UPDATE 1-SK Telecom Q3 profit above fcast, shifts strategy

* Q3 operating profit up 23 pct, mobile data sales up

* Shifts focus to services for industrial sectors

* Reins in marketing costs as competition eases

* Shares down 1.1 pct vs 2 pct drop in KOSPI (Adds details, CEO comments)

By Rhee So-eui

SEOUL, Oct 29 (Reuters) - SK Telecom (017670.KS), South Korea's top mobile carrier, reported a better-than-expected 23 percent rise in quarterly operating profit on Thursday and said it would focus on telecom services for industrial sectors.

Operators in the saturated Korean market -- SK, KT Corp (030200.KS) and LG Telecom (032640.KS) -- have been struggling to find new revenue sources as the domestic market is fully saturated and attempts to expand overseas have proved challenging.

Heavy costs to attract and retain users are squeezing margins while pressure to lower tariffs has clouded the mobile sector's outlook.

SK's chief executive Jung Man-won said the company would make networking and telecom services supporting other industries its future growth engine, aiming to generate 20 trillion won ($16.9 billion) in revenue from such services in 2020.

"Given the market's saturation and the resistance to rising service charges, there's a limit in expanding business by simply pursuing more users and service usages," Jung told a news conference.

He said SK would break away from excessive reliance on individual mobile users and would work with companies in the retail, financial, education, construction and healthcare industries. In 2020, more than half of revenue from those new services could come from overseas, SK said.

SK, which controls about half of the country's mobile market, posted a 618.8 billion won ($522.3 million) operating profit in the third quarter to September, above a forecast for a 585.9 billion won profit from Thomson Reuters I/B/E/S.

The result compares with operating profits of 504.1 billion won a year earlier and 553.4 billion won in April-June.

Quarterly sales grew 5 percent from a year earlier to 3.06 trillion won, in line with a consensus forecast.

Revenue from wireless Internet services rose 7 percent from a year earlier. Growing use of smartphones and wireless services such as mobile games and music downloads are helping SK, amid stalling growth in overall revenue per user.

SK said a marketing war among operators, which intensified this year, has eased since August. Its marketing spending in the third quarter came at 834.1 billion won, up 15 percent from a year earlier but down 12 percent from the previous quarter.

SK's subscriber base at the end of September stood at 24.14 million, up 6 percent from a year earlier.

SK Telecom shares fell 1.1 percent as of 0429 GMT, outperforming a 2 percent drop in the wider market . The stock has fallen about 14 percent so far this year through Wednesday, against a 43 percent rise in the wider market . (Editing by Jacqueline Wong)