SK Telecom Enjoys Wireless Data Boom

07/16/2002 ComputerWire News (c) 2002 ComputerWire.

The take-up of wireless data services in the South Korean mobile market is providing a timely reminder to the world's beleaguered mobile carrier market that it is more than possible to generate significant revenue from 2.5/3G services.

SK Telecom Co Ltd, South Korea's largest mobile carrier, has reported a 42% rise in net profits and a 39% increase in revenue for the first half of the year. The increase has been mostly powered by a rise in subscribers and growing revenue from wireless data services. The results are in direct contrast to many other mobile firms that are struggling to persuade customers to spend money on 2.5/3G services.

"Our earnings are better than last year because we are getting more revenue per user from internet and data services," said company spokesperson Choi Young Chul.

South Korea's mobile market is largely saturated, with a penetration rate of 64.9% last month, and analysts believe that future revenue will depend more on wireless data services rather than traditional mobile phone services. Currently, almost 40% of cellular users in South Korea subscribe to some form of mobile data service, with SK Telecom's subscribers spending an average of 45,000 won ($38) a month on their cell-phone bills.

Over the last six months, the carrier reported a steady rise in mobile subscribers, bringing its market share as of end of June to 53.3%, from 52.8% as of the end of March. It added 462,000 new customers in the second quarter, increasing its total to 16.5 million subscribers.

The number of subscribers opting for faster 2.5/3G services increased to 6.7 million, compared to 5.1 million three months earlier. "The rise in wireless data services is mostly driven by an increase in download of pictures and bell sounds for mobile phones," said Kwok Chelkeun, a SK Telecom spokesperson.

For the six months ended 30 June, 2002, SK Telecom reported a 48% rise in net income to 900bn won ($764m) during the first six months of the year on sales of 4.46 trillion won ($3.8bn). It had an operating profit of 1.46 trillion won ($1.2bn) in the same period.

(c) 2002 ComputerWire