Industry

SK Telecom suffers due to new mobile phone discounts

SK Telecom, Korea’s top mobile carrier, said Friday that its second-quarter operating profit tumbled 18 percent from a year earlier mainly due to increased costs from a change in accounting standards and the application of new mobile phone discount fees.

Operating profit came to 346.9 billion won ($309.3 million) for the April-June period, the company said in a regulatory filing. Sales also decreased by 4.4 percent on-year to 4.15 trillion won over the cited period.

SK Telecom said that while sales from its media business increased, its operating profit fell due to changes in accounting standards and its mobile network business.

The government earlier mandated that the discount rate of monthly mobile phone plans provided by telecom firms be raised from 20 percent to 25 in line with efforts to reduce outlays related to telecommunication services.

YONHAP