SK Telecom sees 6.4% drop in Q1 earnings

Rise in 5G subscribers increased sales but investment into 5G infrastructure slightly dented profitability.

SK Telecom has posted operating profit of 302 billion won for the first quarter, a drop of 6.4% compared to the year prior due to rises in costs from investing in 5G infrastructure, the company said Thursday.

The lack of roaming customers in South Korea due to the COVID-19 pandemic further dented profits, the telco said.

Despite the lower amount of tourists and smartphone sales stalling, the telco's overall sales increased by 2.6% to 4.45 trillion won thanks to the continued growth of its 5G subscriber base.

SK Telecom has the highest number of 5G subscribers among South Korea's three local telcos, with 2.65 million as of the first quarter.

As of February, South Korea has 5.36 million 5G subscribers, with the current figure expected to be higher as the Galaxy S20 was released shortly after that month.

The company also saw its subsidiaries, SK Broadband, which operates IPTV services, and security firm ADT Caps, which it acquired in 2018, contribute 823.5 billion won and 291.4 billion won in sales, respectively, which are year-on-year increases of 8.2% and 5.4%. 

SK Telecom said it would find further growth that utilises 5G networks by pushing cloud gaming and new AR and VR services as well as continue to converge services with its wireless capabilities going forward.

It will also launch new services in light of social distancing caused by COVID-19, it added.

Local carriers SK Telecom, KT, and LG Uplus are planning to invest 4 trillion won in 5G networks by the first half of the year as part of efforts to commercialise standalone networks by the end of the year.

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