1934 Act Registration No. 1-14418
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE MONTH OF FEBRUARY 2003
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SK TELECOM CO., LTD.
(Translation of registrant's name into English)
99, Seorin-dong
Jongro-gu
Seoul, Korea
(Address of principal executive offices)
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(Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.)
Form 20-F [X] Form 40-F [ ]
(Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.)
Yes [ ] No [X]
(If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b):82- .)
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In this report on Form 6-K, unless the context indicates or otherwise
requires, references to "we", "us", "our" or the "Company" shall mean SK Telecom
Co., Ltd. and its consolidated subsidiaries.
This report contains "forward-looking statements", as defined in Section
27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S.
Securities Exchange Act of 1934, as amended, that are based on our current
expectations, assumptions, estimates and projections about our company and our
industry. The forward-looking statements are subject to various risks and
uncertainties. Generally, these forward-looking statements can be identified by
the use of forward-looking terminology such as "anticipate", "believe",
"estimate", "expect", "intend", "project", "should", and similar expressions.
Those statements include, among other things, the discussions of our business
outlook and expected performance as well as other statements that are not
historical facts. We caution you that reliance on any forward-looking statement
involves risks and uncertainties, and that although we believe that the
assumptions on which our forward-looking statements are based are reasonable,
any of those assumptions could prove to be inaccurate, and, as a result, the
forward-looking statements based on those assumptions could be incorrect. In
light of these and other uncertainties, you should not conclude that we will
necessarily achieve any plans and objectives or projected financial results
referred to in any of the forward-looking statements. We do not undertake to
release the results of any revisions of these forward-looking statements to
reflect future events or circumstances.
(SK TELECOM LETTERHEAD)
Report to the Korea Stock Exchange
RE : GUIDANCE FOR 2003
The following statements are current estimates and projections for 2003
reflecting management's judgment and involve a number of risks and uncertainties
that could cause actual results to differ materially from those suggested by
these forward-looking statements. These forward-looking information were based
on various factors and were derived utilizing numerous assumptions. Some of the
assumptions and other important factors that could cause actual results to
differ materially from those in the forward-looking information are identified
below.
1. REVENUE TARGET FOR 2003: APPROXIMATELY KRW 9.5 TRILLION
The Company earns revenue principally from connection fees and monthly and
usage fees paid by subscribers to our wireless services, interconnection fees
paid to us by other telecommunications operators and sales of wireless handsets
by our subsidiary, SK Teletech.
The amount of our revenue depends principally upon the number of the
Company's wireless subscribers, the rates the Company charges for its services,
subscriber usage of its services and the terms of its interconnection with other
telecommunications operator.
With respect to its revenue target of approximately KRW 9.5 trillion for
2003, the Company has made the following principal assumptions, among others:
o the Company's target with respect to its number of wireless
subscribers in 2003 (discussed below) is substantially achieved;
o the average ARPU(excluding interconnection) for 2003 is going to
slightly increase; and
o the Company will not be adversely affected by changes in the MIC's
interconnection policies during 2003.
2. WIRELESS INTERNET REVENUE TARGET FOR 2003: APPROXIMATELY 15% OF CELLULAR
REVENUE (EXCLUDING INTERCONNECTION REVENUE)
The Company's wireless Internet revenues are generated principally from
initial connection fees, monthly access fees, usage charges for outgoing calls
and wireless data, interconnection fees and access fees for value-added
services.
With respect to its wireless Internet revenue target of approximately 15%
of its cellular revenue (excluding interconnection revenue) for 2003, the
Company has made the following principal assumptions, among others:
o the number of 2.5G handset holders will increase at a rate of
approximately 50% during 2003;
o the number of EV-DO subscribers will increase to approximately
3.7 million by the end of 2003; and
o the number of color handset holders will increase to approximately
10 million by the end of 2003.
3. SUBSCRIBER TARGET FOR 2003: APPROXIMATELY 18.7 MILLION
With respect to its subscriber target of approximately 18.7 million for
2003, the Company has made the following principal assumptions, among others:
o Korean wireless market penetration rate at the end of 2003 to be in
the range of 72% to 73%; and
o the Company's share of the Korean wireless market will increase to
approximately 53% by the end of 2003.
The Company believes that, in addition to the factors described below under
"Additional Factors," its subscriber growth will depend on many factors
including its expansion and technical enhancement of its digital network, the
effectiveness of the Company's marketing strategies and customer service systems
and the Company's ability to successfully introduce new value-added services.
4. CAPITAL EXPENDITURE FOR 2003: APPROXIMATELY KRW 2.49 TRILLION
The Company estimates that it will spend approximately KRW 2.49 trillion
for capital expenditures in 2003 for a range of projects, including the
expansion and improvement of the Company's wireless networks and investments in
its Internet-related businesses.
The Company's currently planned capital expenditures for 2003 consist of
the following principal items:
o CDMA Network (2G Network) - KRW 150 billion;
o CDMA 1xRTT Network (2.5G Network) - KRW 780 billion;
o W-CDMA Network (3G Network) - KRW 520 billion;
o Wireless Internet - KRW 210 billion;
o Others (including land and buildings) - KRW 620 billion; and
o Marketing - KRW 210 billion.
The Company's currently planned capital expenditures for 2003 have
increased by approximately KRW 1 trillion over the Company's previous estimates.
Approximately half of the increase in the Company's estimated capital
expenditures is a result of the assumption that the Company's subsidiary, SK IMT
Co., Ltd., will incur
significant capital expenditures on the construction of its W-CDMA network in
2003. However, the Company has not yet made a final decision when SK IMT will
implement its W-CDMA project. The actual timing of construction of SK IMT's
W-CDMA network will be affected by several factors, including, the progress of
dual band/dual mode handset development, adoption of EV/DO service, regulatory
decisions and the competitive landscape in the Korean wireless market.
In addition to the acceleration of the capital expenditures for the W-CDMA
project described above, the balance of the increase in the Company's estimated
capital expenditures is principally as a result of the following factors, among
others:
o an increase in planned investment in the Company's CDMA network (2G
network) to expand the Company's 2G network to newly developed
residential areas;
o an increase in projected investments in marketing to strengthen the
Company's marketing IT infrastructure in order to satisfy customer
needs (such as implementation of a more flexible billing system) and
to strengthen the Company's distribution network (such as
establishment of June shops); and
o an increase in anticipated investments in wireless Internet to develop
a platform for wireless business transactions and PDA content, etc.
In addition to the uncertainties about the timing of the construction of SK
IMT's W-CDMA network as described above, the Company's overall levels of
capital spending and its allocation of capital expenditures among projects are
subject to many other uncertainties, including uncertainties about the timing,
cost and demand for its services. The Company may also increase, reduce or
suspend its planned capital expenditures in response to market conditions or for
other reasons.
5. EBITDA MARGIN TARGET: APPROXIMATELY 47%
EBITDA refers to income before interest income, interest expense, taxes,
depreciation and amortization. EBITDA is commonly used in the telecommunications
industry to analyze companies on the basis of operating performance, leverage
and liquidity. Since the telecommunications business is a very capital intensive
business, capital expenditures and level of debt and interest expenses may have
a significant impact on net income for companies with similar operating results.
Therefore, the Company believes that for a telecommunications company such as
itself, EBITDA provides a more accurate reflection of the Company's operating
results.
With respect to its EBITDA margin target of approximately 47% for 2003, the
Company has made following assumptions, among other things:
o the Company meets its revenue target for 2003 (described above);
o the Company's estimated depreciation cost for 2003 is expected to
increase at a rate of approximately 15%; and
o the Company's estimated marketing expenses for 2003 is expected to
increase at a rate of approximately 5%.
Additional Factors
In addition to the foregoing assumptions, important factors that could
cause actual results to differ materially from estimates or projections
contained in the forward-looking statements of this report include:
o the effects of competition in the Korean wireless market, including
the possible introduction of new competitive services or technologies
by our competitors;
o the costs and business risks associated with providing new services
and entering new markets necessary to provide wireless services;
o any adverse change in the ratings afforded our debt securities by
ratings agencies;
o the ability of the Company to continue to attract and retain wireless
subscribers;
o the ability of the Company to improve its profitability and reduce its
cash requirements;
o uncertainties related to the Company's strategic investments;
o the impact of any unusual items resulting from ongoing evaluations of
the Company's business strategies;
o the possible impact of changes in political, economic or other factors
such as monetary policy, legal and regulatory changes, or other
external factors over which the Company has no control; and
o other risks disclosed from time to time in the Company's filings with
the Securities and Exchange Commission ("SEC").
You should not place undue reliance on forward-looking statements, which
are based on current expectations and speak only as of the date of this report.
The Company is not obligated to publicly release any revisions to
forward-looking statements to reflect events after the date of this report. The
Company provides a detailed discussion of risk factors in periodic SEC filings,
including its Form 20-F, and you are encouraged to review these filings.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SK TELECOM CO., LTD.
By: /s/ Sung Hae Cho
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Name: Sung Hae Cho
Title: Vice President
IR Office
Date: February 12, 2003