SK Telecom failed to shake off the fallout from the hacking incident in the fourth quarter last year as well. Operating profit was cut in half from a year earlier. Due to the deteriorating results, SK Telecom decided not to pay cash dividends in the fourth quarter, following the third quarter last year.
SK Telecom said on Feb. 5 that its operating profit for the fourth quarter last year came to 119.1 billion won, down 53.12% from the fourth quarter of 2024. Revenue for the same period fell 4.05% to 4.3287 trillion won, and net profit was found to have dropped 75.43% to 97 billion won.
The results were not far from securities analysts' forecasts. According to FnGuide, the securities market projected SK Telecom's fourth-quarter operating profit last year at 109.8 billion won on a consolidation basis and revenue at 4.3962 trillion won. Those figures represent sharp declines of 56.80% and 2.56%, respectively, from a year earlier. The securities market also expected a net loss of 130.3 billion won, down 67% from a year earlier.
An SK Telecom official said of the fourth-quarter results, "Wireless subscribers fell due to the fallout from the hacking incident, and revenue and profit decreased as a result of measures such as implementing a customer appreciation package related to this."
◇ 229,000 wireless subscribers left in the fourth quarter... lost a total of 1.03 million subscribers after the hacking
Excluding budget phones, SK Telecom's wireless subscribers fell by 229,000 in the fourth quarter alone.
Until the USIM hacking incident broke out in April, SK Telecom's wireless subscriber count had been rising, reaching 31,885,000 in the first quarter last year before dropping to 31,006,000 in the second quarter and further to 30,853,000 in the fourth quarter. That means 1,032,000 customers left after the first quarter, when the hacking fallout was not reflected.
In April last year, USIM information of 27 million subscribers was leaked at SK Telecom, and its telecom market share fell below the 40% line for the first time. The company implemented a 538 billion won customer appreciation package to deal with the aftermath of the hacking. The package includes 50GB of data per month for five months and discounts with T Membership partners. The expense was largely reflected in the third quarter, but the company said it still affected the fourth-quarter results. Investment related to strengthening security also increased.
◇ Revenue fell for the first time in 7 years and operating profit for the first time in 6 years on an annual basis
Last year, SK Telecom's annual revenue fell for the first time in seven years, and operating profit fell for the first time in six years. A total of 933,000 subscribers left in the year alone.
SK Telecom disclosed that on a consolidation basis last year it posted revenue of 17.1992 trillion won and operating profit of 1.0743 trillion won. Those represent declines of 4.7% and 41.1%, respectively, from 2024. Net profit for the same period also fell 73% to 375.1 billion won.
Annual results were in line with securities forecasts. According to FnGuide, the securities market expected SK Telecom's operating profit on a consolidation basis last year to be 1.0639 trillion won and revenue to be 17.1667 trillion won, down 41.65% and 4.31%, respectively, from 2024. Experts also projected net profit for the same period at 362.7 billion won, down 73.85% from a year earlier.
However, revenue related to artificial intelligence (AI) data centers grew 34.9% from 2024 to 519.9 billion won last year, helped by higher utilization at the Gasan, Seoul, and Yangju, Gyeonggi, data centers and the acquisition of the Pangyo data center.
◇ "It will not be easy to recover revenue to pre-hacking levels... will focus on strengthening telecom profitability"
SK Telecom plans this year to focus on securing profitability that delivers tangible business results in areas where it excels. The strategic directions presented by the company are to restore market leadership through customer value innovation, accelerate AI to innovate productivity in the telecom business, and secure the sustainability of the AI business through selection and concentration.
SK Telecom said, "We will prioritize customer value, which is the essence of our business, and we are redesigning all elements of telecommunications—products, memberships, and channels—with a customer focus," adding, "We aim to enhance the customer experience and simultaneously improve productivity by introducing AI across all areas of the telecom business. We will advance AI-based customer lifetime value modeling, and we will automate the network from design to build and operation based on AI."
The Ulsan AI data center that SK Telecom is pursuing in partnership with AWS also broke ground in September last year. The company is also set to break ground on an additional data center in the Seoul area this year. SK Telecom plans to strengthen its data center solutions business while boosting synergy with its AI data center business by expanding its subsea cable business. SK Telecom also advanced to phase two of the government's "independent AI foundation model project" last month.
However, it will realistically be difficult to recover to pre-hacking performance levels. Park Jong-seok, SK Telecom chief financial officer (CFO), said on an earnings conference call, "We plan to pursue various measures this year to secure growth, but the environment is not favorable to expect revenue at the pre-incident level," adding, "However, considering mobile subscribers' preferences, we will reorganize products and channels and focus on strengthening profitability so that operating profit can approach the 2024 level."