"Over the past six months, SK Telecom has gone through the most difficult time since its founding due to a cyber intrusion incident. Many customers left the company."
In the third quarter of this year, SK Telecom's net income on a consolidation basis, including affiliates, swung to a loss for the first time in 23 quarters. Operating profit on a consolidation basis narrowly avoided a loss, but on a separate basis for SK Telecom's standalone results, operating profit turned to a loss for the first time in 103 quarters. This is due to large-scale compensation and a penalty surcharge imposed in the wake of the hacking incident in April. On the 30th, Chief Financial Officer Kim Yang-seop of SK Telecom said at the corporations earnings presentation for the results announcement, "Due to weak results, we decided not to pay cash dividends for the third quarter of this year," and stated accordingly.
SK Telecom disclosed on the 30th that third-quarter operating profit on a consolidation basis was 48.4 billion won, down 90.92% from the same period last year. During the same period, net income swung to a loss year over year, with a net loss of 166.7 billion won. Third-quarter revenue this year decreased 12.23% year over year to 3.9781 trillion won.
Operating profit came in above securities market forecasts, but revenue fell short. According to FnGuide, the securities market projected SK Telecom's third-quarter operating profit on a consolidation basis at 10.7 billion won and revenue at 3.9381 trillion won. Those figures represent year-over-year declines of 97.98% and 13.11%, respectively. The securities market also expected net loss to swing to a loss year over year at 136.7 billion won.
On a separate basis that classifies only SK Telecom's standalone results excluding affiliates, the third quarter of this year recorded an operating loss of 52.2 billion won and a net loss of 206.6 billion won, swinging to losses from the same period last year. Separate-basis revenue was 2.6647 trillion won, down 16.8% year over year.
The third-quarter slump was largely due to the fallout from the hacking. In April, SK Telecom suffered a leak of SIM information for 27 million subscribers and, for the first time, surrendered the 40% line in market share. In particular, SK Telecom implemented a customer appreciation package to handle the aftermath of the hacking incident, which reduced third-quarter revenue on a consolidation basis by 538 billion won. The customer appreciation package included a 50% bill discount for the month of August, 50GB of data for five months, and T Membership partner discounts. The company also introduced a program to restore the subscription years and membership tier of customers who rejoin within six months. In addition, the Personal Information Protection Commission's penalty surcharge of 134.8 billion won related to the hacking incident was reflected in a lump sum in the third quarter, adding to the burden.
However, the fixed-line and wireless communications business showed recovery compared with the previous quarter. The number of 5G subscribers was 17.26 million, up about 240,000 from the previous quarter. High-speed internet subscribers also turned to a net increase. The AI data center business posted 149.8 billion won in revenue thanks to the acquisition of the Pangyo data center and winning a project to support leasing of graphics processing units (GPUs). The AI infrastructure, model, and transformation (AIX) business also recorded 55.7 billion won.
The company did not say when it will pay dividends, but noted it will do its best to resume them. CFO Kim said, "Taking into account the cyber intrusion incident and its impact on cash flow, the board will carefully consider fourth-quarter dividends as well."
On the same day, SK Telecom also outlined its AI business strategy. SK Telecom said it will reorganize its dispersed AI capabilities into an "AI CIC (in-house independent company)" to accelerate the transition to an AI-centered business structure. At the end of August, the company held a groundbreaking ceremony for the Ulsan AI data center it is pursuing with Amazon Web Services (AWS), and it signed a memorandum of understanding (MOU) with OpenAI regarding the construction of a dedicated AI data center for the southwest region. The AI service adot applied "A.X 4.0" and "GPT-5." SK Telecom is seeking to expand adot into various industries with a focus on "adot Biz." Alongside this, it is currently participating in the Ministry of Science and ICT's "national AI foundation model" project.
Meanwhile, SK Telecom is formulating and implementing an "information protection innovation plan," investing a total of 700 billion won over the next five years based on a "zero trust" security philosophy of trusting no one and continuously verifying. SKT CFO Kim Yang-seop said, "SK Telecom will put the restoration of customer trust first and turn the crisis into an opportunity by delivering full-fledged results in the AI business to become a stronger company."