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Investor Presentation28 November 2006


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Disclaimer

This presentation has been prepared by SK Telecom C o., Ltd. (“the Company”). This presentation is being presented solely for your inf ormation and is subject to change without notice. No representation or warranty, exp ressed 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 informat ion contained in the presentation.

This presentation does not constitute an offer or i nvitation to purchase or subscribe for any shares of the Company, and no part of this pres entation shall form the basis of or be relied upon in connection with any contract or comm itment.

The contents of this presentation may not be reprod uced, redistributed or passed on, directly or indirectly, to any other person or publ ished, in whole or in part, for any purpose.


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Korean Wireless Market OverviewKorean Wireless Market Overview

SKT OverviewSKT Overview

Investment HighlightsInvestment Highlights

Table of ContentsTable of ContentsTable of Contents

�� 2006 Operating Results2006 Operating Results

�� Growth StrategyGrowth Strategy

�� Data BusinessData Business

�� Global BusinessGlobal Business

�� Commitment to ShareholdersCommitment to Shareholders

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Korean Wireless Market Overview


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Korean Mobile Market Trend

Highly Penetrated Market but Further Growth Expecte d Highly Penetrated Market but Further Growth Expecte d ……

Korean Mobile MarketKorean Mobile MarketKorean Mobile Market

• Mostly CDMA based post-paid

market with WCDMA at its early stage

• Recent market penetration growth

at 2~3% point per annum

• One of the most sophisticated market

with high wireless Internet service

penetration

29,04732,342 33,592

36,58638,342 39,703

82%79.4%75.9%

61.2%70.1%67.9%

2001 2002 2003 2004 2005 Sep-06

Subscribers (000’s) Penetration

Source: MIC, NSO


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…… Driven by LeadingDriven by Leading --Edge TechnologyEdge Technology

Korea ; Powerhouse of New TechnologyKorea ; Powerhouse of New TechnologyKorea ; Powerhouse of New Technology

HSDPA: High-Speed Downlink Packet Access, HSUPA: High-Speed Uplink Packet Access, WiBro: Wireless Broadband

’02 ’07’03 ’06

100M

WiBro(SKT/KT)

HSDPA(SKT/KTF)

WCDMADO Rev.0

(SKT/KTF/LGT)2M

14.4M

DO Rev.A(LGT)

HSUPA

20M

50M

3M

3G 3.5G 4G

. . . . . .

2.5G


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Market Share

A Three Player Market with SKT Being the Undisputed LeaderA Three Player Market with SKT Being the Undisputed Leader

SKT:50.5%

KTF:32.2%

LGT:17.4%

20,03212,773

6,899

(‘000, %)

Competitive Landscape of Korean WirelessCompetitive Landscape of Korean WirelessCompetitive Landscape of Korean Wireless

Revenue(KRW bn)

7,891

3,8732,917

SKT KTF LGT

Churn Rate

Source : MIC & Company reported data, Accumulated figures from Jan.06 to Sep. 06

SKT KTF LGT

(%, Monthly Average )

2.0%

2.7%3.1%

EBITDA(KRW bn)

3,201 1,284599

SKT KTF LGT

7

SKT Overview


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2006 Operating Results2006 Operating Results2006 Operating Results

(Unit: KRW bn)

Revenue

Net Income

EBITDA

Marketing Expense

to Revenue

Capital Expenditure

10,500

N/A

4,000

20.5%

1,600

2006E2006Guidance

7,891(75%)*

1,167

3,201(80%)

19.7%

720(45%)

2Q 20063Q ’06 (Accumulated )

10,161

1,871

4,288

17.2%

1,466

2006E2005

•••• Higher ’06 marketing expenses

driven by the introduction of

handset subsidy

• Positive bottom line impact with

the narrowed gap in

interconnection changes

On Track to Meet the Year 2006 TargetOn Track to Meet the Year 2006 Target

2006 Operation Review

* ( ) shows progress against the guidance ’06


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Further Growth to Come from Core & New Business Are as

Growth StrategyGrowth StrategyGrowth Strategy

Core BusinessCore Business

New BusinessNew Business Satellite DMB

Convergence Biz

Telematics

Global Business

US, Vietnam, & China

Data Business

HSDPA WiBro

MelonMobileCyworld


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•••• Korean wireless Internet market

shows rapid growth for the last

5 years

•••• Slowed growth this year due to

customer value enhancement

initiatives such as the termination of

adult contents services

• Further growth potential exists in the

Korean wireless Internet market

e.g. HSDPA “T-Login” Svc etc.

Source: MIC, NSO *( ) shows SK T’s Wireless Internet Revenue

Korea Wireless Internet Market

2001 2002 2003 2004 2005

5 yr CAGR : 6

0%

484(259)

1,086(731)

1,736(1,320)

2,424(1,823)

3,188(2,459)*

Data Business - MarketData Business Data Business -- MarketMarket

Growth Wireless Internet Business Market

676 670

06 1Q 06 2Q 06 3Q

(KRW bn)

SKT’s Wireless Internet Quarterly Revenue(KRW bn)

663


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Further Data growth potential from HSDPA & Further Data growth potential from HSDPA & WiBroWiBro as Infrastructureas Infrastructure

Data Business - NetworkData Business Data Business -- NetworkNetwork

Positioning

2G 1x. Voice Centric Users

1x/DO. Data Active/ Heavy User

HSDPA

. Data Heavy User. Multi/Advanced Service User

High Speed

Data • Wide coverage with high mobility

• Differentiated value creation

�Video telephony & related VAS�Global roaming�Premium multimedia service

Complimentary Services

Premium

WiBroNomadic

Data Heavy User

• Complimentary to HSDPA

• High speed data service in hot zone

• Primarily for data-heavy user in

nomadic environment

HS

DP

AW

iBro


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…… And Innovative Services OfferingsAnd Innovative Services Offerings

Source: Company data

•••• Music portal site where MP3 files are downloaded through internet and mobile handsets

•••• ’06(E) Revenue of KRW 70 bn / 8mm subscribers •••• Korea’s #1 paid music site in terms of revenue &

subscriber base

•••• Mobile version of popular web based community portal with 19M users

•••• ’06(E) Revenue of KRW 53 bn•••• 640,000 users per month

•••• Satellite Digital Media Broadcasting Servicewith 15 Video Channel & 19 Audio Channel

•••• Commercialized in May ’05 •••• Over 900,000 subscribers in November ’06

Data Business - Innovative ServicesData Business Data Business -- Innovative ServicesInnovative Services


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InvestmentPrinciple

Transplant Resource & Capability of SKT

Local partnership to minimize risk and maximize suc cess

Global Business Global Business Global Business

Committed to Value Creation with Focus on the Curre nt PortfolioCommitted to Value Creation with Focus on the Curre nt Portfolio

Total Investment US$1 billion CBUS$360 million (74%)* US$220 million (50%)

Development

• SKT to be exclusive and sole partner in relation to China Unicom’s CDMA Business

• Created joint task force in six areas

- Joint handset sourcing

• 1 million subscribers & 6.1% M/S as of Sep. ’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

� Penetration � Population

� 30.0%� 1,312 million

� 20.8%� 84 million

� 72.0%� 298 million

VietnamVietnam U.SU.S ChinaChina

* ( ) shows effective control


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Solid Track Record in shareholder ReturnSolid Track Record in shareholder Return

①①①①①①①① Special dividends of approx. KRW 300 Special dividends of approx. KRW 300 bnbn in 2004in 2004

②②②②②②②② Treasury buyback & cancellation of Outstanding shar es using abouTreasury buyback & cancellation of Outstanding shar es using abou t KRW 200 t KRW 200 bnbn in 3Q 2006in 3Q 2006

③③③③③③③③ 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

11

22Trend of Dividend Payout Ratio / Share Buyback

Shareholder ReturnShareholder ReturnShareholder Return

33

15

Investment Highlights


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Investment HighlightsInvestment HighlightsInvestment Highlights

•• Solid FundamentalsSolid Fundamentals

•• Significant Data Growth PotentialSignificant Data Growth Potential

•• Value Creation from Global PortfolioValue Creation from Global Portfolio

•• Commitment to ShareholdersCommitment to Shareholders


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THANK YOU

investor presentation - sk telecom · 2014-08-28 · kimlia [printed: august 2, 2006 10:13 pm]...

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