South Korea’s top wireless carrier SK Telecom Co. posted sound earnings more or less in line with market expectations in the first quarter this year thanks to improved performance of its subsidiaries SK Broadband Co. and SK Planet Co.

The company in a regulatory filing Wednesday reported that its operating profit on a consolidated basis in the January to March period rose 2.1 percent from a year ago to 410.5 billion won ($364 million), slightly below the market estimation of 427 billion won. Sales inched up 0.1 percent to 4.23 trillion won and net profit rose 2.0 percent on year to 583.5 billion won.

Shares of SK Telecom closed Wednesday at 244,000 won, down 2.2 percent or 5,500 won from the previous session.

The company owed its improved sales figures to increased long-term evolution (LTE) mobile network subscribers and rising data consumption of its customers. Operating profit was boosted by the victory in the court fight involving interconnection fees. Its net income benefited from record-high earnings from SK Hynix.

Its marketing expenses increased 6 percent from a year earlier to 759.6 billion won amid heated competition over new subscribers during first-quarter releases of new smartphones. Investment jumped 49.8 percent on year to 117.2 billion won due to the expansion of networks.

Market analysts believe SK Telecom’s consolidated operating profit would grow this year after four-year stagnancy as its money-losing subsidiaries are doing better. SK Broadband saw the number subscribers to its Internet Protocol TV (IPTV) increase 12.1 percent on year to 4.07 million in the first quarter, boosting sales from the IPTV business 21.7 percent to 235.6 billion won. Losses at its platform unit SK Planet also eased.

The number of total subscribers of SK Telecom rose 3.1 percent on year to 29.83 million in the January-March period, of which LTE subscribers expanded 10.9 percent to 21.65 million to account for 72.6 percent. Data usage per user rose almost 30 percent to 5.4 gigabyte (GB).

By Kim Gyu-sik

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]