Investor Presentation August 2006 - SK Telecom · 2014-08-28 · Investor Presentation August 2006 This material has been prepared by SK Telecom for the information of investors of

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Investor PresentationAugust 2006

This material has been prepared by SK Telecom for the information of investors of the company.This is not intended as an offer or solicitation for the purchase or sale of any financial instrument or securities. While reasonable care has been taken to ensure that the information contained herein isnot untrue or misleading at the time of preparation, the company makes no representation as to itsaccuracy or completeness. Any projections or estimates may be different from actual results


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Disclaimer

This presentation has been prepared by SK Telecom Co., Ltd. (“the Company”). This presentation is being presented solely for your information and is subject to change without notice. No representation or warranty, expressed or implied, is made and no reliance should be placed on the accuracy, fairness or completeness of the information presented. The Company, its affiliates, advisers or representatives accept no liability whatsoever for any losses arising from any information contained in the presentation.

This presentation does not constitute an offer or invitation to purchase or subscribe for any shares of the Company, and no part of this presentation shall form the basis of or be relied upon in connection with any contract or commitment.The contents of this presentation may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, in whole or in part, for any purpose.


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Industry Overview

2006 2Q Operating Results and Outlook

Growth Strategy

Commitment to Shareholders

Table of ContentsTable of ContentsTable of Contents

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Industry Overview


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Korean Mobile Market Trend

Further growth potential exists in the Korean wireless marketFurther growth potential exists in the Korean wireless market

Mobile Penetration

29,04732,342 33,592

36,586 38,342 39,382

81.4%79.4%75.9%

61.2%70.1%67.9%

2001 2002 2003 2004 2005 Jun-06Subscribers(000’s) Penetration

Source: MIC, NSO Source: The Mobile World, as of 31 Mar 2006

30%

72% 73%81%

93% 98%

110% 113% 115%

Chin

a

US

Japa

n

Kore

a

Taiw

anSi

ngap

ore

UK

Swed

enHo

ng K

ong

Korean Mobile MarketKorean Mobile MarketKorean Mobile Market


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Market Share Revenue

Undisputed leader in the Korean wireless marketUndisputed leader in the Korean wireless market

Net Income Churn Rate

SKT:50.7%

KTF:32.7%

LGT:16.7%

19,98412,634

6,765

(‘000, %) (KRW bn)

SKT KTF LGT

(%)

Source: MIC, Company data

2006 2Q Competitive Landscape2006 2Q Competitive Landscape2006 2Q Competitive Landscape

373

SKT

81

KTF

-195

LGT

(KRW bn)

2,638

1,314

743

SKT KTF LGT

1.8%

2.6%3.1%

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2006 2Q Operating Results and Outlook


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Note:(1) Before revision: 17.5%(2) Before revision: 4,400

(Unit: KRW bn)

Revenue 2,638 10,500

Net Income 373 N/A

EBITDA 997 4,000

Marketing Expense

to Revenue 22.7% 20.5%

Capital Expenditure 348 1,600

2Q 2006 2006E2Q ‘06

4%2,527 2,540 4%

-20%467 337 11%

-10%1,103 1,029 -3%

5.2%p17.5% 17.3% 5.4%p

25%278 84 315%

YoY2Q ‘05 1Q ‘06 QoQ 2006E

2006 2Q Operating Results2006 2Q Operating Results2006 2Q Operating Results

(1)

(2)

5,179

710

2,026

20.1%

431

2Q 20061H ‘06


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Continued effort to maintain market leadership while stabilizingContinued effort to maintain market leadership while stabilizing the marketthe market

2Q Market Status

'04 '05

19.2%

17.2%

22.7%

2Q '06

Introduction ofhandset subsidy

Intense competition initiated by competitors’aggressive marketing program

Increase in retention cost & decrease in acquisition cost (April)

Increase in acquisition cost (May & June)

Marketing Expense Trend

2006 Market Environment2006 Market Environment2006 Market Environment

Rational behind Guidance Revision

MNPIntroduction

Increased retention & acquisition cost caused by introduction of handset subsidy and heated competition in 2Q

Need to secure the subscriber base for mid-to-long term corporate value

Committed to increase in corporate value and shareholders oriented management

1Q ‘06

17.3%

Handset SubsidyIntroduction

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Growth Strategy


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Total Investment US$1 billionUS$360 million US$220 million

Development

• US$1.0bn in China Unicom’s CB

• SKT to be exclusive and sole partner in relation to China Unicom’s CDMA business- Cooperation in 6 areas

• 740,000 subscribers & 4.3% M/S as of July ’06

• Nationwide coverage by 2006

• 2010 projected mobilepenetration: 44.5%

• Joint venture with EarthLink

• Differentiated service aimed at younger generation, tech savvy customers and Korean- American

InvestmentPrinciple

Transplant Resource & Capability of SKTLocal partnership to minimize risk and maximize successCulturally similar and geographically close to Korea

Global Business Global Business Global Business Stepping stone to emerge as a global leader in technology & servStepping stone to emerge as a global leader in technology & service innovationice innovation

Penetration Population

30.0%1,312 million

11.8%84 million

72.0%298 million

(1)

Source: (1) The Mobile World, as of 31 March 2006

VietnamVietnam U.SU.S ChinaChina


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HSDPA

Video telephony & related value-added service- Expand to phone-to-phone as well as web-to-phone &

fixed-to-phone- Value added svc. such as image coloring / lettering,

image message call

Video telephony & related value-added service- Expand to phone-to-phone as well as web-to-phone &

fixed-to-phone- Value added svc. such as image coloring / lettering,

image message call

Video Telephony

Roaming Service Marketing- 80% of world’s wireless operators use GSM or WCDMA

Roaming Service Marketing- 80% of world’s wireless operators use GSM or WCDMA

Global Roaming

QVGA Contents- High-resolution video contentsJUNE Channel- Night-time auto-download service

QVGA Contents- High-resolution video contentsJUNE Channel- Night-time auto-download service

Premium Multimedia Svc.

Convergence & Ubiquitous Service

Music portal site where MP3 files are downloaded through internet and mobile handsets5.7 mn subscribers as of June 06Korea’s # 1 paid music site in terms of revenue & subscriber base

Mobile version of immensely popular web-based community portal1.5 mn users as of June ’06(18mn Cyworld users as of June ’06)

3D game portal site launched In April 2005Expanding contents via cooperation with major game developersExpect increased use with introduction of HSDPA

Core and new domestic business to continue to enhance overall grCore and new domestic business to continue to enhance overall growth owth

Domestic BusinessDomestic BusinessDomestic Business

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Commitment to Shareholders


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Commitment to enhancing shareholder valueCommitment to enhancing shareholder value

①① Special dividends of approx. KRW 300 Special dividends of approx. KRW 300 bnbn in 2004in 2004

②② Total treasury buyback of KRW 200 Total treasury buyback of KRW 200 bnbn scheduled for 2Hscheduled for 2H-- Stage 1 : Stock buyback for cancellation of 491,000 shares(apprStage 1 : Stock buyback for cancellation of 491,000 shares(approx. KRW 93 ox. KRW 93 bnbn) from 1 Aug to 14 Aug) from 1 Aug to 14 Aug-- Stage 2 : Second buyback process will be undertaken after the sStage 2 : Second buyback process will be undertaken after the stage 1 buyback is completedtage 1 buyback is completed

③③ 2007: 2007: Similar level of shareholder return as 2006 Similar level of shareholder return as 2006

5%

2001

10%

2002

21%

2003

25%

2004

35%

2005

40%

2006 2007E

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22Trend of Dividend Payout Ratio / Share Buyback

Shareholder ReturnShareholder ReturnShareholder Return

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Documents

Investor Presentation August 2006 - SK Telecom · 2014-08-28 · Investor Presentation August 2006 This material has been prepared by SK Telecom for the information of investors of