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SK Telecom Q1 net profit steady, beats forecast

Wed Apr 23, 2008 10:05pm EDT

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SEOUL, April 24 (Reuters) - SK Telecom Co (017670.KS), South Korea's top mobile carrier, reported a slight fall in quarterly profit on Thursday, weathering the impact of a bitter marketing war as mobile operators seek to woo subscribers from rivals.

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SK, which controls 50.5 percent of the country's mobile market, earned 382.9 billion won ($386.5 million) in net profit in the January-March quarter, compared with a 396.3 billion won profit a year earlier.

The result beat an average forecast of a 277 billion won profit from Reuters Estimates.

Subsidies for new handsets are weighing on earnings as SK and second-ranked KTF Co Ltd 032390.KS compete to win users for more profitable third-generation mobile services, such as video calls and wireless Internet.

SK is set to command a stronger product portfolio after it took control of broadband operator hanarotelecom (033630.KQ), but public pressure to lower tariffs may linger and force the firm to discount bundled products, which offer combinations of mobile, broadband TV and internet services, analysts say.

Shares in SK Telecom dropped 25 percent in the first quarter, compared with the broader market's 10 percent slide. ($1=990.7 Won) (Reporting by Rhee So-eui; Editing by Keiron Henderson and Louise Heavens)

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