Operating revenue falls at SK Telecom

SK Telecom, the largest cell phone service provider in Korea, reported a drop in operating profits yesterday for the first quarter despite a growth in revenues. The company said it had been forced to spend more on marketing because of competition following the introduction of “phone number portability” here. Koreans can now keep their same cell phone number even after they switch carriers. SK Telecom’s operating profit in the first quarter fell by 8 percent to 691 billion won ($599 million) compared with the same period last year. Its revenues grew 7 percent year on year to 2.4 trillion won, and net profit climbed by 0.9 percent to 452 billion won. With the growth in the use of wireless Internet and other services came increased revenue, SK said. But marketing costs in the first quarter rose 34 percent compared to the first quarter of last year to 478 billion won. Since the beginning of 2004, SK Telecom subscribers have been able to retain their numbers when moving to KTF or LG TeleCom, SK Telecom’s smaller rivals. The government is phasing in the portability scheme to promote competition; SK’s rivals do not yet face those pressures. SK Telecom shares added 0.8 percent to 197,000 won yesterday. by Kim Hyo-jin