SK Telecom Co.,South Korea's top mobile operator reported a two-fold growth in its Q4 profit in 2012.
Their net profit came to 519.1 billion won ($477.5 million) in the October-December period, compared with a profit of 195.5 billion KRW in 2011. The operating profit jumped 37.6 percent to 544.6 billion won and revenue rose 6 percent on-year to 4.2 trillion won.
They claimed that this was due to a decrease in marketing costs - meaning what?
The results come as the country’s three mobile operators ― SK Telecom, KT Corp. and LG Uplus Corp. ― have been slowing down their marketing drive recently amid the communications watchdog’s move to cool market competition.
In December last year, the Korea Communications Commission (KCC) fined the three firms a combined 11.9 billion won and imposed business suspensions for giving out excessive subsidies to lure LTE subscribers.
So, this was why a stronger bottom line was attributed to a reduction in marketing costs. SK Telecom’s marketing expenses in the three-month period reached 754 billion won, sharply down from 851 billion won a year earlier.
SK Telecom, which leads the local LTE market with 7.5 million subscriber as of last year, is currently under a 22-day business suspension from attracting new subscribers.
So really, for the whole year, the company’s net profit totaled 1.1 trillion won, which is actually down 29.5 percent from the previous year. Revenue gained 2.3 percent to 16.3 trillion won, and operating profit jumped 37.6 percent to 544.6 billion won. The top mobile carrier said its leadership in the LTE market and business growth in affiliates SK Broadband and SK Planet propelled its revenues. The mobile carrier said it plans to refrain from subsidy competition this year and bolster new growth engines such as solution, media and healthcare.