SK Telecom Co Ltd Files 20-F Annual Report

TL;DR

<b>SK Telecom Co Ltd has submitted its 2023 annual report on Form 20-F, detailing financial performance and corporate information.</b>

AI Summary

SK TELECOM CO LTD (SKM) filed a Foreign Annual Report (20-F) with the SEC on April 29, 2024. SK Telecom Co Ltd filed its annual report on Form 20-F for the fiscal year ending December 31, 2023. The filing covers financial data for the years 2023, 2022, and 2021. The company's principal executive offices are located at 11, Euljiro2-ga, Jung-gu, Seoul, Korea. SK Telecom's former name was Korea Mobile Telecommunications Corp, with a name change on May 30, 1996. The company operates in the Radio Telephone Communications industry (SIC code 4812).

Why It Matters

For investors and stakeholders tracking SK TELECOM CO LTD, this filing contains several important signals. This filing provides a comprehensive overview of SK Telecom's financial health and operational status for the fiscal year 2023, crucial for investors assessing the company's performance and future prospects. As a major telecommunications provider, the detailed financial disclosures in the 20-F are essential for understanding market position, regulatory compliance, and strategic direction within the South Korean and global markets.

Risk Assessment

Risk Level: medium — SK TELECOM CO LTD shows moderate risk based on this filing. The company operates in the highly competitive telecommunications sector, which is subject to rapid technological changes and significant regulatory oversight, as indicated by its industry classification and the nature of a 20-F filing.

Analyst Insight

Investors should review the detailed financial statements and risk factors within the 20-F to assess SK Telecom's competitive positioning and regulatory landscape.

Key Numbers

• 2023-12-31 — Fiscal Year End (Conformed Period of Report)
• 2024-04-29 — Filing Date (Filed as of Date)
• 2023 — Reporting Year (Financial Data Year)
• 2022 — Previous Year (Financial Data Year)
• 2021 — Prior Year (Financial Data Year)

Key Players & Entities

• SK TELECOM CO LTD (company) — Filer
• 0001015650 (company) — Central Index Key
• 4812 (company) — Standard Industrial Classification
• 11, EULJIRO2-GA (company) — Business Address Street 1
• JUNG-GU (company) — Business Address Street 2
• SEOUL (company) — Business Address City
• KOREA (company) — Business Address State
• 19960530 (company) — Date of Name Change

FAQ

Industry Context

SK Telecom operates within the telecommunications industry, a sector characterized by rapid technological advancements, high capital expenditures, and evolving regulatory frameworks.

Regulatory Implications

As a South Korean telecommunications company, SK Telecom is subject to the regulatory oversight of the Korean Communications Commission and potentially other international bodies depending on its global operations.

What Investors Should Do

1. Review the detailed financial statements for FY 2023, 2022, and 2021 to understand revenue trends, profitability, and asset base.
2. Analyze the risk factors section to identify potential challenges related to competition, regulation, and technological shifts.
3. Examine any disclosures regarding executive compensation and corporate governance practices.

Key Dates

• 2023-12-31: Fiscal Year End — End of the reporting period for the financial data.
• 2024-04-29: Filing Date — Date the 20-F form was officially submitted to the SEC.

Year-Over-Year Comparison

This filing represents the annual update for the fiscal year 2023, providing the latest financial and operational data compared to previous filings.

Filing Documents

• d610408d20f.htm (20-F) — 8153KB
• d610408dex11.htm (EX-1.1) — 153KB
• d610408dex81.htm (EX-8.1) — 7KB
• d610408dex121.htm (EX-12.1) — 10KB
• d610408dex122.htm (EX-12.2) — 10KB
• d610408dex131.htm (EX-13.1) — 4KB
• d610408dex132.htm (EX-13.2) — 4KB
• d610408dex971.htm (EX-97.1) — 26KB
• g610408g15i48.jpg (GRAPHIC) — 42KB
• g610408g80e07.jpg (GRAPHIC) — 43KB
• 0001193125-24-119709.txt (&nbsp;) — 38550KB
• skm-20231231.xsd (EX-101.SCH) — 300KB
• skm-20231231_cal.xml (EX-101.CAL) — 152KB
• skm-20231231_def.xml (EX-101.DEF) — 1185KB
• skm-20231231_lab.xml (EX-101.LAB) — 1635KB
• skm-20231231_pre.xml (EX-101.PRE) — 1572KB
• d610408d20f_htm.xml (XML) — 9935KB

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS 2 Part I 4

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Item 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS 4

A. Directors and Senior Management

Item 1.A. Directors and Senior Management 4

B. Advisers

Item 1.B. Advisers 4

C. Auditors

Item 1.C. Auditors 4

OFFER STATISTICS AND EXPECTED TIMETABLE

Item 2. OFFER STATISTICS AND EXPECTED TIMETABLE 4

KEY INFORMATION

Item 3. KEY INFORMATION 4

A. [Reserved]

Item 3.A. [Reserved] 4

B. Capitalization and Indebtedness

Item 3.B. Capitalization and Indebtedness 4

C. Reasons for the Offer and Use of Proceeds

Item 3.C. Reasons for the Offer and Use of Proceeds 4

D. Risk Factors

Item 3.D. Risk Factors 4

INFORMATION ON THE COMPANY

Item 4. INFORMATION ON THE COMPANY 22

A. History and Development of the Company

Item 4.A. History and Development of the Company 22

B. Business Overview

Item 4.B. Business Overview 25

C. Organizational Structure

Item 4.C. Organizational Structure 49

D. Property, Plants and Equipment

Item 4.D. Property, Plants and Equipment 49

UNRESOLVED STAFF COMMENTS

Item 4A. UNRESOLVED STAFF COMMENTS 50

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Item 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS 50

A. Operating Results

Item 5.A. Operating Results 50

B. Liquidity and Capital Resources

Item 5.B. Liquidity and Capital Resources 63

C. Research and Development, Patents and Licenses, etc

Item 5.C. Research and Development, Patents and Licenses, etc 69

D. Trend Information

Item 5.D. Trend Information 70

E. Critical Accounting Estimates

Item 5.E. Critical Accounting Estimates 70

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

Item 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES 70

A. Directors and Senior Management

Item 6.A. Directors and Senior Management 70

B. Compensation

Item 6.B. Compensation 76

C. Board Practices

Item 6.C. Board Practices 79

D. Employees

Item 6.D. Employees 81

E. Share Ownership

Item 6.E. Share Ownership 82

F. Disclosure of a Registrant's Action to Recover Erroneously Awarded Compensation

Item 6.F. Disclosure of a Registrant's Action to Recover Erroneously Awarded Compensation 84

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

Item 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 84

A. Major Shareholders

Item 7.A. Major Shareholders 84

B. Related Party Transactions

Item 7.B. Related Party Transactions 85

C. Interests of Experts and Counsel

Item 7.C. Interests of Experts and Counsel 86

FINANCIAL INFORMATION

Item 8. FINANCIAL INFORMATION 86

A. Consolidated Statements and Other Financial Information

Item 8.A. Consolidated Statements and Other Financial Information 86

B. Significant Changes

Item 8.B. Significant Changes 88

THE OFFER AND LISTING

Item 9. THE OFFER AND LISTING 88

A. Offering and Listing Details

Item 9.A. Offering and Listing Details 88

B. Plan of Distribution

Item 9.B. Plan of Distribution 88

C. Markets

Item 9.C. Markets 89

D. Selling Shareholders

Item 9.D. Selling Shareholders 89

E. Dilution

Item 9.E. Dilution 89

F. Expenses of the Issue

Item 9.F. Expenses of the Issue 89

ADDITIONAL INFORMATION

Item 10. ADDITIONAL INFORMATION 89

A. Share Capital

Item 10.A. Share Capital 89

B. Memorandum and Articles of Association

Item 10.B. Memorandum and Articles of Association 89 (i) Table of Contents

C. Material Contracts

Item 10.C. Material Contracts 95

D. Exchange Controls

Item 10.D. Exchange Controls 96

E. Taxation

Item 10.E. Taxation 101

F. Dividends and Paying Agents

Item 10.F. Dividends and Paying Agents 107

G. Statements by Experts

Item 10.G. Statements by Experts 107

H. Documents on Display

Item 10.H. Documents on Display 107

I. Subsidiary Information

Item 10.I. Subsidiary Information 108

J. Annual Report to Security Holders

Item 10.J. Annual Report to Security Holders 108

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Item 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 108

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Item 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES 110

A. Debt Securities

Item 12.A. Debt Securities 110

B. Warrants and Rights

Item 12.B. Warrants and Rights 110

C. Other Securities

Item 12.C. Other Securities 110

D. American Depositary Shares

Item 12.D. American Depositary Shares 110 Part II 111

DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

Item 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES 111

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

Item 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS 111

CONTROLS AND PROCEDURES

Item 15. CONTROLS AND PROCEDURES 111

RESERVED

Item 16. RESERVED 112

AUDIT COMMITTEE FINANCIAL EXPERT

Item 16A. AUDIT COMMITTEE FINANCIAL EXPERT 112

CODE OF ETHICS

Item 16B. CODE OF ETHICS 112

PRINCIPAL ACCOUNTANT FEES AND SERVICES

Item 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES 112

EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Item 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES 113

PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

Item 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS 113

CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT

Item 16F. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT 113

CORPORATE GOVERNANCE

Item 16G. CORPORATE GOVERNANCE 114

MINE SAFETY DISCLOSURE

Item 16H. MINE SAFETY DISCLOSURE 115

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Item 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 115

INSIDER TRADING POLICIES

Item 16J. INSIDER TRADING POLICIES 115

CYBERSECURITY

Item 16K. CYBERSECURITY 116 Part III 118

FINANCIAL STATEMENTS

Item 17. FINANCIAL STATEMENTS 118

FINANCIAL STATEMENTS

Item 18. FINANCIAL STATEMENTS 118

EXHIBITS

Item 19. EXHIBITS 119 (ii) Table of Contents CERTAIN DEFINED TERMS AND CONVENTIONS USED IN THIS ANNUAL REPORT All references to "Korea" contained in this annual report shall mean The Republic of Korea. All references to the "Government" shall mean the government of The Republic of Korea. All references to "we," "us," or "our" shall mean SK Telecom Co., Ltd. and, unless the context otherwise requires, its consolidated subsidiaries. References to "SK Telecom" shall mean SK Telecom Co., Ltd., but shall not include its consolidated subsidiaries. All references to "U.S." shall mean the United States of America. All references to "MHz" contained in this annual report shall mean megahertz, a unit of frequency denoting one million cycles per second. All references to "GHz" shall mean gigahertz, a unit of frequency denoting one billion cycles per second. All references to "Kbps" shall mean one thousand bits per second, all references to "Mbps" shall mean one million bits per second and all references to "Gbps" shall mean one billion bits per second. All references to "GB" shall mean gigabytes, which is one billion bytes. Any discrepancies in any table between totals and the sums of the amounts listed are due to rounding. All references to "Won," or " W " in this annual report are to the currency of Korea and all references to "Dollars," "U.S. dollar" or "US

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS This report contains "forward-looking statements," as defined in Section 27A of the Securities Act, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act"), 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," "considering," "depends," "estimate," "expect," "intend," "plan," "planning," "planned," "project" and similar expressions, or that certain events, actions or results "may," "might," "should" or "could" occur, be taken or be achieved.

Forward-looking statements in this annual report include, but are not limited to, statements about the following

Forward-looking statements in this annual report include, but are not limited to, statements about the following: our ability to anticipate and respond to various competitive factors affecting the telecommunications industry, including new services that may be introduced, changes in consumer preferences, economic conditions and discount pricing strategies by competitors; our continued implementation of fifth generation wireless technology, which we refer to as "5G" technology; our plans for capital expenditures in 2024 for a range of projects, including investments to further expand and improve our 5G network, investments to maintain our fourth generation long-term evolution ("LTE") network and related services, investments to improve and expand our Wi-Fi network, investments to develop our Internet of Things ("IoT") solutions and platform services business portfolio, including artificial intelligence ("AI") solutions, investments in data infrastructure, investments in further research and development of 5G technology, investments in businesses that can potentially leverage our 5G network, and funding for mid- to long-term research and development projects, as well as other initiatives related to the development of new growth businesses and our ongoing businesses in the ordinary course, in each case with an emphasis on incorporating AI technology into our various existing and new business areas; our efforts to make significant investments to build, develop and broaden our businesses, including our next-generation growth businesses in cloud computing, data centers, smart factories, subscription services, metaverse, media, platform, AI solutions, enterprise AI services and other innovative products and services, as well as to actively integrate AI technology generally into, and create synergies among, our various businesses; our ability to comply with governmental rules and regulations, including the regulations of the Government related to telecommunication

Risk Factors

Risk Factors Risks Relating to Our Business Competition may reduce our market share and harm our business, financial condition and results of operations. We face substantial competition across all of our businesses, including our wireless telecommunications business. We expect competition to remain intense as new technologies, products and services are developed and introduced by us and our competitors. We expect that such trends will continue to put downward pressure on the rates we can charge our subscribers. Historically, there has been considerable consolidation in the telecommunications industry, resulting in the current competitive landscape comprising three mobile and fixed network operators in the Korean market, us, KT Corporation ("KT") and LG Uplus Corp. ("LG U+"). Each of our competitors has substantial financial, technical, marketing and other resources to respond to our business offerings. As of December 31, 2023, the collective market share of KT and LG U+ amounted to approximately 59.3% in terms of number of wireless subscribers (including an aggregate of 16.3% attributable to mobile virtual network operators ("MVNOs") that lease KT's and LG U+'s respective networks) compared to 56.8% (including an aggregate of 13.8% attributable to MVNOs) as of December 31, 2022. Such increase in the collective market share of KT and LG U+ was mainly attributable to an increase in the market share of MVNOs that lease LG U+'s network. 4 Table of Contents Our competitors for subscriber activations include MVNOs, including MVNOs that lease our networks. MVNOs generally provide rate plans that are relatively cheaper than similar rate plans of the wireless network providers from which they lease their networks, including us. In recent years, a number of new entrants have entered the MVNO business, including affiliates of leading financial institutions in Korea. Some of these new entrants have engaged in aggressive marketing campaigns and promotional discount

View Full Filing

View this 20-F filing on SEC EDGAR