The Korean mobile carrier SK Telecom reported a decline in its Q1 2016 sales and operating profit when compared with corresponding figure of previous year. The revenue dropped by 0.3% and registered at KRW 4.229 trillion, whereas the operating income fell by 0.1% and reached KRW 402.1 billion.
A silver lining is that the net income of SK Telecom increased 29.3% and stands at KRW 572.3 billion.
The reasons attributed to this fall are a sluggish market and higher costs from some subsidiaries. The elimination of sign-up fees and increased number of subscribers using contract-based mobile fee discounts are also the reasons cited for this decline.
The increase in the net income mainly comes from SK Planet’s sale of shares in Loen Entertainment which runs music service Melon.
In terms of the number of subscribers, SK Telecom recorded 19.53 million LTE subscribers, taking up over 67.5% of the company’s total mobile subscriber base.
According to the company, SK Telecom focuses on a market paradigm shift by promoting a product/service-oriented competition. For the purpose, it launches new services in the areas of Lifestyle, Media and IoT.
SK Telecom has also reorganized its business structure. In particular, the split and merging of SK Planet’s LBS business division including the T-Map service.
“SK Telecom will continue to enhance its competitiveness and profitability through innovative products and services to maximize customer and shareholder value, while achieving a successful transformation into a next-generation platform player to further drive up its enterprise value,” said Hwang Keun-joo, CFO and Head of Strategy and Planning Division at SK Telecom.