SK Telecom Q4 FY2025 Earnings Call - Cybersecurity Costs Cripple Profits and Dividends, AI Data Centers and A.X K1 Are the Rescue Plan

Conference Moderator, SK Telecom: Good morning and good evening. Thank you all for joining the conference call for the SK Telecom earnings results. This conference will start with a presentation, followed by a Q&A session. If you have a question, please press star and one on your phone during the Q&A. Now, we will begin the presentation on SK Telecom’s fourth quarter of fiscal year 2025 earnings results.

Tae-hee Kim, IR, SK Telecom: Good afternoon. I am Tae-hee Kim, IR of SK Telecom. Let us begin the earnings conference call for fiscal year 2025. Today, we will first deliver a presentation on the financial and business highlights, followed by a Q&A session. Please note that all forward-looking statements are subject to change depending on various factors, such as market and management situations. Let me now present our CFO. Good afternoon. This is Jong-suk Park, CFO of SK Telecom. It is my first time to greet investors and shareholders as CFO. I wish you a Happy New Year, and I also wish all of you good health and happiness in the new year. In 2025, SK Telecom put priority on expanding operational improvements across the company and monetizing AI business, and made strenuous efforts to strengthen fundamental business competitiveness and secure a foundation for new growth drivers.

However, the cybersecurity incident and its subsequent developments also led us to a period of careful reflection, realizing that understanding and innovating on customer value, which is the essence of our business, is a prerequisite for a sustainable future. We will do our utmost to build SK Telecom with strong fundamentals, grounded in the trust of our customers. Let me now report on the financial results for fiscal year 2025. Consolidated revenue posted KRW 17,099.2 billion, down 4.7% year-on-year, due to sales of subsidiaries, net decline in subscribers following the cybersecurity incident, and implementation of the accountability and the commitment program, including tariff discounts.

Operating income reported KRW 1,073.2 billion, down 41.1% year-over-year, on the back of the decline in revenue, costs related to the cybersecurity incident, including USIM replacements and costs incurred during business restructuring at the end of 2025. Net income came in at KRW 375.1 billion, down seventy-three percent year-over-year, mainly due to penalty payments arising from the cybersecurity incident. Let me report on shareholder return. The financial impact of the cybersecurity incident persisted into the fourth quarter, and substantial costs were incurred in the process of business portfolio restructuring. As a result, the company decided not to pay out quarterly dividend for the fourth quarter.

Accordingly, the board of directors resolved to set the DPS for fiscal year 2025 at KRW 1,661, including the quarterly dividends already paid, which will be finalized after being approved at the annual general shareholders meeting in March. We will strive to restore our financial performance to return to previous dividend payout levels. Next, let me report on the current status and future directions of our telecom business and AI business. In 2025, our MNO business focused on addressing changes to the business environment caused by the cybersecurity incident. In 2026, with our priority on customer value innovation, we will strive to adhere to fundamental principles and standards in all areas, including quality, safety, and security, and to fully regain our customers’ trust.

We aim to improve our products and channels and achieve operational optimization centered on customer lifetime value, to regain fundamental business competitiveness and become the number one service provider from the customer’s perspective. Through this, we will also ensure that our financial performance recovers to previous levels. For AI business, we focused on solidifying a foundation for new growth in 2025. Starting this year, we plan to concentrate on areas where we excel to achieve tangible results. In 2025, AIDC revenue continued a two-digit growth trend, thanks to the increase in utilization rates of Gasan and Yangju data centers, and the acquisition of Pangyo Data Center. Also, construction of Ulsan AIDC has been underway since September last year. This year, we aim to accelerate growth by actively developing business expansion opportunities through business scale-up with an additional data center in the Seoul metropolitan region.

We plan to create new possibilities through in-house development and external partnerships for the AIDC solution business, which was launched to create synergies with AIDC business. Also, we will scale up the undersea cable business initiated in 2025. Furthermore, we aim to enhance efficiency and productivity of AI agent business and B2B AI business to produce meaningful outcomes. We plan to secure preferential opportunities to participate in various projects through our own AI foundation model project, which is in its second phase. SK Telecom is determined to improve MNO’s business fundamentals by strengthening core competitiveness in all business areas centered on customer value, and to restore profitability by producing AI business results driven by AI data centers. We ask for the continued support and interest of our investors and analysts as we work to turn this crisis into an opportunity to restore our customers’ trust. Thank you.

Now, we would like to begin the Q&A session.

Conference Moderator, SK Telecom: Now, Q&A session will begin. Please press star one, that is star and one, if you have any questions. Questions will be taken according to the order you have pressed the number star one. For cancellation, please press star two, that is star and two on your phone.

Unidentified Executive, SK Telecom: question is Jae-min Ahn of NH Investment & Securities.

Tae-hee Kim, IR, SK Telecom: The first question will be provided by Jae-min Ahn from NH Investment & Securities. Please go ahead with your question.

Jae-min Ahn, Analyst, NH Investment & Securities: 안녕하세요. 질문 기회 주셔서 감사합니다. 먼저 COO, CFO, 그리고 IR 실장님까지 새롭게 변화가 있으셨고, 시장에서 많이 기대를 하는 것 같습니다. 다시 한번 축하드리고, 저희도 잘 부탁드리고, 잘 부탁드리겠다는 말씀 드리고 싶습니다. 질문 두 가지 드리려고 하고요. 첫 번째는 일단 2026년에 대한 배당이 가장 궁금합니다. 작년에 실적 부진으로 인해서 배당을 많이 못 주셨는데, 올해는 배당 회복을 어느 정도 기대를 할 수 있는지, 그리고 이제 실적 정상화와 이게 같이 해서 말씀해 주시면 감사하겠습니다. 두 번째는 신임 경영진이 가장 중점을 두고 있는 전략 방향성에 대해서 궁금합니다. 두 가지 질문입니다.

Tae-hee Kim, IR, SK Telecom: I’m Jae-min Ahn from NH Investment & Securities. Thank you for giving me this opportunity to ask you questions. I can see that we now have new CFO, COO, as well as IRO, so there are new members to your, the management, and I believe that the market has high expectations upon this change. And so congratulations to all of you, and I hope that there will be good results coming from this management this year. I’d like to ask you two questions. The first question is that we would like to get some color on our dividend policy for 2026. Last year, due to some sluggish business performance, the size of the dividend payout to, shareholders was reduced. So what can we expect in terms of dividend payout for 2026, as well as the possibility of earnings normalization?

My second question has to do with the overall strategic directions and priorities for the new management this coming year. Thank you.

Unidentified Executive, SK Telecom: 질문 감사드립니다. 먼저 올해 실적 전망과 배당 방향성에 대해 답변드리겠습니다.

Tae-hee Kim, IR, SK Telecom: Thank you for your questions. First, I’d like to answer your question on this year’s earnings outlook, as well as dividend payout direction.

Unidentified Executive, SK Telecom: 우선 올해 실적에 대해서는 많은 분들이 사고 전 수준의 실적을 회복하는지를 궁금해하시는 것으로 알고 있는데, 매출은 일부 비핵심 자회사 매각과 무선 가입자 감소 영향으로 사고 전의 2023년 수준에는 미치지 못할 것으로 예상됩니다. 다만, 영업이익 측면에서는 통신 사업의 수익성 회복과 AI 사업의 자생력 확보에 집중하여 2023년에 근접하는 수준을 만들 수 있도록 노력하고자 합니다.

Tae-hee Kim, IR, SK Telecom: First of all, to comment on 2025 earnings performance, I understand that many people would like to know whether we can return to the pre-cybersecurity incident earnings levels. Due to sales of certain non-core subsidiaries and decline in MNO subscribers, revenue did not recover to the 2024 levels. However, in terms of operating income, we aim to return to the 2024 level as much as possible by improving profitability of the telecom business and improving the self-sustainability of the AI business.

Unidentified Executive, SK Telecom: 마케팅 네트워크 등 통신 사업 전반을 AI화화함으로써 생산성을 향상시키고 수익성을 제고할 것이며, 가입자 회복에 있어서도 비용과 효율의 균형에 집중할 계획입니다. AI 사업 또한 이익단계에 유의미하게 기여할 수 있도록 선택과 집중을 지속해 나갈 게... 예정인데, 특히 데이터센터 사업은 대규모로 확장을 추진하여 새로운 매출을 창출하고, 규모의 경제를 통한 수익성 개선도 함께 만들어 가겠습니다.

Tae-hee Kim, IR, SK Telecom: We will utilize AI across the telecom business, including marketing and network, to boost productivity and improve profitability. Also, we plan to focus on striking a balance between cost and benefit when it comes to subscriber acquisition. For AI business, we plan to continue to focus on areas where we can make meaningful earnings contribution. In particular, we will pursue meaningful expansion of data center business to create new revenue streams and improve profitability through economies of scale.

Unidentified Executive, SK Telecom: 실적과 연계하여 배당에 대해 말씀드리겠습니다.

Tae-hee Kim, IR, SK Telecom: Now, let me comment on the dividend payout outlook in connection to, earnings expectation.

Unidentified Executive, SK Telecom: 우선 3분기에 이어 기말 배당도 실시하지 못하게 되어 주주 여러분께 진심으로 송구한 말씀, 마음입니다. 사이버 침해 사고 관련 직접적인 재무적 영향이 컸고, 2025년 말 사업 포트폴리오와 조직을 정비하는 과정에서 일시적인 비용이 발생하면서 연간 배당 축소가 불가피하였음을 양해하여 주시기 바랍니다.

Tae-hee Kim, IR, SK Telecom: First of all, we sincerely apologize to our shareholders for not being able to pay the yearly and year-end dividend in the fourth quarter following the third quarter. The cybersecurity incident has had direct financial impact, and one-off costs were incurred in the process of restructuring our business portfolio and organization in 2025. Please understand that we had to reduce the size of the annual dividend payout for these reasons.

Unidentified Executive, SK Telecom: 2026년은 앞서 말씀드린 노력 등을 통해 실적 정상화를 최우선 목표로 할 예정이며, 아울러 예년 수준의 배당을 시행하기 위한 최선의 노력을 기울일 방침입니다. 주주 및 투자자 신뢰를 회복해 투자하고 싶은 회사 될 수 있도록, 비과세 배당 등 주주 가치 제고를 위한 방안도 함께 검토할 생각입니다.

Tae-hee Kim, IR, SK Telecom: Our number one priority in 2026 is to restore earnings through the measures that I mentioned earlier, and we will do our best to return the previous dividend payout levels. We will also consider other measures to increase shareholder value, such as tax-free dividend, to restore the trust of our shareholders and investors, and to ensure that SK Telecom is a company that people want to invest in.

Unidentified Executive, SK Telecom: ...보다 구체적인 내용은 경영 성과 및 재무 건전성, 그리고 성장 투자 이력 등 전체적인 capital allocation의 밸런스를 고려하여 이사회에서 논의할 예정입니다.

Tae-hee Kim, IR, SK Telecom: More details will be discussed at the board in consideration of business performance, financial positions, and funds for growth investments to achieve a balance in overall capital allocation.

Unidentified Executive, SK Telecom: 다음으로, 신임 경영진이 가장 중점을 두고 있는 전략 다양성에 대해 말씀드리겠습니다.

Tae-hee Kim, IR, SK Telecom: Now, I’d like to comment on the key strategic priorities for the new management.

Unidentified Executive, SK Telecom: 올해 SK Telecom은 통신과 AI 사업 모두 실질적인 경쟁력을 단단하게 다져가는 것을 최우선 목표로 삼고, 이를 위해 크게 세 가지 전략 방향으로 추진하고자 합니다.

Tae-hee Kim, IR, SK Telecom: Our priority for this year is to strengthen practical and substantial competitiveness in both telecom and AI business, and for this, we plan to pursue three main strategic directions.

Unidentified Executive, SK Telecom: the top priority, and based on this, we are in the process of customer-centered redesign of all elements of telecommunications, such as products, membership, channels, etc., centered on the real value that customers want. We will sequentially introduce them in the future.

Tae-hee Kim, IR, SK Telecom: First of all, restore market leadership through customer value innovation. We will place priority on customer value, which is the essence of our business, based on which we are currently redesigning all elements of our telecom business, including products, memberships, and channels, to offer real value that customers want. We will share more details in the future.

Unidentified Executive, SK Telecom: 둘째, AI 가속화를 통해 통신 사업의 생산성을 혁신하겠습니다. 마케팅, 네트워크, 고객 접점 등 모든 영역의 AI를 도입해 고객 경험을 제고하고 동시에 생산성도 높이고자 합니다. AI 기반 고객 생애 가치 모델링을 고도화하여 개인화된 오퍼링을 하고, 네트워크는 설계부터 구축 및 운영까지 AI 기반 자동화를 하고자 합니다.

Tae-hee Kim, IR, SK Telecom: Second, we will innovate business productivity through AI acceleration. We will apply AI in all areas, including marketing, network, and customer touchpoints, to improve customer experience and boost productivity. We will advance AI-based lifetime value modeling to provide personalized offerings and to use AI to automate network operations, including design, construction, and operation.

Unidentified Executive, SK Telecom: 셋째, AI 사업은 선택과 집중을 통해 지속 가능성을 확보하겠습니다. 변화된 환경에 따라 피보팅을 통해 당사가 잘할 수 있는 사업에 초점을 맞추는 한편, 비용 구조 효율화를 통해 수익성도 개선시켜 나가겠습니다.

Tae-hee Kim, IR, SK Telecom: Third, we will enhance sustainability of our AI business by focusing on our core strengths. We will pivot according to changing business environment, to focus on areas where we excel and improve profitability through cost structure improvement.

Unidentified Executive, SK Telecom: 이미 확고한 성장 동력으로 자리 잡은 AI 데이터센터의 경우, 울산 AIDC를 빠르게 구축할 것이며, 서울 지역 추가 데이터센터 등을 통해 스케일업과 AIDC 관련 다양한 솔루션을 통해서 새로운 BM도 창출해 갈 계획입니다.

Tae-hee Kim, IR, SK Telecom: AI data centers are already a strong growth driver for SK Telecom. We will quickly build the Ulsan AIDC and plan to add another data center in the Seoul region to scale up the AIDC business and create new business models to offer diverse solutions related to AIDCs.

Unidentified Executive, SK Telecom: 사업 전반에서 고객 가치 중심으로 본원적 경쟁력 강화를 우선시할 것이며, 다시 뛰는 SK Telecom의 모습을 보여드리겠습니다.

Tae-hee Kim, IR, SK Telecom: To sum up, we will focus on strengthening core business competitiveness in all business areas centered on customer value, and demonstrate how SK Telecom will make another leap forward.

Conference Coordinator, SK Telecom: 네, 다음 질문 받겠습니다.

Tae-hee Kim, IR, SK Telecom: Next question, please.

Conference Coordinator, SK Telecom: 다음으로 질문해 주실 분은 IBK투자증권의 김태현 님입니다.

Tae-hee Kim, IR, SK Telecom: The following question will be presented by Tae-hyun Kim from IBK Investment & Securities. Please go ahead with your question.

Unidentified Executive, SK Telecom: 네, 안녕하세요. 질문 기회 주셔서 감사드립니다. 저도 두 가지 질문드리고 싶은데요. 먼저 Anthropic 지분 가치에 대해서 시장에서 관심이 많은데, 이건 어느 정도로 보면 될지, 그리고 향후 유동화 계획이 있으신지도 궁금합니다. 그리고 두 번째는 이제 독자 AI foundation model 프로젝트 관련해서 우리의 경쟁력이 무엇인지, 그리고 향후에, 어떤 사업 기회가 있을지 좀 문의드립니다. 감사합니다.

Tae-hee Kim, IR, SK Telecom: I am Tae-hyun Kim from IBK Investment & Securities. Thank you for this opportunity to ask you questions. I would like to ask two questions. First of all, there is a lot of interest in the market about the value of the equity stake that you have in Anthropic, and I would also like to understand whether you are planning to liquidate your equity stake going forward. The second question has to do with your proprietary foundational model project. What is the strength that SK Telecom has in this regard, and what are some of the potential business opportunities we can expect going forward? Thank you for your questions. I’d like to answer the first question on our equity stake in Anthropic, and then the head of AI strategy planning will address your second question on our own foundation model project.

Unidentified Executive, SK Telecom: the current status and plans regarding the Anthropic equity stake.

Tae-hee Kim, IR, SK Telecom: First, let me comment on the current status and future plans regarding our equity stake in Anthropic.

Unidentified Executive, SK Telecom: 계약상 비밀유지 조항으로 인해 변동 시점에 즉시 정확한 지분율과 가치를 공개하기 어려운 점을 양해 부탁드리겠습니다. 다만, 당사가 보유하고 있는 투자 자산은 주기적으로 재평가해 사업 보고서에 반영하게 되어 있어, 곧 공시될 2025년 사업보고서에 지분율이 업데이트될 예정입니다.

Tae-hee Kim, IR, SK Telecom: First of all, please understand that we cannot disclose accurate details on shareholding ratio and value at the time of change due to confidentiality clauses in the contract. However, our invested assets are regularly revalued and reflected in the business report, so the 2025 business report, to be disclosed very soon, will have updates on our equity stake.

Unidentified Executive, SK Telecom: 지분 유동화 여부나 지분 가치에 대한 시장의 관심이 크다는 것은 인지하고 있습니다만, 이와 관련해서는 정해진 바가 전혀 없고, 같은 맥락에서 배당 재원 활용 가능성도 말씀드릴 부분이 없는 점도 양해 말씀드립니다.

Tae-hee Kim, IR, SK Telecom: We understand that the market is quite interested in a possible equity disposal or equity valuation, but, please understand that no decisions have been made in this regard, and there’s nothing that we can share at this point in time about the possibility of using it as part of funds for dividend.

Unidentified Executive, SK Telecom: 다음으로 독자 파운데이션 모델에 대해 AI 전략기획 실장이 답변드리도록 하겠습니다.

Tae-hee Kim, IR, SK Telecom: Now, I’d like to hand over to the Head of AI Strategy Planning to comment on the second question.

Dong-hui Choi, Head of AI Strategy Planning, SK Telecom: AI 전략기획 실장 최동희입니다. 독자 AI 파운데이션 모델 관련 경쟁력 및 사업 기회에 대해서 말씀드리도록 하겠습니다. SK텔레콤이 컨소시엄과 함께 개발 중에 있는 A.X K1은 국내 최초로 5000억 개의 매개변수를 적용한 초대형 모델입니다.

Tae-hee Kim, IR, SK Telecom: I’m Dong-hui Choi, Head of AI Strategy Planning. Let me answer your question on our competitiveness in foundation model and business opportunities. The A.X K1 that SK Telecom is developing together with the consortium members, is Korea’s first hyperscale AI model with more than 500 billion parameters.

Dong-hui Choi, Head of AI Strategy Planning, SK Telecom: A.X K1은 국내 최대 규모의 한국어 데이터셋을 활용했기 때문에 문화적 맥락까지 반영한 고품질 답변을 제공할 수 있어 차별화된 경쟁력을 보유하고 있다고 평가받고 있습니다.

Tae-hee Kim, IR, SK Telecom: This model is recognized as possessing differentiated competitiveness as it can provide high-quality responses in consideration of cultural context, because it is developed using the largest Korean dataset.

Dong-hui Choi, Head of AI Strategy Planning, SK Telecom: 향후 A.X K1은 B2C와 B2B 모두에서 사업 기회가 있을 것으로 기대되고 있습니다. B2C의 경우에는 내부적으로는 10 million 명 이상의 가입자를 확보하고 있는 A.에 탑재하여 많은 고객들이 사용할 수 있도록 하고, 컨소시엄 내 Liner 서비스에도 탑재하여 레퍼런스를 확대할 예정입니다.

Tae-hee Kim, IR, SK Telecom: We expect that A.X K1 will create a lot of business opportunities for both B2C and B2B business. For B2C, we plan to add the model to ADOT, which has more than 10 million users, to ensure that a large number of customers can access the model. We also plan to add references through Liner, a member of the consortium.

Dong-hui Choi, Head of AI Strategy Planning, SK Telecom: B2B에서는 A. Biz에 적용하여 업무 생산성 향상과 SK Hynix, SK Innovation 등 제조 계열사의 경쟁력 강화를 위한 사업화에도 활용할 수 있을 것으로 기대하고 있습니다. 컨소시엄 내 KRAFTON 등 버티컬 서비스에도 확대할 계획입니다.

Tae-hee Kim, IR, SK Telecom: For B2B, we plan to add this model to A. Biz for work productivity enhancement and provide a model to our manufacturing affiliates, such as SK Hynix and SK Innovation, to strengthen their competitiveness. Within the consortium, we plan to expand the use of the model to vertical services such as KRAFTON.

Dong-hui Choi, Head of AI Strategy Planning, SK Telecom: 당사는 정부 지원 등을 통해서 비용 효율적으로 초거대 자체 모델을 확보함과 동시에 2026년 말 최종 탑투 선정 시에는 AI 편의 극대화를 위한 범국민 B2C, B2C 사업, 산업 경쟁력 및 생산성 향상을 위한 AX 사업, 공공부문의 시스템 서비스 사업 등에 우선적으로 참여할 수 있을 것이라고 기대하고 있습니다.

Tae-hee Kim, IR, SK Telecom: We will continue to develop this hyperscale model in a cost-effective manner with government support. If we are selected as one of the top two at the end of 2026, we expect that we can secure preferential opportunities to participate in various projects, such as national B2C projects, to maximize benefits of AI, AX projects to enhance industrial competitiveness and productivity, and projects to upgrade systems and services in the public sector.

Unidentified Executive, SK Telecom: 다음 질문 받겠습니다.

Tae-hee Kim, IR, SK Telecom: Next question, please.

Conference Moderator, SK Telecom: 다음으로 질문해 주실 분은 대신증권의 김혜재 님입니다. The following question will be presented by Hoe-jae Kim from Daishin Securities. Please go ahead with your question.

Jae-min Ahn, Analyst, NH Investment & Securities: 안녕하십니까, 대신증권 김혜진입니다. 저는 무선 사업 관련해서 두 가지 질문 드리겠습니다. 최근 경쟁사에서도 사이버 침해 사고 발생으로 위약금 면제 조치를 취했는데, 그 영향이 어떻게 나타나는지 궁금합니다. 예를 들면 LG유플러스의 경우에는 25년 무선 가입자 증가폭이 컸고, 매출도 크게 증가했는데, 이러한 상황이 SK텔레콤에게도 적용될 수 있을지 궁금하고요. 아울러서 올해 가입자 증가 목표가 어느 정도 수준인지, 또 그에 따른 매출 전망은 어느 정도인지 궁금합니다.

Conference Coordinator, SK Telecom: ... 두 번째는 최고 경영진과 MNO 경영진 모두 새로운 분들께서 선임되셨는데요. 2026년 이후의 MNO 사업은 어떤 부분에 집중할 계획이신지도 궁금합니다. 감사합니다.

Tae-hee Kim, IR, SK Telecom: I’m Hoe-jae Kim from Daishin Securities. I’d like to ask you two questions regarding your MNO business. Due to the wavering of cancellation fee recently by your competitor, I can see that there was some impact on your business result. For instance, LG Uplus has demonstrated that they have seen an increase in their MNO subscriber base, as well as MNO revenue in 2025, thanks to this development. So I’d like to understand to what extent you benefited from this trend for SK Telecom as well. And I’d also like to understand your subscriber target for 2026, as well as MNO revenue outlook. My second question is that you have now new members in the MNO management as well as the company management.

What will be the key areas that you will focus on in your MNO business in 2026?

Conference Coordinator, SK Telecom: 질문 감사드립니다. 우선 사업 관련한 두 가지 질문에 대해서는 MNO 지원 실장이 답변드리도록 하겠습니다.

Tae-hee Kim, IR, SK Telecom: Thank you for your questions. Regarding your two questions on MNO business, I’d like to turn over to our Head of MNO Support.

Byung-chan Bae, Head of MNO Support, SK Telecom: MNO 지원실장 배병찬입니다. KT 위약금 면제에 따른 영향과 올해의 윈백 목표에 대해서 말씀드리도록 하겠습니다. 경쟁사의 위약금 면제 조치 영향으로 연초 번호이동 시장 규모가 일시적으로 확대되었습니다. 하지만 그 이후 전반적인 시장 안정화가 이루어지고 있는 상황입니다. 해당 기간 당사로 유입된 고객의 상당수는 작년 사이버 침해 사고 이후 이탈했던 저희 고객들의 자발적 재유입, 저희가 윈백으로 부르는 재유입 고객으로 판단되고 있습니다. 이는 가입 변수 복구, 멤버십 등 실질적 혜택을 담은 고객 감사 패키지와 다양한 보안 강화 조치가 고객의 신뢰를 회복하는 데 주요한 역할을 한 것으로 판단하고 있습니다. 앞으로도 당사는 단기 목표 달성을 위한-

Tae-hee Kim, IR, SK Telecom: I am Byung-chan Bae, Head of MNO Support. Let me address your questions on the impact of KT’s cancellation fee waivers, as well as our win-back target for 2026. With the cancellation fee waivers by our competitor, the carrier switching market expanded temporarily in the beginning of the year. However, since then, we are seeing an overall market stabilization trend. A large share of customers who joined SK Telecom during that period were voluntary win-back customers who returned after having switched to another carrier last year following the cybersecurity incident. We believe that the Customer Appreciation Package that includes substantial benefits such as subscription tenure restoration, and membership benefits, as well as diverse measures to strengthen our security, has been effective in restoring the trust of our customers.

Byung-chan Bae, Head of MNO Support, SK Telecom: 앞으로도 당사는 단기 목표 달성을 위한 소모적 마케팅 경쟁에 의존하기보다는 고객 가치 혁신을 중심으로 한 본원적 경쟁력 강화를 전략의 핵심으로 삼아, 점진적으로 고객 저변을 확대해 나갈 계획입니다.

Tae-hee Kim, IR, SK Telecom: Going forward, we will not only rely on destructive marketing competition for short-term gains, but rather focus on strengthening core business competitiveness through customer value innovation to continue to expand our customer base.

Byung-chan Bae, Head of MNO Support, SK Telecom: 이를 위해 상품과 시장 운영 전반에 대한 구조적 재편을 현재 추진 중에 있으며, 준비가 완료되는 대로 구체적 방향성과 성과를 시장과 고객에게 순차적으로 공유할 예정입니다.

Tae-hee Kim, IR, SK Telecom: To this end, we are currently working on restructuring our product offerings and market operation, and as soon as they are ready and become available, we will share more concrete directions and results with the market and our subscribers.

Byung-chan Bae, Head of MNO Support, SK Telecom: 다음은 2026년 무선 매출 전망 및 회복 전략에 대해 말씀드리도록 하겠습니다. 2026년은 전년 대비 감소한 핸드셋 가입자로 다소 챌린징한 조건에서 시작하게 되었습니다. 연중 지속적 가입자 회복을 통해 매출 임팩을 최소화하는 한편, 신규 고객 발굴 등 성장 둔화를 극복하기 위한 다양한 방안을 추진할 예정입니다.

Tae-hee Kim, IR, SK Telecom: Now, let me comment on our MNO revenue outlook for 2026, and strategies to recover our subscriber base. We have started the new year under rather challenging circumstances due to the year-over-year decline in handset subscribers. Throughout 2026, we will strive to minimize revenue impact by winning back subscribers and implement various measures to create growth by developing new customer segments.

Byung-chan Bae, Head of MNO Support, SK Telecom: 성장 둔화 극복을 위해 다양한 방안을 추진할 예정이지만, 고객 감소 영향이 연간으로 확장되고 사고 전 수준... 확장되면서 사고 전 수준의 매출 회복을 기대하기에는 녹록지 않은 환경입니다.

Tae-hee Kim, IR, SK Telecom: However, despite these measures that we have in plan, with the prolonged impact of customer attrition, it is challenging to bring revenue back to the pre-cybersecurity incident level.

Byung-chan Bae, Head of MNO Support, SK Telecom: 금년 MNO는 무엇보다 수익성 강화에 집중할 계획입니다.

Tae-hee Kim, IR, SK Telecom: For MNO business this year, we plan to focus on boosting profitability.

Byung-chan Bae, Head of MNO Support, SK Telecom: 상품과 채널은 고객의 선호를 고려해 재정비해 나갈 예정이며, LTV 중심의 operation 최적화를 통해 비용 효율화를 추진해 나갈 예정입니다.

Tae-hee Kim, IR, SK Telecom: We will reorganize our products and channels to cater to customer preferences and improve cost efficiency through optimized operation based on customer lifetime value.

Byung-chan Bae, Head of MNO Support, SK Telecom: 또한 AI를 기반으로 상품, 마케팅, 네트워크, 운영 전반을 고도화함으로써 고객 가치 제공 및 투입 대비 성과를 높이는 생산성 중심의 사업 구조를 만들어 나가고자 합니다.

Tae-hee Kim, IR, SK Telecom: In addition, we will use AI to further improve our operation, including products, marketing, and network operation, and create a productivity-based business structure to enhance customer value and maximize performance relative to input.

Byung-chan Bae, Head of MNO Support, SK Telecom: 이러한 노력을 통해 2026년 무선 사업 수익성을 회복하고, 중장기 성장을 위한 구조적 기반을 마련해 나가도록 하겠습니다.

Tae-hee Kim, IR, SK Telecom: Through these efforts in 2026, we aim to restore the profitability of the MNO business and build a structural foundation for medium- and long-term growth.

Conference Coordinator, SK Telecom: 네, 혹시 지금 질문 대기하고 계신 분이 있나요?

Conference Moderator, SK Telecom: 현재 대기 중인 분은 없습니다.

Tae-hee Kim, IR, SK Telecom: There are no questions in the queue right now.

Conference Coordinator, SK Telecom: 네, 그럼 이것으로 2020년 SK텔레콤 연간 실적 발표 콘퍼런스 콜을 마치도록 하겠습니다. 오늘 혹시 답변이 부족했거나 추가적으로 궁금한 점이 있으시면 언제든지 IR로 문의해 주시기 바랍니다. 감사합니다.

Tae-hee Kim, IR, SK Telecom: With no further questions, we would like to conclude the earnings conference call for 2025 for SK Telecom. If there are additional inquiries or questions, please feel free to contact IR. Thank you.