kimlia [printed: August 2, 2006 10:13 PM] [saved: August 3, 2006 12:22 AM] S:\general\group\SK\SKTELECO\2006\NDR_Aug\SKT_NDR Presentation_AUG V4.ppt Investor Presentation August 2006 This material has been prepared by SK Telecom for the information of investors of the company. This is not intended as an offer or solicitation for the purchase or sale of any financial instrument or securities. While reasonable care has been taken to ensure that the information contained herein is not untrue or misleading at the time of preparation, the company makes no representation as to its accuracy or completeness. Any projections or estimates may be different from actual results 0
kimlia [printed: August 2, 2006 10:13 PM] [saved: August 3, 2006 12:22 AM] S:\general\group\SK\SKTELECO\2006\NDR_Aug\SKT_NDR Presentation_AUG V4.ppt Disclaimer This presentation has been prepared by SK Telecom Co., Ltd. ( the Company ). This presentation is being presented solely for your information and is subject to change without notice. No representation or warranty, expressed 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 information contained in the presentation. This presentation does not constitute an offer or invitation to purchase or subscribe for any shares of the Company, and no part of this presentation shall form the basis of or be relied upon in connection with any contract or commitment. The contents of this presentation may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, in whole or in part, for any purpose. 1
Table of Contents kimlia [printed: August 2, 2006 10:13 PM] [saved: August 3, 2006 12:22 AM] S:\general\group\SK\SKTELECO\2006\NDR_Aug\SKT_NDR Presentation_AUG V4.ppt Industry Overview 2006 2Q Operating Results and Outlook Growth Strategy Commitment to Shareholders 2
Industry Overview 3
Korean Mobile Market kimlia [printed: August 2, 2006 10:13 PM] [saved: August 3, 2006 12:22 AM] S:\general\group\SK\SKTELECO\2006\NDR_Aug\SKT_NDR Presentation_AUG V4.ppt Further growth potential exists in the Korean wireless market Korean Mobile Market Trend Mobile Penetration 61.2% 29,047 67.9% 32,342 70.1% 33,592 75.9% 36,586 79.4% 81.4% 38,342 39,382 72% 73% 81% 93% 98% 110% 113% 115% 30% 2001 2002 2003 2004 2005 Jun-06 Subscribers(000 s) Penetration China US Japan Source: MIC, NSO Source: The Mobile World, as of 31 Mar 2006 Korea Taiwan Singapore UK Sweden Hong Kong 4
kimlia [printed: August 2, 2006 10:13 PM] [saved: August 3, 2006 12:22 AM] S:\general\group\SK\SKTELECO\2006\NDR_Aug\SKT_NDR Presentation_AUG V4.ppt 2006 2Q Competitive Landscape Undisputed leader in the Korean wireless market LGT: 16.7% KTF: 32.7% Market Share 6,765 19,984 12,634 Revenue ( 000, %) (KRW bn) SKT: 2,638 50.7% 1,314 743 SKT KTF LGT 373 Net Income 81 (KRW bn) 1.8% Churn Rate 2.6% 3.1% (%) -195 SKT Source: MIC, Company data KTF LGT SKT KTF LGT 5
2006 2Q Operating Results and Outlook 6
2006 2Q Operating Results kimlia [printed: August 2, 2006 10:13 PM] [saved: August 3, 2006 12:22 AM] S:\general\group\SK\SKTELECO\2006\NDR_Aug\SKT_NDR Presentation_AUG V4.ppt (Unit: KRW bn) 2Q 2006 06 2Q 05 YoY 1Q 06 QoQ 2Q 1H 2006 06 2006E Revenue 2,638 2,527 4% 2,540 4% 5,179 10,500 Marketing Expense to Revenue 22.7% 17.5% 5.2%p 17.3% 5.4%p 20.1% 20.5% (1) EBITDA 997 1,103-10% 1,029-3% 2,026 4,000 (2) Net Income 373 467-20% 337 11% 710 N/A Capital Expenditure 348 278 25% 84 315% 431 1,600 Note: (1) Before revision: 17.5% (2) Before revision: 4,400 7
2006 Market Environment kimlia [printed: August 2, 2006 10:13 PM] [saved: August 3, 2006 12:22 AM] S:\general\group\SK\SKTELECO\2006\NDR_Aug\SKT_NDR Presentation_AUG V4.ppt Continued effort to maintain market leadership while stabilizing the market 2Q Market Status Rational behind Guidance Revision Introduction of handset subsidy Intense competition initiated by competitors aggressive marketing program Marketing Expense Trend Increase in retention cost & decrease in acquisition cost (April) Increase in acquisition cost (May & June) Increased retention & acquisition cost caused by introduction of handset subsidy and heated competition in 2Q Need to secure the subscriber base for mid-to-long term corporate value MNP Introduction 19.2% 17.2% 17.3% Handset Subsidy Introduction 22.7% Committed to increase in corporate value and shareholders oriented management '04 '05 1Q 06 2Q '06 8
Growth Strategy 9
Global Business kimlia [printed: August 2, 2006 10:13 PM] [saved: August 3, 2006 12:22 AM] S:\general\group\SK\SKTELECO\2006\NDR_Aug\SKT_NDR Presentation_AUG V4.ppt Stepping stone to emerge as a global leader in technology & service innovation Vietnam U.S China Penetration Population (1) 11.8% 84 million 72.0% 298 million 30.0% 1,312 million Total Investment US$360 million US$220 million US$1 billion Development 740,000 subscribers & 4.3% M/S as of July 06 Nationwide coverage by 2006 2010 projected mobile penetration: 44.5% Joint venture with EarthLink Differentiated service aimed at younger generation, tech savvy customers and Korean- American US$1.0bn in China Unicom s CB SKT to be exclusive and sole partner in relation to China Unicom s CDMA business - Cooperation in 6 areas Investment Principle Transplant Resource & Capability of SKT Local partnership to minimize risk and maximize success Culturally similar and geographically close to Korea Source: (1) The Mobile World, as of 31 March 2006 10
Domestic Business kimlia [printed: August 2, 2006 10:13 PM] [saved: August 3, 2006 12:22 AM] S:\general\group\SK\SKTELECO\2006\NDR_Aug\SKT_NDR Presentation_AUG V4.ppt Core and new domestic business to continue to enhance overall growth Convergence & Ubiquitous Service HSDPA Music portal site where MP3 files are downloaded through internet and mobile handsets 5.7 mn subscribers as of June 06 Korea s # 1 paid music site in terms of revenue & subscriber base Mobile version of immensely popular web-based community portal 1.5 mn users as of June 06 (18mn Cyworld users as of June 06) 3D game portal site launched In April 2005 Expanding contents via cooperation with major game developers Expect increased use with introduction of HSDPA Video Telephony Video telephony & related value-added service - Expand to phone-to-phone as well as web-to-phone & fixed-to-phone - Value added svc. such as image coloring / lettering, image message call Global Roaming Roaming Service Marketing - 80% of world s wireless operators use GSM or WCDMA Premium Multimedia Svc. QVGA Contents - High-resolution video contents JUNE Channel - Night-time auto-download service 11
Commitment to Shareholders 12
Shareholder Return kimlia [printed: August 2, 2006 10:13 PM] [saved: August 3, 2006 12:22 AM] S:\general\group\SK\SKTELECO\2006\NDR_Aug\SKT_NDR Presentation_AUG V4.ppt Commitment to enhancing shareholder value Trend of Dividend Payout Ratio / Share Buyback 2 1 3 21% 25% 35% 40% 5% 10% 2001 2002 2003 2004 2005 2006 2007E 1 Special dividends of approx. KRW 300 bn in 2004 2 Total treasury buyback of KRW 200 bn scheduled for 2H - Stage 1 : Stock buyback for cancellation of 491,000 shares(approx. KRW 93 bn) ) from 1 Aug to 14 Aug - Stage 2 : Second buyback process will be undertaken after the stage s 1 buyback is completed 3 2007: Similar level of shareholder return as 2006 13