10.64 million), while SKP Global Holdings in Singapore returned a loss of 13.49 billion won (US$11.36 million). SKP America, LLC and SKP America, LLC also posted 3.6 billion won (US$3.03) and 118 million won (US$99,368) in loss. Regardless of industries, including mobile service provider, manufacturer, and investment firm, all of its overseas affiliates showed a loss.
SK Telecom’s overseas businesses failed every time in the past. The company pushed into the Vietnamese market in 2001, and jointly started “S-Fone” service with the Vietnamese government. However, it exited the business in eight years in 2009. In 2005, SK Telecom established Helio, a joint venture the wireless service company EarthLink in the U.S., investing more than US$500 million (593.75 billion won), but it sold off Helio to Virgin Mobile in 2008.
In addition, the company took over E-Eye Kaoshin at 13.9 billion won (US$11.71 million) in 2008 in order to tap into the Chinese telematics market but it kept incurring losses. Eventually, SK Telecom sold off its unit in January last year. In 2009, the company also sold its shares of China Unicom, withdrawing business. LightSquared, the U.S.-based mobile carrier invested by SK Telecom in 2010, filed for bankruptcy in May 2012. As a result, the company made an investment loss of US$60 million (71.25 billion won).
In this regard, a SK Telecom official said, “It is difficult to enter the broadcasting and communication markets, which are categorized as the basic industries of nations, due to regulations of governments. The company has been continuously trying to make inroads into overseas markets in a bid to seek new growth engines and failures occured in the process.”