SK Telecom Has Another Up Quarter

In July, I reviewed the strong quarterly results from Korea's SK Telecom. Now, three months later, SKT reports even higher quarterly profits on lower spending and capex. The key to SK Teleocom's rising profits is unabiguously the rapid adoption of wireless data services which are overcompensating for the commoditization of voice services. Wireless Internet services revenue rose 75% compared to this quarter last year, while marketing costs were actually down. Wireless data now accounts for 16% of SKT's revenues, up from 14% last quarter and 10% a year ago (that is strictly Internet data, not even including SMS.) With all their results looking positive, SKT was rewarded with a drop of 2.12% on the Kosdaq exchange! My comments on the success of SKT revolve around the fact that they have unswervingly struggled to provide their customers with the best data networks (EV-DO for 2 years), the best application environments (Java, video, LBS, etc.), and the best content possible. The result is a growing base of active data users. Any mobile operators that compromise in their data solutions because they seek ease of deployment, cost cuts, risk aversion, or simplicity will continue to reap what they sow from the mobile data market.(Disclosure: SKT has been a consulting client for the past two years)

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