SK Telecom's Operating Profit Slips 29% on Rising Costs

SK Telecom, South Korea's top mobile carrier, posted a sharp rise in third-quarter net profit on Thursday as it booked a gain related to its acquisition of a stake in China Unicom.

SK, which controls 50.5 percent of South Korea's mobile phone market, posted 776.8 billion won ($846.5 million) in net profit in the quarter to September, compared with a 456.8 billion won profit a year earlier and a forecast for 672 billion won by six analysts polled by Reuters.

The net result was boosted by a 373 billion won one-off gain after SK bought a 6.6 percent stake in China Unicom in August after converting $1 billion worth of bonds.

But operating profit took a hit as the company spent more money attracting customers for next-generation services as it battles rival KTF.

The company's operating profit was 536.6 billion won, widely missing a forecast for 622 billion won by Reuters Estimates and down 29 percent from the year-ago figure.

SK is battling with South Korea's second-biggest carrier KTF over users for more profitable third-generation mobile services, such as video calls and wireless Internet.

SK had 21.6 million subscribers at the end of September, up 7.9 percent from a year earlier -- a strong performance in a country where almost 90 percent of population has a mobile phone.

Shares in SK Telecom, which has a market value of about $18.5 billion, fell 1.4 percent in the third quarter, compared with an 11.6 percent gain in the wider market.