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SK Telecom Q1 Net Profit Drops 12.5% After Massive Data Breach

SK Telecom's first-quarter net profit fell 12.5% year-on-year to 316.4 billion won, impacted by the aftermath of a massive data breach last year. Operating profit dropped 5.3% to 537.6 billion won, but exceeded 500 billion won for the first time since the cyberattack. AI services helped drive a rebound in operating profit from the previous quarter, with AI data centre sales rising 89.3%. The company plans to strengthen B2B services with AI packages and continue developing AI foundation models.

Key Points: SK Telecom Q1 Net Profit Down 12.5% on Data Breach

  • Net profit fell 12.5% to 316.4B won
  • Operating profit down 5.3% but exceeded 500B won for first time since cyberattack
  • AI data centre sales surged 89.3% on-year
  • Mobile subscribers increased by 210,000 after losing 600,000 in breach
2 min read

SK Telecom Q1 net profit down 12.5 pc amid fallout from data breach

SK Telecom reports 12.5% drop in Q1 net profit to 316.4B won amid fallout from last year's data breach, but AI services drive operating profit rebound.

"SK Telecom said improved profitability in its artificial intelligence (AI) services helped drive the rebound in operating profit from the previous quarter. - SK Telecom"

Seoul, May 7

SK Telecom, South Korea's leading mobile carrier, said on Thursday its net profit fell 12.5 per cent from a year earlier as the company continued to deal with the aftermath of a massive data breach last year.

Net income came to 316.4 billion won (US$218 million) in the first three months of this year, down from 361.6 billion won a year ago, the company said in a regulatory filing, reports Yonhap news agency.

Operating profit for the January-March period fell 5.3 percent on-year to 537.6 billion won, marking the first time operating profit has exceeded the 500 billion-won level since the large-scale cyberattack in April last year.

Revenue fell 1.4 percent to 4.39 trillion won. SK Telecom said improved profitability in its artificial intelligence (AI) services helped drive the rebound in operating profit from the previous quarter.

The number of mobile subscribers increased by about 210,000 in the first quarter. SK Telecom had lost about 600,000 subscribers following a massive cyberattack on its main servers in April last year but later ramped up marketing efforts by expanding membership benefits and subsidies.

Its AI business also continued to grow. Sales at its AI data centre business rose 89.3 percent on-year to 131.4 billion won in the January-March period.

The mobile carrier said it plans to strengthen its business-to-business services with a comprehensive AI package covering infrastructure, models and services.

SK Telecom also said it will continue developing AI foundation models and expanding integration with global AI technologies to create synergies between its AI services and core telecommunications business.

Meanwhile, South Korean stocks narrowed gains late on Thursday morning as investors hunted for profits following a record-breaking rally amid rising optimism for an end to the U.S.-Iran war.

Hitting a new all-time intraday high of 7,523.84 shortly after the opening bell, the benchmark Korea Composite Stock Price Index (KOSPI) shifted to negative territory, adding 29.34 points, or 0.4 percent, to 7,413.9 as of 11:20 a.m.

Traders sold to lock in profits after the KOSPI jumped 6.5 percent a day earlier to breach the 7,000-point mark for the first time and close at 7,384.56.

- IANS

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Reader Comments

N
Neha E
Good to see the operating profit bouncing back despite the cyberattack fallout. But honestly, losing 600k subscribers initially shows how fragile customer trust can be. Indian telecoms like Jio and Airtel should really invest more in cybersecurity before they face similar issues.
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Jacob K
SK Telecom's AI pivot is smart—89% growth in data centre sales is no joke. Meanwhile, South Korean stocks being volatile after hitting 7,500 shows how jittery markets are even with good news. Interesting times globally.
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Siddharth J
The recovery is commendable, but I'm a bit skeptical about how quickly they say they've resolved the subscriber loss. Marketing spend might have bought temporary loyalty, not trust. Still, the AI infrastructure push is promising—India's B2B market could learn from their integrated AI package approach.
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Daniel Q
Interesting that the KOSPI hit a record intraday high then fell. Profit-booking after a 6.5% jump in one day is expected, but the underlying optimism about ending the US-Iran war seems fragile. SK Telecom's performance is a good bellwether for the Korean economy.
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Priya S
Finally, a telco that's not just about voice and data! The 89% growth in AI services is a clear signal—telcos globally need to diversify into AI, cloud, and data centres. India's Bharti Airtel and Reliance Jio should take this as a blueprint for the next decade. 👏

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