SK Telecom Q1 profit falls 22.7%

Seoul (AFP) - South Korea's top wireless operator SK Telecom said Tuesday its net profit fell 22.7 percent in the first quarter on heavy marketing costs and customer payouts for service failures.

Net profit for January to March amounted to 267.3 billion won ($259.1 million) compared to 345.9 billion won a year ago, the Seoul-based firm said.

Operating profit also tumbled 37.6 percent to 252.4 billion won and sales inched up 3.4 percent to 4.2 trillion won, it said.

The firm spent 1.1 trillion won for marketing, up 21.4 percent from a year ago, as wireless operators stepped up campaigns to woo new subscribers.

Seoul's regulators last month suspended the nation's three wireless operators from signing up new customers for 45 days each as a penalty for offering illegal discounts.

SK Telecom also offered an unspecified sum to millions of customers for a lengthy service failure on March 20.

Competition is fierce in the increasingly saturated wireless market in South Korea -- one of the world's most wired nations.

The country has some 37 million smartphone users in a total population of 50 million.

Major wireless operators have tried to boost profits by drawing more customers to faster, higher-priced 4G services based on so-called long-term evolution (LTE) network.

SK Telecom said 14.7 million subscribers, or 53.1 percent of its total clients, use LTE services -- a share that it expected to rise to two-thirds by the end of this year.