Increased marketing costs hit SKTs operating profit
South Korea’s largest mobile network operator by subscribers, SK Telecom (SKT), has released its financial results for the three months ended 31 March 2010, revealing that net profit was up against the same period a year earlier, although noting that marketing costs had once again hit operating profit.
The cellco posted a first-quarter net profit of KRW321.8 billion (USD288 million), up 1.6% year-on-year from KRW316.7 billion, with the increase attributed predominantly to a reduced foreign exchange related debt as a result of the appreciation of the Korean won. Operating profit meanwhile fell by 14.8% compared to 1Q09, at KRW480.5 billion, with marketing costs up 28% against the same period a year earlier at KRW846 billion; the company has been pursuing an aggressive campaign aimed at retaining customers following rival cellco KT Corp’s introduction of the iPhone.
SKT’s revenue for the three-month period meanwhile rose by just under 5% y-o-y to KRW3.02 trillion on the back of a 6% rise in customer numbers compared to end-March 2009. At 31 March 2010 the operator reported a wireless subscriber base of 24.83 million subscribers.
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