SK Telecom’s (SKT) profit plunged in Q2 as a recent data breach prompted a departure of nearly 750,000 mobile customers and forced the company to boost its spending in response to the incident.
The operator attributed the profit decline to one-time expenses including customer SIM replacements and retail stores’ loss compensation totalling KRW250 billion ($179.7 million).
Capex increased 63.6 per cent to KRW635 billion.
After new subscriber sign-ups were suspended in May, the operator lost about 220,000 5G and 522,000 4G users.
CFO Kim Yang-seob emphasised on an earnings call it took the findings of a joint public-private investigation very seriously, resulting in setting up an Accountability and Commitment Programme.
“Through these efforts, we are determined to take this as an opportunity to strengthen our business fundamentals.”
Kim said regaining customer trust is its highest priority and it is taking “a hard look at the cybersecurity incident and committed to rebuilding our business thoroughly and transparently”.
He explained the full cost of SIM replacement was covered in Q2, but noted steep discounts offered to win back customers will result in sequential declines in revenue and operating profit.
SKT lowered annual revenue guidance from KRW17.8 trillion to KRW17 trillion in July, and Kim said its 2025 profit also is expected to decline significantly year-on-year.
Q2 numbers
Net profit dropped to KRW83 billion from KRW350 billion in Q2 2024, with consolidated revenue down 1.9 per cent to KRW4.3 trillion.
Mobile service revenue also fell 1.9 per cent to KRW2.6 trillion, with ARPU flat at KRW29,204.
The number of 5G subscribers grew 4.9 per cent to 17 million, accounting for 77 per cent of total mobile customers, while LTE users fell 23 per cent to 5.1 million.
Users of its A-dot personal assistant more than doubled to 9.8 million.
Enterprise sales were up 1.4 per cent to KRW492.3 billion and its SK Broadband unit registered 2.4 per cent revenue growth to KRW1.1 trillion.
AI data centre sales grew 13.3 per cent to KRW108.7 billion and AI transformation revenue increased 15.3 per cent to KRW46.8 billion.
Source: Mobile World Live
Image Credit: SK Telecom
