SK Telecom (US:SKM)2025-10-30 02:00Financial Data and Key Metrics Changes - Consolidated revenue for Q3 2025 was 3,978.1 billion, representing a 12.2% decline year-on-year, primarily due to a 50% tariff discount in August and various membership discounts [8][10] - Operating income dropped significantly by 90.9% year-on-year to 48.4 billion, reflecting the adverse financial impact of the cybersecurity incident [10] - Net income turned negative due to penalties associated with the cybersecurity incident [11] Business Line Data and Key Metrics Changes - The number of 5G subscribers increased by approximately 240,000 in Q2 to 17.26 million, indicating a gradual recovery in the fixed and mobile business [18] - Revenue from the AI business grew by 35.7% year-on-year, contributing positively to the company's overall performance [24] - AI Data Center revenue rose by 53.8% year-on-year to 149.8 billion, driven by the acquisition of the Pan-gil Data Center [27] Market Data and Key Metrics Changes - The company is focusing on expanding its customer base through the launch of AIR, a digital communication service aimed at users of unlocked devices [20][62] - The AI business is being reorganized into a more cohesive structure, enhancing efficiency and competitiveness in the market [22] Company Strategy and Development Direction - The company aims to restore stability and resume dividend payments while focusing on continuous innovation in information security and customer trust restoration [15][40] - Plans include expanding data center operations and enhancing AI capabilities, with a goal of achieving trillion won level revenue by operating over 300MW of data center capacity by 2030 [76] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging period due to the cybersecurity incident but expressed commitment to turning the crisis into an opportunity for renewed growth [37][42] - The company anticipates a gradual recovery in mobile revenue and aims to return to pre-incident operating profit levels by maximizing cost efficiency [52] Other Important Information - The company decided not to declare dividends for Q3 2025 due to the financial impact of the cybersecurity incident, with future dividends to be reviewed based on performance and cash flow [15][54] - The Ulsan AI Data Center is under construction, with expected profit generation starting in 2027 [74] Q&A Session Summary Question: Dividend focus for Q4 and outlook for 2026 - Management indicated that while Q4 may see continued revenue decline due to ongoing discounts, the impact should be smaller than in Q3, and they aim to restore dividends in line with improved performance [51][55] Question: Customer recovery post-cybersecurity incident - Management reported that customer churn was contained, resulting in a net neutral balance between additions and losses, with a focus on qualitative recovery rather than just numerical [59][60] Question: Progress on Ulsan AI Data Center and future plans - Construction of the Ulsan AI Data Center is progressing smoothly, with expected revenue generation starting in 2027, and plans for additional data center facilities are being explored [73][76] Question: Charging for ADAS service - The company plans to review a B2C paid model for ADAS, targeting a launch in the first half of 2026, while focusing on improving usability and expanding the customer base [83]