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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
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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
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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