Q3 2023 SK Telecom Co Ltd Earnings Call

Speaker 1: This will start with a presentation followed by a divisional Q&A session.

And followed by your divisional Q&A session.

Speaker 1: If you have a question, please press star 1, then press star 1 on your phone during the Q&A.

If you have a question. Please press star one that I start and one on your phone during the Q&A.

Now we shall commence the presentation on the fiscal year 2023 third quarter earnings results by SK Telecom.

Speaker 1: Now we shall commence the presentation on the fiscal year 2023 third quarter earnings results by SK Telecom.

Speaker 2: Thank you for your attention.

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Speaker 3: Good afternoon. I am Hee Jun Jung, IRO of SK Telecom. Thank you for joining SK Telecom's earnings conference call.

Good afternoon, I am Jeong Arrow of SK telecom. Thank you for joining SK Telecom's earnings conference call.

Speaker 2: Thank you for your attention.

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Today, we will first deliver a presentation on major events quarterly earnings highlights and business performances, which will be followed by a Q&A session.

Speaker 2: Today we will first deliver our presentation on major events, quarterly earning highlights and business performances, which will be followed by a Q&A session.

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Speaker 2: The call is attended by our executives from relevant business divisions, including Chin Leung Kim, CFO of SK Telecom, and we are providing some consecutive interpretation for the call.

Quality is attended by our executives from relevant business divisions, including Timberland Kim CFO of SK Telecom, we are providing consecutive interpretation for the call.

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Speaker 3: As you may know, I would like to remind you that all forward-looking statements are subject to change depending on various factors such as market and macro situations.

As you May know I would like to remind you that all forward looking statements are subject to change depending on various factors such as market and macro situations Gramercy, if we must make it smoother let me now present our CFO.

North America, SK Telecom CFO, Kim do you want me to.

Speaker 3: Good afternoon, this is Chinwon Kim, CFO of SK Telecom.

Afternoon. This is gene hwan, Kim CFO of SK Telecom.

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Speaker 2: Number of comments from our players. Please refer to the Q&A Morning, members. Thank you.

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Speaker 3: In September , ST Telecom announced the AI Pyramid strategy to become a global AI company. It aims to lead industrial innovation and achieve its vision of a global AI company through efforts to strengthen its own capabilities to deepen customer relationships.

In September SK Telecom announced the AI pyramid strategy to become a global company. It aims to lead industrial innovation and achieve its vision of a global AI company through efforts to strengthen its own capabilities to deepen customer relationships by advancing its own AI technologies and launched.

Speaker 3: by advancing its own AI technologies and launching AI services, and through cooperation with diverse domestic and foreign partners, including the KAI Alliance, the Global Telco AI Alliance, Anthropic and OpenAI. We ask for your continued interest and support for our new endeavors.

<unk> AI services and through cooperation with diverse domestic and foreign partners, including Teekay AIA Alliance the global Telco AIA Alliance Anthropic and open AI, we ask for your continued interest and support for our new endeavors.

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Now let me report on the consolidated financial results for Q3 of 2023.

Speaker 3: Now let me report on the consolidated financial results for 2-3 of 2023.

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Speaker 3: Thanks to improved earnings of SK Telecom and SK Broadband, consolidated revenue reported 4 trillion, $402.6 billion, up 1.4% year-over-year and 2.2% year-on-year. Operating income in Q3 posted $498 billion, up 7% year-over-year and 7.5% year-on-year.

Thanks to improved earnings of SK Telecom and SK broadband consolidated revenue reported four trillion $402 6 billion, one up one 4% year over year and two 2% Q on Q operating income in Q3 posted 498 billion, one up 7% year over year and seven.

5% Q on Q.

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Speaker 3: Net income posted 308.2 billion won, up 25.5% year over year, but down 11.4% QoQ due to the base effect of one of gains in Q2.

Net income posted $308 2 billion, one up 25, 5% year over year, but down 11, 4% Q O Q due to the base effect of one off gains in Q2.

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Speaker 3: On a non-consolidated basis, revenue posted $3,148,400,000,000 thanks to gains in roaming business. Operating income and net income reported $407.1 billion and $250.4 billion.

On a non consolidated basis revenue posted three trillion $148 4 billion. One thanks to gains in roaming business operating income and net income reported $407 1 billion, one and 254 billion one respectively.

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Speaker 2: Thank you for your attention.

Speaker 3: Let me now turn to Q3 business highlights and strategic directions in accordance with the AEI pyramid strategy.

Let me now turn to Q3 business highlights and strategic directions in accordance with the AI pyramid strategy.

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First serving as the foundation of the AI Pyramid AI infrastructure is an area, where SK telecom's technological capabilities are concentrated including AI data centers, AI semiconductor and multi element.

Speaker 3: First, serving as the foundation of the AEI pyramid, AEI infrastructure is an area where SK Telecom's technological capabilities are concentrated, including AEI data centers, AEI semiconductor, and multi-LLM.

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Speaker 2: As the data senters per thirdhyped, the strategic output performance to increased rate of a perfor tsunami helps the global backbone of the AI network range of state systems to strengthen the stress level for around 3 percent in the series not matter. Thus, we needannekan to benchmark the demand for concern.

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Speaker 3: Data center revenue continued its growth trend up more than 30% year over year in the third quarter. Preparations for the opening of new data centers are well underway to meet the growing demand for data centers triggered by the AI market. We plan to introduce energy-saving solutions like immersion cooling systems and hydrogen fuel cells, and enhance data center operational efficiency through AI-based data center infrastructure management.

Data center revenue continued its growth trend up more than 30% year over year in the third quarter preparations for the opening of new data centers are well underway to meet the growing demand for data centers triggered by the AI market, we plan to introduce energy saving solutions like immersion cooling system and hydrogen fuel cell.

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Speaker 3: Zepion, an AI semiconductor company established by SK Telecom, will launch a next generation inference AI chip X330 at the end of this year. X330 has approximately twice the computation of performance and 1.3 times the power efficiency compared to the latest inference chips in the market. Zepion will also cooperate with diverse companies to secure competitiveness in software.

That'd be one and AI semiconductor company established by SK Telecom will launch a next generation inference AI Chip X 33, Oh at the end of this year.

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Speaker 2: Thank you for your attention.

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Speaker 3: SK Telecom is also pursuing a multi-LLM strategy where a two-track approach is taken to secure diverse LLM lineup and overall platform that encompasses the LLMs. To this end, we are advancing our own LLM based on our AI technology brand A.X and high quality data accumulated over several decades.

SK Telecom is also pursuing a multi LLM strategy, where a two track approach is taken to secure diverse LLM lineup and overall platform that encompasses the LLS to this and we're advancing our own LLS based on our AI technology brand X and high quality data.

Over several decades simultaneously, we're collaborating strategically with a wide range of domestic and foreign AI companies, including Anthropic open AI and <unk> technology.

Speaker 3: Simultaneously, we are collaborating strategically with a wide range of domestic and foreign AI companies, including Anthropic, OpenAI, and Conan Technology.

Carney diverse projects are underway and during next year, the global AI platform Corporation newly established in the U S is planning to release, an LLS customized for telcos and launch an AI platform to support effective utilization of the multi LLM.

Speaker 3: Currently, diverse projects are underway and during next year, the Global AI Platform Corporation, newly established in the US, is planning to release an LLM customized for telcos and launch an AI platform to support effective utilization of the multi-LLM.

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Speaker 3: In the area of AIX, which is the middle layer of the AI pyramid, we will innovate customer experience and boost productivity by applying AI to our internal core businesses such as MNO, broadband and enterprise, while expanding the use of our AI capabilities to various external business areas such as mobility, AI healthcare and media to create added value.

In the area of AI X, which is the middle layer of the pyramid, we will innovate customer experience and boost productivity by applying AI to our internal core businesses, such as M. N O broadband and enterprise, while expanding the use of our AI capabilities to various external business area.

Such as mobility, and healthcare and media to create added value.

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Speaker 2: Thank you for your attention.

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Among the internal areas of AI ex our M&A business has an established customer base with 15, one 5 million <unk> subscribers as at the end of September we will solidify our superb mobile business competitiveness by using AI technology to conduct marketing establish AI based <unk>.

Speaker 3: Among the internal areas of AIX, our MNO business has an established customer base with 15.15 million 5G subscribers as of the end of September . We will solidify our superb mobile business competitiveness by using AI technology to conduct marketing, establish AI-based mobile networks, and enhance operational efficiency.

Networks and enhance operational efficiency.

Speaker 2: For those who want to see more videos like this, please subscribe to our channel.

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Speaker 3: As of the end of September , the pay TV subscribers and broadband subscribers of SK broadband reached 9.52 million and 6.87 million respectively. Going forward, SK broadband's pay TV service will evolve into an AI TV that offers diverse AI services such as AI curation and AI home.

As of the end of September the pay TV subscribers and broadband subscribers of SK broadband reached 952 million and $6 $87 million, respectively going forward SK broadband pay TV service will evolve into an AI TV that I'll first divers AI services, such as AI duration and AI.

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As for enterprise business, a ICC big data analytics platforms, and custom and platform type generative AI models will be major growth drivers of the market here. The multi LLM will be combined with AI solutions like vision, AI language, AI and big data AI.

Speaker 3: As for enterprise business, AICC, big data analytics platforms and custom and platform type generative AI models will be major growth drivers of the market. Here, the multi-LLM will be combined with AI solutions like vision AI, language AI, and big data AI. The cloud business is on track to meet its annual target with revenue in Q3 growing nearly 40% year over year.

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Speaker 3: Moving on to the external areas for AIX, SK Telecom signed a collaboration agreement with Jovi Aviation in September to jointly participate in the KUIM Grand Challenge, which marks a concrete step to secure a stable supply of UAM aircraft for the first commercialization of UAM service in Korea by 2025. We will combine AI technology and UAM to lead the way in an era of AI mobility that will change the paradigm of mobility.

Moving onto the external areas for a X SK telecom sign a collaboration agreement with GE aviation in September to jointly participate in the K Uhm Grand Challenge, which marks a concrete steps to secure a stable supply of uhm aircrafts for the first commercialization of <unk> service in Korea by 2020.

Five we will combine AI technology any U N to lead the way in an era of AI and mobility that will change the paradigm of mobility.

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Speaker 3: In addition, Excalibur, an AI-based veterinary x-ray analysis solution, was launched only a year ago, but it is currently used in over 300 veterinary clinics around the country, making it a representative veterinary AI service. SK Telecom is further enhancing the performance of Excalibur and pursuing global expansion by entering a partnership with Anikom Holdings, the largest provider of pet insurance in Japan, in October .

In addition, Excalibur on AI based AI based veterinary X Ray analysis solution was launched only a year ago, but it is currently used in over 300 veterinary clinics around the country, making it a representative veterinary AI service SK Telecom is further enhancing the performance of X.

Caliber and pursuing global expansion by entering a partnership with Omnicom holdings, the largest provider of pet insurance in Japan in October.

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Speaker 3: In the AI service area located at the top of the AI pyramid, we will continue to promote a.service, which was officially launched in September , and pursue global expansion through the development of personal AI assistance or PAAs for the global market. We believe that PAAs and Metaverse Services will be integrated in the future, and that next-commerce services, including subscription, will ultimately be part of the AI service domain.

In the AI service area located at the top of the Pyramid. We will continue to promote <unk> Dot service, which was officially launched in September and pursue global expansion through the development of personal AI assistance or.

For the global market, we believe that Paa's and whatever services will be integrated in the future and that next commerce services, including subscription will ultimately be part of the AI service domain.

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Speaker 2: Thank you for your attention.

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AI, a dot will evolve into a personal AI assistant by innovating customers communications experience and expanding the use of AI services for daily lives capitalizing on our Knowhow and domestically proven AI services, including call recording in summary, sleep management and real time into.

Speaker 3: AI ADOT will evolve into a personal AI assistant by innovating customers' communications experience and expanding the use of AI services for daily life.

Speaker 3: Capitalizing on our know-how and domestically proven AI services, including call recording and summary, sleep management, and real-time interpretation during a call, which will be launched soon, we will localize and advance these services through cooperation with the Global TALCO AI Alliance members.

Appreciation during our call, which will be launched soon we will localize and advanced <unk> services through cooperation with a global Telco AI Alliance members. Then we will launch P. As in many parts of the global market simultaneously to quickly gain leadership in the AI service market.

Speaker 3: Then we will launch PAAs in many parts of the global market simultaneously to quickly gain leadership in the AI service market.

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Speaker 2: This is in line with the in-app payment-based economic system introduced in October .

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Speaker 3: If land has attracted nearly 50% of MAU from overseas, and global cooperation with various partners, including Deutsche Telekom and T-Mobile US, is on track.

If land has attracted nearly 50% of Mou from overseas and global cooperation with various partners, including Deutsche Telekom and T. Mobile U S is on track the large subscriber base of Eastland will begin to use the in App transaction based economic system that was introduced in October.

Speaker 3: the large subscriber base of IFLAND would begin to use the in-app transaction-based economic system that was introduced in October , which will facilitate the creation of a virtual cycle of premium content production and consumption as well as monetization, thereby contributing to the expansion of the Metaverse platform.

Which will facilitate the creation of a virtual cycle of premium content production and consumption as well as monetization, thereby contributing to the expansion of the <unk> platform.

Speaker 2: K-Woojoo has reached more than 2.2 million users in the third quarter of the month. In addition to YouTube Premium, K-Woojoo continues to expand its offering, including Netflix, which is due next year, and is evolving into an AI-based subscription commerce platform.

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Speaker 2: Meanwhile, TDAIL is preparing for the next commerce with Big Data and AI-based customized service codewords, such as transferring 10 billion won to the first half of the transaction.

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With <unk> exceeding $2 2 million in Q3 T Universe is expanding the list of impactful partners such as Youtube premium and preparing to include Netflix next year to transform T. Universe is an AI based subscription commerce platform.

Speaker 3: With MAU exceeding $2.2 million in 2003, T-Universe is expanding the list of impactful partners such as YouTube Premium and preparing to include Netflix next year to transform T-Universe as an AI-based subscription commerce platform. Also, T-DEALS GMB in the first half of 2023 surpassed $100 billion won. We are preparing for next-generation commerce through advanced personalized services based on big data and AI.

So T deals <unk> in the first half of 2023 surpassed 100 billion won we are preparing for a next generation commerce through advance personalized services based on big data and AI.

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Finally, let me report on our shareholder return policy.

Speaker 3: Finally, let me report on our shareholder return policy.

Speaker 2: The 3rd quarter distribution fund was confirmed to be 830 won per week, which is the same as last quarter.

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Speaker 3: The board determined the 3rd quarter DPS to be the same as the previous quarter at 831.

The board determined in the third quarter EPS to be the same as the previous quarter at 831.

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Speaker 3: In addition, as we announced in July , our plan to purchase Treasury shares worth $300 billion won is well underway. We will complete the share buyback within the six months of the trust contract period and then cancel $200 billion won worth of Treasury shares.

In addition, as we announced in July our plan to purchase Treasury shares worth 300 billion. One is well underway, we will complete the share buyback within the six months of the trust contract period, and then cancel 200 billion won worth of Treasury shares.

Speaker 2: I will do my best to make sure that the value of the company and shareholders will be maximized through the leap to a full-fledged global AI company.

Capital gains global AI company Repayable tier product to your customer to do that you got hooked to the ship channel targets.

Speaker 3: We will continue to do our best to ensure that corporate value and shareholder value will be maximized through transformation into a global AI company.

We will continue to do our best to ensure that corporate value and shareholder value will be maximized through transformation into a global AI company.

Well put it away and instead of when it shows up to your questions. Some of them are familiar contaminants. We ask for your continued support and encouragement. Thank you.

Speaker 2: We ask for your continued support and encouragement.

Vikram <unk> Q&A session or stockholder August meter, we will now begin the Q&A session.

Speaker 4: We will now begin the Q&A session.

Speaker 1: Now, Q&A session will begin. Please press star 1, that is star and 1, if you have any questions.

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Now Q&A session will begin please press star one there is one if you have any questions questions will be taken according to the order you ask question number started one where cancellations. Please press star two star and two on your phone.

Speaker 1: Questions will be taken according to the order. You have pressed the number star 1. For cancellation, please press star 2, that is star M2 on your phone.

Speaker 4: The first question will be provided by Sujin Kim from Mirae Asset Securities. Please go ahead with your question.

Tom will accumulate <unk> Mimi meter. The first question will be provided by switching Kim from <unk> Securities. Please go ahead with your question.

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Speaker 4: I think the response is very good. I would like to ask if you can share the details of the membership status or MAU. I would also like to ask if there is a business model that you are planning in the future through ADOT.

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I'm Kim Jin from mirror at Santa Thank you for the opportunity I would like to ask two questions. The first question has to do with your other guidance on AI related revenue.

Speaker 3: I'm Kim Soojin from Mira Edset. Thank you for the opportunity. I would like to ask two questions. The first question has to do with your guidance on AI-related revenue. You mentioned about promoting AI businesses and can you share with us any specific revenue target by 2028 and what kinds of businesses will be able to generate revenue in the near term among various AI-related businesses?

You mentioned about promoting AI businesses and can you share with you with us any specific revenue target by 2028, and what kinds of businesses will be able to generate revenue in the near term among various AI related businesses. The second question has to do with the Ada service eight.

Speaker 3: The second question has to do with the A.Service. A.D. was officially launched about a month ago, and I understand that there is very positive response in the market. So if you can, please share with us specific numbers, including the number of subscribers and the MAU. Also, I'd like to know if there are any specific business models or features that you are planning to include for A.D. in the future.

<unk> was officially launched about a month ago and I understand that there is very positive response in the market. So if you can please share with us specific numbers, including the number of subscribers and the Mou.

Also I'd like to know if there are any specific business models or features that you are planning to include for Adi in the future.

Speaker 2: Yes, last September we went to the Analysts' Day event.

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Speaker 2: Thank you.

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Speaker 2: As you all know, we divided the area into AI infrastructure, AIX, and AI service.

Yeah, you're servicing a what I'll call centers.

Speaker 2: This includes not only U-Mobile, which is currently the largest beneficiary, but also businesses in the new growth area that have not yet had sales.

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As you know at the Analyst day in September our CEO mentioned and introduce the AI pyramid strategy that SK telecom is going to pursue.

Speaker 3: As you know, at the Analyst Day in September , our CEO mentioned and introduced the AI pyramid strategy that SK Telecom is going to pursue. And the AI pyramid strategy includes largely AI infrastructure, AIX, and AI service. They include not only the fixed and mobile business that we have, which is the largest profit source, but also new growth businesses, which may not necessarily generate significant revenue at this time.

And the.

The AI parent pyramid strategy includes largely AI infrastructure, AI X and AI service. They include not only the fixed and mobile business that we have which is the largest profit source, but also new growth businesses, which may not necessarily generate significant revenue at this time.

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Speaker 2: I am ambitiously aiming to secure up to 36% by 2028.

In addition to our existing fixed and mobile business. The AI related domains aimed to advance new growth businesses utilizing AI. It's revenue contribution was roughly 9% in 2022, but our ambitious goal is to increase this number to 36% by 2028.

Speaker 3: In addition to our existing 610 mobile business, the AI-related domains aim to advance new growth businesses utilizing AI. Its revenue contribution was roughly 9% in 2022, but our ambitious goal is to increase this number to 36% by 2028.

Speaker 2: If you were to pick the area where you would like to see the fastest growth, I think it would be the data center, which is the core infrastructure of AI. I'm also looking forward to the X-330, which is being developed by SAFION, which I mentioned earlier.

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Speaker 3: When it comes to the specific businesses and areas that may be able to produce tangible results in the near term, I would say first of all that we have data center business and AI semiconductor business which is being pursued by Zypione with a new x330. In addition, we have many businesses as part of the AI service area, which is the top of the AI platform, AI pyramid. They include personal AI assistant and AI based subscription commerce platform and we are planning to evolve our subscription service utilizing AI. In addition, we will continue to use AI to strengthen customer engagement.

When it comes to the specific businesses in areas that may be able to produce tangible results in the near term I would say first of all that we have data center business and E. AI semiconductor business, which is being pursued by <unk> with the New X 330. In addition, we have so many businesses as.

Out of the AI service area, which is the top of the AI platform AI pyramid. They include personal AI assistant and AI based subscription commerce platform and we are planning to evolve our subscription service utilizing AI in.

In addition, we will continue to use AI to strengthen customer engagement.

Speaker 2: Yes, so if you look at each area, the management strategy manager will give us additional answers on the details. Recently, we launched an iPhone call recording service, which is getting good response in the market. In this regard, Kim Ji-hoon, who is in charge of this issue, will give us additional explanation on the current market situation and feedback.

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Speaker 4: Now, as for specific details by each category or each domain, Mr. Choi Hwan-seok, head of the Corporate Strategy Office, will provide more details. In addition, we launched the iPhone call recording service recently, and it is gaining good response in the market. And regarding this, Mr. Kim Ji-hoon, head of growth, will

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Hello, I am <unk>, the head of corporate strategy office as the CEO CFO just mentioned among the AI businesses in areas, we are expecting high growth from several businesses, including the data center business AI semiconductor enterprise solutions and of subscription Commerce business model.

Speaker 3: Hello, I am Chae Won-tok, the head of Corporate Strategy Office. As the CFO just mentioned, among the AI businesses and areas, we are expecting high growth from several businesses, including the data center business, AI Semiconductor, Enterprise Solutions, and Subscription Commerce business model that is linking AI and other services.

That is all linking AI and other services.

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Speaker 3: First of all, from respect to data centers, we expect a big growth in demand for GPU data centers with the advent of the AI era. And SK Telecom will scale off the data center business through AI DCIM for operational efficiency, an immersion cooling system for energy efficiency, and expanding sites and partnering with other industries and expanding into the global market.

First of all with respect to data centers, we expect a big growth in demand for a GPU data centers with the advent of the AI era, and SK Telecom will scale up the data center business through AI D. C. I N for operational efficiency and immersion cooling system for energy efficiency and expanding sites and par.

Entering with other industries and expanding into the global market.

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Speaker 3: Next, Saipyon, our AI semiconductor company, will launch X330, an inference AI accelerator chip, soon. And after securing diverse references, such as the use in global hyperscale data centers, we expect to generate more meaningful sales starting from 2025.

Soon after securing diverse references such as to use in global Hyperscale data centers, we expect to generate more meaningful sales starting from 2025.

Speaker 5: Third, the enterprise solution market is an area where big changes and growth are expected due to AI. We plan to expand the AI enterprise solution business, which is specialized by industry, based on existing AI technology and newly developed LLM technology, for various industries such as public, financial, manufacturing, etc.

Similar to enterprise solutions, some of them a year or so.

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Speaker 3: The enterprise market is expected to grow and change dramatically due to AI and we will utilize our own Vision AI and LLM technology capabilities to expand a specialized AI enterprise solution business targeting various industries like the public sector, finance, and manufacturing.

The enterprise market is expected to grow and change dramatically due to AI and we will utilize our own vision AI and LLM technology capabilities to expand specialized a enterprise solution business targeting various industries like the public sector finance and manufacturing.

Speaker 5: These numbers areViewistic categories, into more detailed drawing like pace Aai, given their new build editions that have experienced deepcier process videos like today. High machines are varying at accuracy and knowledge ranges focusing solely on larger procedures and dependya on image development. Effective figures and mie? punishing

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For AI service, we are getting positive responses regarding a dot which was officially launched at the end of September. Thanks to its many useful features related to phone calls and so we will drive growth by linking AI based new business models with the subscription Commerce service model.

Speaker 3: For AI service, we are getting positive responses regarding A.Dat, which was officially launched at the end of September , thanks to its many useful features related to phone calls. And so we will drive growth by linking AI-based new business models with the subscription commerce service model.

Yes.

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Speaker 3: Other than new businesses related to AI, our fixed and mobile business, our existing business, will continue to account for a significant portion of the company's earnings. And for these existing businesses, we will use AI technology to deepen customer relations and focus on improving profitability. And we will strengthen AI marketing through AICC and reduce expenses by improving network operation efficiency also using AI. Thank you.

Other than new businesses related to AI, our fixed and mobile business, our existing business will continue to account for a significant portion of the company's earnings and for these existing businesses. We will use AI technology to deepen customer relations and focus on improving profitability and we will strengthen and marketing.

Through AIC and reduce expenses by improving network operation efficiency also using AI.

Thank you.

Speaker 6: I will give you a quick summary of the AIA service. I am Kim Joon, the chief of AIA service. First, I will give you a quick summary of the AIA service.

In Chicago.

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Moving on I am Kim <unk> head of growth and I'd like to provide you with some more details regarding AI service in particular <unk>.

Speaker 3: Moving on, I am Kim Jae-hoon, Head of Growth, and I'd like to provide you with some more details regarding AI service, in particular ADOT.

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Speaker 3: Fence official launch on new features such as cold recording and sleep management have been added to ADOT to evolve it as a personal AI assistant. And they've been receiving much interest and positive customer responses in the market.

Since official launch new features such as call recording and fleet management has been added to a dot to evolve it as a personal AI assistant and they've been receiving much interest and positive customer responses in the market in.

Speaker 3: In particular, the iPhone call recording function that we recently introduced has been leading the growth of ADOT thanks to its popularity. So recently, ADOT ranked number one in the free app category of Apple App Store and number one in the lifestyle category of Google Play Store. It is still ranked high with sustained user acquisition.

In particular, the iPhone call recording function that we recently introduced has been leading the growth of a Dod thanks to its popularity. So recently a dot ranked number one in the free App category of Apple App store and number one in lifestyle category of Google play store. It is still rent tie with sustained user acquisition.

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Speaker 6: Thanks for coming our channel!!

Speaker 6: Thank you for your attention.

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Speaker 3: And going forward, we will add other functions, including personalized recommendations and diverse AI features to continue to innovate customer experience and to help the experience of using ADOT phone to lead to the use of diverse ADOT content.

And going forward, we will add other functions, including personalized recommendations and a diverse AI features to continue to innovate customer experience and to help the experience of using a dot phone to lead to the use of divers Adas content.

Speaker 3: and to build capabilities as a personal AI assistant, AIDOT is not only strengthening internal capabilities, but also forging collaboration with external partners. We are reinforcing the existing cooperation with startups such as Scatterlab and ASTP and preparing for new partnerships with diverse companies.

And to build capabilities as a personal AI assistant eight odd is not only strengthening internal capabilities, but also forging collaborations with external partners. We are reinforcing the existing cooperation with startups, such as scatter lab in AC and preparing for new partnerships with diverse companies.

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Speaker 3: And for the first month since the official launch, we have been focusing on experimenting and validating diverse aspects for customer experience innovation. So there are additional features that we will add during the rest of the year. So please understand that we would like to report on the market responses on a later occasion rather than giving you any numbers at this point in time. And I'd like to also comment on your question regarding business models related to ADOT.

And for the first month since the official launch we have been focusing on experimenting and validating diverse aspects for customer experience innovation. So there are additional features that we will add during the rest of the year. So please understand that we would like to report on the market responses on our later occasion, rather than giving you any numbers at this.

Point in time and I'd like to also comment on your question regarding business models related to a dot.

Adas and optimize something rather cheap.

Speaker 6: As I mentioned earlier, ADOT is examining the possibility of subscription-type profit models by combining various functions such as sleep management and photo profiles. In particular, in the case of some business owners in the market, there is a swing in AR content such as photo profiles in the form of monthly salary or monthly fee payment, so we believe that similar profit creation methods will be possible at ADOT.

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For <unk>, we are considering the possibility of bundling up various services, including our fleet management and photo.

Speaker 3: For ADOT, we are considering the possibility of bundling up various services, including sleep management and photo profile, to offer them as a bundled subscription model. In the market, already some companies are charging on a monthly basis or per usage regarding AI content, including photo profile, and we are considering similar business models for ADOT.

Profile to offer them as bundled a subscription model.

In the market already some companies are charging on a monthly basis or a per usage regarding AI content, including a photo profile and we are considering similar business models for a dot.

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Speaker 3: Another potential business model is to take profit by charging fees on various transactions and services that occur in the process of using various ADOT services and as well as charging fees on advertising which is based on personalized content offering. However, at this point in time, we are more focused on expanding the user convenience after the official launch to enhance our service experience for customers. We are constantly introducing new features and advancing them. Thank you.

Another potential business model is to take profit by by charging fees on various transactions and services that occur in the process of using various <unk> services and as well as some charging fees on advertising, which is based on personalized content offering. However at this point in time, we are.

More focused on expanding the user convenience after the official launch to enhance our service experience for our customers. We're constantly introducing new features and advancing them. Thank you.

Speaker 1: The following question will be presented by Junsuk Kim from KB Securities. Please go ahead with your question.

Tableau 10 minutes, you should put in Cambridge in Ghana Keynesianism you mean, neither the following question will be presented by Jee Kim from Kb Securities. Please go ahead with your question.

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Speaker 6: Thank you for your questions. KB Junpong Kim, Mr. Junpong.

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Speaker 6: Thank you for your attention.

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Speaker 3: Hello, I am Kim Jun-seo from KB Securities. Thank you for this opportunity. I'd like to ask two questions. The first one is about third quarter earnings results and the second question has to do with your roaming business.

Hello.

I'm Kim <unk> from Kb Securities. Thank you for this opportunity I would like to ask two questions. The first one is about third quarter earnings results and our second the second question has to do with your bromine business. So when you look at the earnings results for the third quarter. They are very good and better than what the market had expected so I'd like to understand.

Speaker 3: So when we look at the earnings results with a third quarter, they are very good and better than what the market had expected. So I like to understand your forward projection for the following quarters in terms of earnings because there are various factors that may impact your earnings results, including the power prices, as well as inflation and other factors.

Your forward protection for the following quarters in terms of earnings because there are various factors that may impact your earnings results, including the power prices as well as inflation and other factors.

Speaker 3: The second question has to do with your roaming business. Now the pandemic is over and more people are traveling overseas. So I'd like to understand to what degree your roaming revenue has recovered and what is your outlook going forward.

The second question has to do with your roaming business now the pandemic is over and more people are traveling overseas. So I'd like to understand to what degree your roaming revenue has recovered and what is your outlook going forward.

Speaker 2: Yes, in terms of 3Q's performance, as I said, we are operating at 4,980 won.

There are some commercial stockholders on such.

We are pursuing.

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Thank you for the question as you now understand our Q3 operating income posted 498 billion, one up 7% year over ear and it is thanks to a profit growth of both SK telecom and SK broadband as well as earnings improvement of other subsidiaries as you mentioned there have been several.

Speaker 3: As you understand, our Q3 operating income posted 498 billion won, up 7% year-over-year. It is thanks to profit growth of both SK Telecom and SK Broadband, as well as earnings improvements of other subsidiaries.

Speaker 3: As you mentioned, there have been several cost factors, including higher energy prices and inflation. However, SK Telecom was able to grow its operating income thanks to solid growth of MNO revenue, including roaming. And we were able to continue the stabilizing trends of major expenses such as marketing and depreciation.

Cost factors, including a higher energy prices and inflation. However, SK telecom was able to grow its operating income thanks to solid growth of MMO revenue, including roaming and we were able to continue the stabilizing trends of major expenses, such as marketing and depreciation and as a result.

Speaker 3: And as a result, our operating income grew 4.7% year over year.

Our operating income grew four 7% year over year moving onto SK broadband. Its operating income also was able to grow thanks to <unk> revenue growth centered on data centers and the growth of high <unk> subscribers for IP, TV, which contributed to revenue growth and cost efficiency.

Speaker 3: Moving on to SK Broadband, its operating income also was able to grow thanks to B2B Revenue Growth centered on data centers and the growth of high RPU B2C subscribers for IPTV, which contributed to revenue growth and cost deficient.

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Speaker 2: I'd like to ask about the outlook for the 4th quarter. Even though it's a short-term outlook, there are some things to be careful about. In the case of the 4th quarter, there are seasonal factors, such as foreign trade, advertising, and general fees. The cost tends to increase.

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Speaker 2: Thank you for your attention.

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Moving onto the outlook for the fourth quarter. It is a short term outlook, but we need to be more cautious because the fourth quarter is typically when seasonal factors lead to higher expenses, including outsourcing service costs advertising expenses and other fees. However.

Speaker 3: Moving on to the outlook for the fourth quarter, it is a short-term outlook, but we need to be more cautious because the fourth quarter is typically when seasonal factors lead to higher expenses, including outsourcing service costs, advertising expenses and other fees. However, when we look at the overall picture, major operating expenses such as marketing and depreciation has been quite stable. So we are focusing on improving our earnings on a year-over-year basis.

However, when we look at the overall picture major operating expenses, such as marketing and depreciation has been quite stable. So we are focusing on improving our earnings on a year over year basis.

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Speaker 3: Another factor will be macroeconomic and macroexternal uncertainty. And recently, external uncertainties are growing due to global interest rate hikes to respond to rising inflation and unstable global geopolitics triggered by Israel-Hamas war following the war in Ukraine. But as you may know, our business and our cost structure has only limited exposure to external risks such as inflation, interest rates, and exchange rates.

Another factor will be macroeconomic and macro external uncertainty and recently external uncertainties are growing due to global interest rate hikes to respond to rising inflation and unstable global geopolitics triggered by Israel Hummus War following the war in Ukraine, but as you.

They know our business and our cost structure has only limited exposure to external risks such as inflation interest rates and exchange rates. So we will utilize our management resources and capabilities to make sure that our earnings in the future will be managed stably.

Speaker 3: So we will utilize our management resources and capabilities to make sure that our earnings in the future will be managed stably.

A.

Speaker 2: Or don't about to the roaming aterial. I ING go to Y about. When you doming it, check a roaming mat. They help TR than and some margad and ry Kim Jong TA marketing to left sometimes case whe can some.

Stronger you told us that on roaming of Arizona whatever metric.

In conjunction with one or two of them.

But when you're growing at obviously kickwheel chicken are roaming the octreotide.

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Excuse me.

Speaker 3: Moving on to your second question, as you mentioned, roaming has been a major driver of our revenue growth. So with respect to the recent recovery trend of roaming revenue as well as related outlook, I'd like to hand over to Mr. Kim Ji-hyung, head of Integrated Marketing Strategy Office.

Moving on to your second question as you mentioned roaming has been a major driver of our revenue growth. So with respect to the recent recovery trend of roaming revenue as well as cell related outlook I'd like to hand over to Mr. <unk> <unk> head of integrated marketing strategy office.

Our marketing programs and Kim is on India.

Hello, I am Kim <unk> head of integrated marketing strategy office.

Speaker 3: Hello, I'm Kim Jiyoung, Head of Integrated Marketing Strategy Never

Speaker 7: We expect to see an increase in roaming sales for the first time this year due to COVID-19.

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For the first time since the pandemic roaming revenue is expected to recover to the pre COVID-19 level.

Speaker 7: For the first time since the pandemic, roaming revenue is expected to recover to the pre-COVID level.

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Speaker 3: While the number of overseas travelers in this quarter is just 76% of the number before the pandemic in 2019, roaming usage has increased 1.5 times. So this year's roaming revenue is expected to surpass the 2019 level.

Well the number of overseas travelers in this quarter is just 76% of the number before the pandemic in 19.

Before the pandemic in 2019 roaming usage has increased one five times. So this year's roaming revenue is expected to surpass the 2019 level.

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We believe that this result is attributed to customer base expansion through marketing efforts that help customers pay less such as increasing data at existing rates and finally roaming promotions.

Speaker 3: We believe that this result is attributed to customer-based expansion through marketing efforts that help customers pay less, such as increasing data at existing rates and family roaming promotion.

Speaker 7: In particular, it is gaining popularity to the extent that accumulated users will reach 280,000 after its release. The number of roaming users under the age of 34 who did not use roaming through the Young Adults 50% Discount Deck, which has been in progress since June , has increased by about twice, twice as much.

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EBIT two days during the quarter.

Speaker 3: And since launched in June , the youth price plan has gained nearly 280,000 users cumulatively and this plan offers 50% discount for roaming, resulting in a two-fold increase in roaming usage by customers younger than the age of 34, a segment which did not really use roaming much in the past.

And since launched in June the youth price plan has gained nearly 280000 users cumulatively and displaying offers 50% discount for roaming resulting in a twofold increase in roaming usage by customers younger than the age of 34, a secondhand segment, which did not really use roaming much in the past.

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Speaker 3: Furthermore, almost half of first-time roaming users continue to use roaming for next trips. Therefore, the current growth in roaming usage is not just contributing to revenue recovery in 2023, but also is expected to become a major growth driver in terms of revenue in the medium to long term.

Furthermore, almost half of first time roaming users continue to use roaming for next ships are therefore, the current growth in roaming usage is not just contributing to revenue recovery in 2023, but also is expected to become a major growth driver in terms of revenue in the medium to long term.

Kieran.

Speaker 7: I will do my best to make key roaming a must-have for overseas travelers. I will continue to provide you with free travel expenses and convenient services. That's all.

Implicit promo to China, obviously through predominantly in Europe in particular in terms of liquidity need somebody through horizontal is anemia we.

Speaker 3: We will continue to introduce affordable price plans and convenience services to make T-Romings a necessity for overseas travel. Thank you.

We will continue to introduce affordable price plans and convenient services to make T roaming in necessity for overseas travel. Thank you.

And then Q1.

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Speaker 1: Thank you. Please go ahead with your question. The last question will be presented by Hye-jae Kim from Daesin Securities. Please go ahead with your question.

Tom would have attributed to ship an intention to connect conversion you mean meter.

Last question will be presented by <unk> Kim from <unk> Securities. Please go ahead with your question.

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Speaker 6: Please let us know if you have any plans to launch a 5G low-cost payment system. Thank you.

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Speaker 3: I am Kimi Trev from Tension Securities. Today, the Ministry of Science and ICT announced measures to lessen the communications-related burden for citizens. So in this regard, I'd like to know if you have any plans to introduce a law of 5G handsets to use LTE price plans and how is this going to impact your overall trend of 5G subscriber acquisition in the future. And I'd also like to know if you have any plans to offer more affordable lower-end 5G price plans in the future.

I'm Kimi Jae from <unk> Securities today, the Ministry of Science, and ICT announced measures to lessen the communications related burden for citizens. So in this regard I'd like to know if you have any plans to introduce allow <unk> handsets to use LTE price plans and how is.

Is this going to impact your overall trend of <unk> subscriber acquisition in the future and I would also like to know if you have any plans to offer more affordable lower end <unk> price plans in the future.

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Speaker 2: Thank you for your attention.

Okay.

Great.

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Back in July the government announced measures to facility to facilitate competition in the telecom market and we have been implementing our market operation strategy, which is based on leading market competition and expanding the base of 50 services by constantly increasing customers choices and benefits and we.

Speaker 3: Back in July , the government announced measures to facilitate competition in the telecom market, and we have been implementing our market operation strategy, which is based on leading market competition and expanding the base of 5G services by constantly increasing customers' choices and benefits.

Speaker 3: And we mentioned at the previous earnings call that these business strategies and activities are well aligned with the government's policy goals and directions which aim to increase benefits for users by promoting competition over service quality.

Mentioned that the previous earnings call, the dis business strategies and activities are well aligned with the government's policy goals and directions, which aimed to increase benefits for users by promoting competition over our service quality.

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Speaker 3: From this perspective, regarding today's government announcement, in an environment where 5G subscribers continue to grow, we are positively considering to sign up for LTE price plans with 5G handsets and vice versa to promote benefits for users. And regarding more details, I'd like to hand over to Mr. Kim Ji-hyung, Head of Integrated Marketing Strategy Office.

So from this perspective regarding today's government announcements in an environment where of Iot subscribers continued to grow we are positively considering to sign up for LTE.

LTE price plans with <unk> handsets, and vice versa to promote benefits for users and regarding more details I'd like to hand over to Mr. Kimzey hung head of integrated marketing strategy office.

Speaker 7: I'm Kim Ji-young from Dong-A Marketing. As 5G has increased, we are looking at LTE and 5G. It will be implemented in November .

It's almost near term Dunkin' zoning.

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And finally, the insurance environment.

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We remain on distributed generation.

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I am Kim Jiang head of integrated marketing strategy office as the number of <unk> subscribers increases we are positively considering to allow <unk> handsets to use LTE price plan and vice versa, and we will be able to offer these plans as early as within November.

Speaker 3: I am Kim Ji-young, head of the Integrated Marketing Strategy Office. As the number of 5G subscribers increases, we are positively considering to allow 5G handsets to use LTE price plans and vice versa, and we will be able to offer these plans as early as within November .

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As of the end of September the share of five day subscribers in terms of handsets is 66% since its been four and a half years since the <unk> launch the rate of <unk> subscriber growth has been slowing but the upward trend is still very clear and we expect this upward trend to continue.

Speaker 3: As of the end of September , the share of 5G subscribers in terms of hand sets is 66%. Since it's been four and a half years since the 5G launch, the rate of 5G subscriber growth has been slowing, but the upward trend is still very clear and we expect this upward trend to continue.

Speaker 7: In the case of sales, I think we need to monitor both the up and down sides of the payment system.

Mitch you didn't win in June of <unk> will do what is going on as I was hoping my articles or whatever I was similar.

Speaker 3: And in terms of their revenue impact, we will need to consider and monitor both cases of going up the price plans and down the price.

And in terms of their revenue impact, we will need to consider and monitor at both cases of going up the price plans and down the price plans.

Tom and <unk>.

Speaker 7: We'll keep our driving station right here in the dam.

It happened recently.

Next I'd like to comment on our plans regarding affordable lower end price plans.

Speaker 3: Next, I'd like to comment on our plans regarding affordable lower-end price plans.

Speaker 7: Different orders of Blue

<unk> is almost 10 years and <unk> is another winner.

As the <unk> market continues to mature it is very natural that there are more diverse price plans and options available in the market, So and Cogeco, Inc.

Speaker 7: As the 5G market continues to mature, it is very natural that there are more diverse price plans and options available in the market.

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Speaker 3: With putting our top priority on enhancing customer convenience and satisfaction, we will make necessary preparations by comprehensively considering market competition situations and our capacity and our capabilities. We will also aim to produce positive results such as improved customer perception and product competitiveness. Thank you.

With with print our top priority on enhancing customer convenience and satisfaction, we will make necessary preparations by comprehensively considering market competition situations and our capacity and our capabilities and we will also aim to produce positive results such as improved customer perception.

And competitive products.

Product competitiveness. Thank you.

Speaker 3: Japanese interpretation This concludes the earnings conference call for the third quarter of 2023 of SK Telecom. If you need further explanations or additional questions, please contact the IR team anytime. Thank you.

If you.

You go through it.

Some of them get stuck with your conference call will do much to August Donadio, chief entrepreneurial profitable now for a few months under the new Toyota hurdle when you're just about a month from Sanford.

This concludes the earnings conference call for the third quarter of 2023 of SK Telecom. If you need further explanation for additional questions. Please contact the IR team anytime. Thank you.

Yeah.

[music].

Speaker 8: you