SKT posts operating profit in the 500 billion won range for third straight quarter ... AI also brings in revenue

[Financial News] SK Telecom Co., Ltd. (SKT) has posted operating profit in the 500 billion won range for three consecutive quarters this year, appearing to recover from the fallout of last year’s hacking incident and gain momentum in expanding its wired and wireless telecom and artificial intelligence (AI) businesses.
Market analysts say that completing the framework for its artificial intelligence data center (AIDC) business, including SK Hyper and SK Horizon, means SKT can now expect results from its full-fledged AI infrastructure business.
SKT said on the 4th that, on a consolidated basis, it recorded revenue of 4.4973 trillion won and operating profit of 552.3 billion won in the third quarter of this year, up 13.1% and 1,040.3%, respectively, from a year earlier. Net income for the same period was 411.8 billion won, marking a return to profitability.

On a standalone basis, revenue rose 18.4% year over year to 3.1563 trillion won, while operating profit was 413.5 billion won, a turnaround from an operating loss of 52.2 billion won in the third quarter of last year. Net income was 298.9 billion won, reversing a net loss of 206.6 billion won in the same period last year.
The third-quarter results reflect a base effect from large-scale subscriber compensation and telecom bill discounts implemented after last year’s hacking incident.
Given that operating profit was 533.3 billion won in the third quarter of 2024, before the hacking incident, the figures are seen as indicating that the company has fully overcome the incident’s aftereffects.

By business segment, the telecom business was found to have maintained modest growth.
Mobile telecom revenue in the third quarter rose 21.6% from the same period last year to 2.5697 trillion won.
The low-base effect from lower revenue due to last year’s Customer Appreciation Package, a subscriber compensation program, and subscriber growth driven by a marketing strategy focused on customer lifetime value (LTV) were key factors. 5G subscribers totaled 18,094,000, up 4.8% from the third quarter of last year. 5G accounted for 83% of all mobile subscribers.
Average revenue per user (ARPU) was 29,297 won, up 22.1% year over year and 0.7% from the previous quarter.
High-speed internet subscribers also continued to increase. Fixed-line telecom revenue in the third quarter of this year rose 7.4% from the same period last year to 305.5 billion won. SK Broadband’s operating profit increased 51% to 134.7 billion won.

AI business revenue also increased. AIDC revenue rose 6.2% from the same period last year to 126.1 billion won. The increase is believed to reflect a higher AIDC utilization rate.
Revenue from AI services for businesses and individuals rose 27.3% year over year to 70 billion won.

SKT completed the framework for expanding its AIDC business by launching SK Hyper in July and SK Horizon in August. SKT is responsible for business strategy, risk management and global cooperation; SK Hyper handles business development, while SK Horizon is responsible for infrastructure operations and expansion.
SK Horizon plans to increase the capacity of its eight data centers currently in operation from 137 MW to at least 318 MW after 2030. It also plans to increase its undersea cables from one currently to at least three after 2032. SK Hyper is discussing business terms with potential customers, focusing on Ulsan. Once the discussions are finalized, it plans to use the site it has secured to develop infrastructure.
In AI services, SKT is applying its proprietary AI foundation model to A. and its work-related AI services. It is also participating in the government’s AI for Everyone initiative, aiming to launch services within the year and build a service ecosystem that combines its telecom and AI capabilities.
SKT set its dividend at 830 won per share for the third quarter of this year, the same amount as in the first and second quarters.
Park Jong-seok, SKT’s chief financial officer (CFO), said, “We were able to achieve results in both recovery and growth on the strength of our two pillars, telecom and AI.” He emphasized, “We will continue to work to link our telecom and AI businesses under a single growth strategy and amplify the synergies.”
[email protected] Lee Gu-sun Reporter