Published : 2013-02-05 13:28
Updated : 2013-02-05 17:45
SK Telecom Co., the country's top mobile operator, on Tuesday reported a two-fold growth in its fourth-quarter profit from a year earlier due to a decrease in marketing costs.
Net profit came to 519.1 billion won (US$477.5 million) in the October-December period, compared with a profit of 195.5 billion won a year earlier, SK Telecom said in a regulatory filing.
Revenue rose 6 percent on-year to 4.2 trillion won, and operating profit jumped 37.6 percent to 544.6 billion won.
The stronger bottom line was attributed to a reduction in marketing costs. SK Telecom's marketing expenses in the three-month period reached 754 billion won, sharply down from 851 billion won a year earlier.
The results come as the country's three mobile operators -- SK Telecom, KT Corp. and LG Uplus Corp. -- have been slowing down their marketing drive recently amid the communications watchdog's move to cool market competition.
In December, the Korea Communications Commission fined the three firms a combined 11.9 billion won and imposed business suspensions for doling out excessive subsidies to lure LTE subscribers.
SK Telecom, which leads the local LTE market with 7.5 million subscriber as of last year, is currently under a 22-day business suspension from attracting new subscribers.
For the whole year, the company's net profit totaled 1.1 trillion won, down 29.5 percent from the previous year. Revenue gained 2.3 percent to 16.3 trillion won, and operating profit jumped 37.6 percent to 544.6 billion won.
The top mobile carrier said its leadership in the LTE market and business growth in affiliates SK Broadband and SK Planet propelled its revenues.
The company, however, said increased capital expenditure weighed on its annual operating profit and net profit.
SK Telecom spent 2.9 trillion won on facility investments last year, up 25.5 percent from 2.3 trillion won the previous year.
The mobile carrier said it plans to refrain from subsidy competition this year and bolster new growth engines such as corporate IT solutions, media and healthcare.
SK Telecom said it aims to reap annual revenue of 17.2 trillion won this year, and spend 2.1 trillion won in capital expenditure.
LTE subscriptions are forecast to hit 14 million by the end of the year, it added.
Shares of SK Telecom closed at 174,500 won on the main stock index, up 1.16 percent from Monday's close. (Yonhap News)