SK Telecom Co.,Ltd Q1 FY2026 earnings call

At the beginning of 2026, focused on strengthening fundamental business competitiveness centered on customer value. First quarter saw net subscriber add and core telecom business fundamentals returning to normal. AI business performance improving due to strategy of focus and prioritization. Resumed dividend payments starting this quarter. MNO achieved handset subscriber net add through diverse measures. Fixed - line business has stable results. AI business strategy of focus and prioritization showing effects with data center revenue growth and plans for additional scale - up.

Consolidated revenue posted KRW 4.39 trillion, up 1.5% Q - on - Q. Consolidated operating income was KRW 537.6 billion. MNO achieved a handset subscriber net add of approximately 210,000 in the first quarter. AI data center revenue is maintaining a growth trend year - over - year, driven by Pangyo Data Center and higher utilization of Gasan Data Center.

Goal to improve full year earnings further from current levels. For telecom, efforts to restore customers' trust led to Q1 handset subscriber net add. For AI, reviewing measures to improve structural profitability. Plan to conduct dividends stably as earnings recover. Board of Directors will discuss and decide full year dividends considering business performance and financial structure.

Q: As you mentioned during your earnings presentation, the company started quarterly dividend payment starting from Q1. And I'd like to understand the overall shareholder return plan and the size of the shareholder return for the entire year of 2026. Secondly, I can see that the company was able to produce earnings results that are similar to the levels prior to the cybersecurity incident. Is it safe to understand that this type of trend will become a new normal? And I'd like to get some guidance from the company on the full year basis earnings outlook.

A: First, on annual earnings outlook: Q1 operating profit reversed downward trend after cybersecurity incident and is approaching pre - incident levels. Goal is to improve full year earnings further through restoring telecom business profitability, expanding AI data center - centered growth businesses and continuous productivity enhancement. On shareholder returns: Resumed quarterly dividend payments with Q1 DPS of KRW 830. Will conduct dividends stably as earnings recover. Full year dividends will be decided by Board of Directors considering business performance and financial structure later.

Q: You have produced a recovery trend in terms of the net subscriber adds as well as market share. So I'd like to understand the overall subscriber market share target for SK Telecom and the marketing direction and how you're planning to strike a balance between profitability and marketing. Secondly, you reported that the AI DC revenue in the first quarter has increased by 89% year - over - year. And I'd like to understand how this AI DC business is making meaningful contribution to your profitability.

A: On MNO subscriber targets: 2026 started with handset subscribers down year - over - year, but Q1 achieved 208,000 net add through changes in competitive landscape, back - to - school and flagship handset marketing. Will target new segments and focus on securing high - LTV subscribers while avoiding excessive spending competition. On AI DC profitability contribution: AI DC revenue has growth trend, but only announced revenue numbers, profitability indicators not disclosed. AI DC is comparable to existing telecom business in profitability and has room to become more profitable.

Q: Telecom's equipment providers, both in Korea as well as abroad are focusing on developing AI - RAN, which is about using telecommunications network infrastructure for AI functions such as inference. So I'd like to get SK Telecom's view on AI - RAN. And secondly, there is an increasing demand and growth for AI traffic. And I'd like to understand what this increase in AI traffic, what kind of business opportunities will this bring to SK Telecom as a telco?

A: On AI - RAN: Evolving in two domains - using AI to improve telecom network infrastructure and using wireless network infrastructure as platform to provide AI services. Actively participating in technology research and standardization. Will comprehensively consider various aspects before adopting AI - RAN. On AI traffic: AI traffic is increasing but share in total traffic is still low. Considering ways to connect AI traffic with AI - RAN and distribute traffic across networks and will continue to explore relevant technology