OP of New Businesses Surges 40%
SK Telecom (SKT) announced on Nov. 5 that it posted 4.731 trillion won in revenue, 361.5 billion won in operating income, and 395.7 billion won in net income in the third quarter of 2020 on a consolidated basis.
Compared to the same period last year, SKT’s revenue and operating income increased by 3.7% and 19.7%, respectively, backed by improved performance of its mobile communication business and steep growth of its new businesses. Net income grew by 44.2% affected by factors including increased equity method gains from SK hynix.
SKT’s new businesses, namely media, security and commerce, continued their strong growth, playing a role as the company’s solid growth engine. The combined total revenue of these businesses has increased by 18.9% year-on-year (YoY) to 1.527 trillion won as they each achieved a two-digit YoY growth in their revenues. Their combined total operating income has exceeded 100 billion won for the first time backed by a 40.3% YoY growth.
The media business posted 966.8 billion won in revenue, increasing by 20.3% YoY affected by the growth of the IPTV business and SK Broadband’s merger with T-broad. By strengthening its contents, including latest movies, international TV series and kids contents, and reorganizing its services to meet the needs of mobile customers, SK Broadband secured a total of 8.5 million paid IPTV subscribers as of the end of September after adding 129,000 subscribers in the third quarter.
The company’s security business -- ADT Caps and SK Infosec -- posted a quarterly revenue of 353.3 billion won, a 15.5% YoY increase. ADT Caps and SK Infosec plan to accelerate growth by expanding services fit for the current non-contact trend such as AI face recognition temperature screening and walk-through access security solutions, along with security solutions business based on the latest ICT, including cloud and convergence security.
The commerce business - 11st and SK Stoa - reported 206.6 billion won in revenue for the third quarter, expanding by 18.7% YoY. SK Stoa’s revenue grew by 47.7% YoY, vaulting the company to No. 1 position in the T-commerce market. 11st achieved both revenue and operating profit growth by responding proactively to the non-face-to-face consumption trend through strengthened live commerce and expanded same-day delivery shopping service.
SKT is redoubling efforts to secure new growth engines for the post-COVID-19 era. The mobile app market One Store has been proving its corporate value and growth potential by successfully attracting both apps and users. One Store plans to speed up its preparations for an initial public offering (IPO) next year.
In addition, SKT will promote mobility as its fifth key business by establishing a specialized mobility company based on T Map, Korea’s largest mobility platform, within this year. The new mobility company will focus on T Map-based platform business in areas of parking and advertising; all-in-one Mobility as a Service (MaaS) that offers diverse means of transportation through subscription; and taxi-hailing service with its strategic partner Uber.
SK Telecom’s revenue for its mobile communication business increased by 1.0% YoY to 2.941 trillion won. Despite decreased sales caused by the termination of its 2G service and prolonged impact of the COVID-19 pandemic, SKT continues to sustain its leadership in the 5G era with 4.26 million 5G subscribers as of September-end and No.1 ranking in all three major customer satisfaction surveys in Korea, thanks to its efforts to enhance 5G network quality and expand customer-oriented services.
In particular, SKT is making swift moves to create an innovative customer experience in the new era of non-face-to-face. It has launched non-face-to-face online to offline (O2O) services including an instant delivery service; released ‘V Coloring,’ a subscription-based video ringback tone service; and opened T Factory, a facility that best showcases its vision and innovations. Going forward, SKT plans to further solidify its market leadership by offering a differentiated customer experience.
“Our efforts to enhance corporate value are turning into meaningful and tangible results,” said Yoon Poong-young, CFO of SKT. “We will secure growth engines based on our five major businesses, while further solidifying our leadership in 5G to turn into a global technology company with unmatched competitiveness in ICT.”