SK Telecom Co Ltd (SKM) 2012 Q2 法說會逐字稿

(Interpreted) Good afternoon. Welcome to the conference call for the fiscal year 2012 second quarter earnings results by SK Telecom. This conference will start with a presentation followed by Q & A session. And now, we'll begin the conference of the fiscal year 2012 second quarter earnings results by SK Telecom.

(Interpreted) Good afternoon and my name is Hyung-Joo Park, the IRO at SK Telecom. Today' conference call will consist of the presentation on the earnings results for Q2 2012 and the future management plans and strategic direction by our CFO, Seung-Yun Ahn, followed by a Q & A session. To help deepen your understanding, we have with us executives from the relevant business units. Today's call will provide consecutive interpretation. Let me also remind you that all the forward-looking are subject to change, depending on the macroeconomic and market situations. Let me now present our CFO.

(Interpreted) Good afternoon. My name is Seung-Yun Ahn, the CFO of SK Telecom. Thank you for taking part in today's earnings call for the second quarter 2012. Let me begin with the consolidated results for Q2. Revenue recorded KRW4015 billion up 0.8% quarter-on-quarter but down 0.6% year-on-year. Operating income came in at KRW385 billion. The [basic C] reduction implemented last year and the temporary hike in marketing expense for the LTE share gain, led to the 17.3% drop quarter-on-quarter and 42.8% decrease year-on-year. EBITDA marked KRW1 trillion, coming down 7.6% quarter-on-quarter and 22.7% year-on-year. That was the overview of the earnings highlight and let me now move on to the future management plan and strategic direction.

On the back of the wider adoption of the LTE service, the telecom market landscape is going through a new transformation. The unsurpassed service speed and differentiated data quality have become catalysts for the LTE market expansion and the customers are experiencing the services fit for the data era and they are shaping a new lifestyle. It is therefore critical for a telecom operator to secure a leadership in the LTE arena, which is solidifying its position as the core infrastructure for the mobile and smart revolution.

Under the conviction that the second quarter was the pivotal period for securing the upper hand in the LTE era, which could translate into the mobile data market dominance for the next decade, we have been pursuing proactive marketing and network investment for subscriber expansion. As the result, the LTE subscriber number reached 4.22 million as of the end of July, with 7 million subscriber number quite likely by the year end. Also, the ARPU has reached the inflection point as of Q2.

Of the total subscriber base, the billing ARPU posted KRW32,700 up 1.8% quarter-on-quarter, while the total ARPU also rose 1.5% quarter-on-quarter with evident signs of positive change in the trend. We expect the ARPU to increase further in Q3, beyond last year's level. Due to the denominator effect of the bigger subscriber base of SKT, the positive LTE effect on our ARPU is expected to manifest itself in a longer period of upwards trend.

On the network side we commercialized the LTE multicarrier service on July 1st for the first time in the world. We have also demonstrated the voiceover LTE, HD Voice, which is the high quality seamless communication service of the future, integrating voice, video and data. The T Freemium service launched in April offers diverse contents, leading to high customer satisfaction and innovation in lifestyle values. In just three months since launching, the T Freemium subscriber number exceeded 1 million, with more than 6 million cumulative downloads. Such high caliber LTE network and diverse platform services are contributing greatly to the acquisition and retention of the high ARPU subscribers.

Although the marketing competition intensified during the first half over the initial market dominance, we expect the market to stabilize as the telcos make efforts to reach the business targets. We believe the increased ARPU specialized network management technologies and services and market stabilization will contribute to future bottom-line growth of our MNO business.

Next year we expect the LTE subscribers to take up more than half of the total subscriber base of SKT. It also means experiencing the world's best data network and having the environment in which diverse mobile platforms can be enjoyed anytime, anywhere. Such an environment will lead to the diversification and proliferation of the LTE services. We expect the wider adoption of LTE smartphones to further accelerate the expansion of our platform business and the growth of SK Planet. This is the reason why SKT refused to remain complacent with just the network business and decided to strengthen the platform services.

SK Telecom is well positioned as a player and to usher in the future mobile and smart revolution, we spun off the platform business last year into a separate entity and we are making visible achievements. Of the ICT value chain, SKT has a strong dominance in the network area, while SK Planet is solidifying its market leading position in the mobile platform arena. This is why we believe SKT's enterprise value will expand going forward from the revaluation of our future platform businesses.

As for SK Planet, the revenue and operating income for Q2 2012 posted KRW249.9 billion and KRW17.1 billion respectively, rising KRW5.3 billion and KRW20 billion quarter-on-quarter respectively. Individual businesses are achieving rapid growth. T-Store subscriber number reached 15.28 million in Q2, jumping 90% year-on-year. The product downloads posted 880 million, soaring 184% year-on-year. In the case of the 11th Street, the gross merchandise value, GMV, for Q2 exceeded KRW1100 billion; increasing 21% year-on-year. The mobile 11th Street cumulative GMV for the first half already outpaced the sales of the previous year as a whole, cementing its leading position in the mobile shopping area. Also the T-Map subscriber number went up 80% year-on-year to 13.68 million while the Hoppin subscribers for Q2 marked 2.21 million, jumping 163% year-on-year.

If you simply add all our platform business subscriber numbers for T-Store, T-Map and others, it comes out to over 100 million. If we are to conduct evaluation comparisons with the referenced players in each respective business area, we believe appropriate valuation would be already possible for SK Telecom. Along with the domestic subscriber growth we are continuously pursuing global expansion. The T-Store's entry into Japan, the 11th Street's entry into Turkey and the global expansion preparations for our mobile social platform Tic Toc are some of the preparations we are making to emerge as a global platform player in the future. Such efforts will lead to visible value creation.

SK Plant is Korea's top tier player in terms of the unsurpassed contents and application sourcing capabilities. Its content app, such as T Freemium, MelOn [streaming] and Hoppin TV [10 3] are the main engines behind this differentiation against the competitors, which will help to create new service markets going forward.

The full-fledged growth of the LTE infrastructure will impact the B2B growth in the future as well. To prepare for the proliferation of the smart devices and LTE, we have been reinforcing our efforts to target the B2B market and we are already reaping the visible results. The B2B revenue for Q2 rose 29% year-on-year to KRW352.6 billion, of which KRW45.9 billion came from the solution business. Such robust growth of the solution business is led by the success of our diverse corporate solution businesses, such as T Bizpoint and Geovision among others.

During the second half, the MyShop service, which is a management support solution for small businesses, as well as the reinforced Cloud product lineup are expected to contribute to the achievement of our annual guidance of KRW220 billion revenue for the year. The B2B market will grow further in the future and we will make even more thorough preparations to capture that growth.

Dear investors and analysts, although the uncertainties are rising in the overall business environment amidst the global economic crisis, SK Telecom will do its best to ensure stable profit generation while pursuing technology development and growth business exploration for the future. I would like to extend my appreciation to all the investors and analysts once again for your unwavering support. Thank you.

(Interpreted) With that we will begin the Q & A session. Please go ahead with questions.

(Interpreted) Our Q & A session will begin.

(Operator Instructions).

The first questions will be provided by Mr. Kim Hue Jae from Daishin Securities and the second questions will be provided by Mr. Kim Hong Sik from NH Securities. Mr. Kim Hue Jae, please go ahead with your question.

(Interpreted) I have the following two questions. First of all, could you elaborate further on the annual guidance for the rest of the year in more detail. And my second question has to do with your LTE subsidy suspension that you have implemented recently. How much marketing intensity do you anticipate into the third quarter? So could you elaborate on your strategies for the marketing side for the rest of the year?

(Interpreted) To address you first question regarding our annual guidance, to summarize, basically we have no plans to change our annual guidance for the revenue and OP, as well as CapEx figures. We will do our upmost until the year end to achieve the annual guidance as much as we can. Regarding the revenue guidance, we believe that we will be able to fully meet this target and also if you look at the LTE subscriber number increase recently, it has been quite healthy and also we are seeing turnaround in size for the ARPU side as well. So as a whole, we believe that we will be able to sufficiently meet the revenue target.

On the expense side, of course during the first half, there has been quite a bit of an increase, in terms of the expenses. However, we still have quite some time left until the rest of the year, which is the second half, and I believe that the market will stabilize going forward, as the telcos in the market make their full efforts to meet the annual guidance and their annual targets respectively.

To answer your second question, if you look at the third quarter related prospect, of course in the month of July because of the launching of some of the new handset models, there has been a temporary intensified competition among the players in the market in terms of the marketing. However, if you look at the entire third quarter - as I mentioned earlier, because we anticipate the telcos in the market to make more effort to meet their annual profitability target, I believe that we will begin to see stabilization in the market competition. And already as you look at the latter half of the July figures we are already seeing the actual results in this regard.

And as you are well aware, SK Telecom has decided to suspend the existing T-installment payment subsidy program for the LTE subscribers and we plan to maintain this policy in the meantime and for quite some time in the future. So as you can see, we are targeting both the profitability enhancement at the same time we are trying to grow the overall subscriber base for the LTE as well as the smartphone subscribers.

(Interpreted) The next questions will be presented by Mr. Kim Hong Sik from NH Nomura Securities. And the following questions will be presented by [Mr. Yan Jong Ing] from [Hambro] Investment Securities. Mr. Kim Hong Sik, please go ahead with your question.

(Interpreted) I also have two questions. Recently KCC has announced their guidelines regarding various policies including their position on the m-VoIP and the possibility of each telco to conduct any possible decisions on the mVoIP side at their discretion. Also I believe KCC has set aside their dedicated team to review the data tariff plan systems. So I was wondering what your view is regarding the future tariff plan system changes going forward. As a for instance, do you believe that mVoIP related option price plan will be introduced and do you anticipate voice tariffs to go down while the data tariffs are going up in the future? So what is your view about the tariff plans in the future?

And the second question has to do with your ARPU. Your ARPU results were quite healthy for the second quarter so I am quite -- wondering about your future prospects about ARPU going forward. So what is your anticipation for the ARPU growth rate for the rest of the year as well as next year as a whole?

(Interpreted) Let me address your first question regarding mVoIP issue. Recently KCC with regards to the allowance of the mVoIP services, their basis stance is that we should follow the existing rules and regulations with regards to the relevant network systems. And I believe that all the stakeholders in the market are poring over different options regarding the m-VoIP issue. SKT also believes that the change of policies regarding mVoIP in the market requires comprehensive consideration and review process. So we will make further comments on this issue once things become more finalized.

To elaborate slightly, when it comes to the recent controversy around mVoIP issue, there seems to be certain trend of discussions which is leaning towards the populism type of attitude. In which people are demanding that the mVoIP services should be allowed for everybody to use, anytime, anywhere, free of charge. But if you look at the perspectives of the telcos who have invested quite a bit into the network system already and who will be required to invest further in the future network investment, I believe that such a request will not stand valid -- in our views I believe.

I may now address your second question regarding our outlook for ARPU as we are witnessing the growing number of LTE subscribers.

To answer this question I believe that basically you should keep in mind the bigger denominator effect of SK Telecom because we tend to have bigger subscriber base to begin with compared to other competitors. As of the end of the first half, the share of LTE subscribers out of the total subscriber base stands at 12.5% and we believe that this proportion will only grow into the future. And by the year end we anticipate that proportion to increase up to 25% and into next year and the following year the growth will persist.

Therefore as the number of LTE subscribers grow out of the total subscriber base, it is only natural for us to expect ARPU increase as well. But when it comes to just how much ARPU increase can you anticipate in the year 2013, I believe that we should take a closer look as to the actual speed of LTE subscriber growth as well as the tariff changes that could take place in the future in a more statistical manner. So we will be able to answer that question only after that review is conducted.

(Interpreted) The next questions will be presented by Mr. Yan Jong Ing from Hambro Investment Securities. The following questions will be provided by Mr. John Kim from Deutsche Securities, Korea. Mr. Yan Jong Ing please go ahead with your question.

(Interpreted) I also have the following two questions. First of all you have always maintained the market share target of 50.5% and I was wondering how you plan to maintain that strategy going forward. As you know you have recently actually cancelled and stopped -- suspended the T-installment payment subsidy program and that will greatly assist your efforts for the cost reduction of course. But in terms of the subscriber market share it could be a negative factor. So if and when such two policies collide with each other, I was wondering how you plan to continue to manage the 50.5% market share target.

And my second question has to do with the plans for the tariff structure reshuffling between the voice and data tariffs. I have attended many public hearings held by the government and SKT at such forums have repeatedly mentioned the need to possibly lower the voice tariff while there is a strong need to raise the data related tariff. So I was wondering how the Company is preparing for such changes for the future.

And recently there has been some -- some of the US telcos now actually beginning to adjust and modify their data tariffs already. And seeing how such advanced countries are beginning to show a certain best case practices and existing cases, how convincing do you think your logic will become vis-a-vis the government in the future?

To answer your first question about the market share related strategy, I believe that the market share concept itself is a natural result of a fundamental competitiveness of a company. So if -- aside from the fundamental competitive factors, those other factors such as the marketing related expenses may affect the market share temporarily but it cannot be a long lasting type of an effect. So SKT's position is to continue to maintain our market leadership, leveraging our fundamental competitiveness.

And as you have mentioned, we have recently suspended the installment payment subsidy program and I believe that this type of a policy change which is something that it can be [flexibly] managed and utilized in the market. And we have decided to suspend the subsidy program recently and we plan to keep such suspensions stands for quite some time in the future. And rather than competing simply on the cost side or the marketing expense side, we really believe that competing on our enhanced fundamental competitiveness would be even more critical. Therefore I hope you understand that this policy decision as an expression of our commitment that we will be maintaining our leadership based on our fundamental competitiveness such as the network prowess.

And regarding your question about the tariff plans for the future. Just like the Verizon decision recently, we also in Korea we believe that it is at a critical juncture when we do need to reconsider the rebalancing between the voice and data related tariffs. And if you look at it from a long term perspective we have to think about the possible future investment in the future network expansion as the data usage increases in the market. So we believe that more rational data price plan should be considered. So SK Telecom will continue to review various options to come up with the best possible answers.

(Interpreted) The next questions will be provided by Mr. John Kim from Deutsche Securities Korea. And there are no participants with following questions. Mr. John Kim, please go ahead with your question.

Yes, thank you for the opportunity I have two questions. First is with respect to your marketing. It's similar to what Mr. Yan has just asked. It's been about six years since SKT's been pursuing 50.5% subscriber market share protection policy and when the policy was first introduced by your management, the rationale was that this would ultimately prove beneficial for the shareholders. Six years have passed and your share price is your all-time low. So does the management still feel this helps protect shareholder value and do you have any plans to shift your strategy to aiming for more focus on your revenue market share rather than your subscriber market share?

Second is the management's intentions for shareholder value. It's nice to see your share price rebound somewhat from all time low over the past month or so but it's still much lower than your multi-year range. So has this triggered the management to consider any new actions that might allow the investors to take up -- look at your stock with a slightly more positive bias?

(Interpreted) First of all I appreciate your comment and your question regarding the market share so let me address that question first. First of all I would like to remind you that the concept of the market share that we have been emphasizing is not a particular quantitative number that we must meet and not a single target to meet but rather as I mentioned earlier, we believe that this market share figure is a natural result of our fundamental competitiveness. So it is used rather as an indicator for us to track and reinforce our competitiveness accordingly as we track the trend of such market share.

So accordingly we believe that this market share figure is a type of an indicator or an index for us to gauge our market leadership at the moment. So it is a valuable index that we are leveraging. And I also believe that even the shareholders believe that our maintaining of the market leadership and reinforcing such leadership is quite critical and necessary and also I believe that the shareholders themselves are tracking as to how much our market leadership is changing or moving in the market.

So I believe that our Company management is committed to doing our best to reinforce and maintain our market leadership we also for the benefit of the shareholders going forward. But as you have pointed out, rather than simply looking at the simple, quantitative number in terms of the subscriber base as we look at our market leadership, we will also leverage other types of supplementary indices such as more qualitative subscriber information like average revenue per subscriber and other indicators as well.

I may now address your second question regarding our plans or any contra measures to further enhance the enterprise value from the shareholder perspective. First of all we do realize that as we enter into the second half our share price started slightly rebounding and we welcome such trends. Nevertheless we do feel strongly that we need to work much harder. And as we plan to maintain the same dividend ratio as the previous year, I believe that that dividend policy will prove attractive on our stock price going forward.

However, I believe that the more critical thing that will be helpful for everybody is to further improve our fundamental business results and the earnings results. And as I mentioned before as the subscriber number for the LTE service grows in the future even further, our ARPU will not only enhance during this year only but also into next year and the following year as well. And also in order to enable a truly significant revaluation of our platform business beyond the second half, we will be making all the measures that are necessary to make that happen. And we will do our very best in order to communicate about our stable capacity to generate profit while we could pursue a sound growth strategy as well.

Can I ask just one follow up question please? Is there any room for the management to consider adapting somewhat of a stock based compensation instead of just having your -- 100% of your compensation be based on cash.

(Interpreted) You're talking about the top management, right?

Yes.

(Interpreted) At the moment we are not reviewing the possibilities of linking the enterprise value to the top management remuneration. However, I believe that it is something that we could consider in the future.

(Interpreted) The following questions will be presented by Mr. Sam Min from Morgan Stanley. And there are no participants with following questions. Mr. Sam Min please go ahead with your question.

Yes, hi, thank you for this opportunity. I have a few I guess questions that I'm actually perplexed over because -- and I'd like to know what's the sort of dynamics at play here. But if you look at your marketing expense this quarter it was probably the -- one of the highest just in terms of marketing expense ratio, it went above 30%. But what's strange about - and this quarter is that the impact of that marketing expense was quite low in terms of net additions. Your net additions was only 100,000.

In the past, like in 2010, when you spent a marketing spend at a ratio as high as 28% you would normally get a net addition above 300,000. I'm also quite surprised that the deactivation is quite low and that overall, sort of, your handset turnover hasn't really -- it hasn't been rising. So it seems that when I analyze your marketing expense it's just purely subsidies that's essentially been driven up. So now if we just simply look at commissions per handset turnover we basically hit above 300,000. I believe in your calculation you have it at 280,000 or so in terms of FAC.

And then if I compare that to a competitor that reported two days ago I notice that they've had - they've spent quite a bit of money but the impact was quite positive both in terms of net additions and there was some upside in the growth additions handset turnover. So I just wanted to know what's sort of changing here; what's essentially going on? If you can explain that for me I would appreciate it. Thank you.

(Interpreted) To answer your question are the Head of our Marketing Strategy Division. Mr. [In Tan Lee] will be addressing that question.

(Interpreted) Yes, my name is In Tan Lee, the Head of the Marketing Strategy. First of all the fact that despite the high expenditure on the marketing side that our net addition did not grow as much. It can be actually perceived or looked at through the structural perspectives.

I believe that a couple of factors would affect the net addition market. First of all it has to do with changes in the demographics in which we are witnessing the rising number of foreigners living in Korea and also the net addition also is impacted by those first time handset owners in the market. And also the second big reason would be the demand for the table PCs or the usage of the second handset for existing handset owners.

But if I may talk about each of these sectors. First of all the foreign handset owners are actually seeking to use the MVNO services as the MVNO operators are expanding their presence. And also the first time handset owners because of the low pituitary rate in Korea, structurally that number of the population is going down as well. And when it comes to the tablet PC demand -- as the number of LTE smart devices are expanding in the market it is actually replacing the demand for a tablet PC and may come through those handset owners with a second cell phone. As the smartphone usage is widely adopted the demand for the second handset is also coming down as well. So as you can see structurally in the net addition market there are many downward pressures in terms of the market size growth.

So if I may summarize the marketing competition during the first half. First of all it can be marked by the intensified competition to win and lock in the LTE subscribers. And also as the unit price of these handset devices are becoming quite expensive -- also in line with that the amount of subsidy unit price has gone up as well. And also another affecting factor was that has gone up as well. And also another affecting factor was that basically focusing on the MNP market, there has been growing competition to win the LTE subscribers.

Could I ask you a follow up question on that as well. I was wondering if there was -- there was actually two pieces to that question, I guess. I think you answered the first part; can I have a better understanding why your competitor had a better impact relative to you on the net additions when marketing expense on a sequential basis increased by similar amounts which was around KRW140 billion absolute amount, Q-over-Q?

(Interpreted) I believe that in terms of the LTE subscriber login competition between the three telcos in the market, we do need to sum up the entire net addition number for all three companies. I believe that, depending on the situation, actually taking away subscribers from telco A to telco B, for instance, would (inaudible) a different telco, I believe that the net impact on the net addition was slightly different in a structural way.

Thank you.

(Interpreted) The next questions will be presented by Mr. [Xian Oh] from Merrill Lynch and the following questions will be presented by Mr. [Andy Milne] from [Kim Securities]. Mr. Xian Oh, please go ahead with your question.

Ah yes, thank you for the opportunity. We've enjoyed quite a peaceful time from regulatory/political interference with respect to tariffs; can you tell us what your expectations are given the presidential elections in December? And, if you're not expecting an interference from the regulators at all, can you please let us know why? Thank you.

(Interpreted) On this question, we have an executive in charge of the external international policies so he will address this issue.

(Interpreted) My name is [Chun-tik Cho], the Head of the CR Strategy division. As you know, during the second half of last year, we have reduced the basic fee and also this year the number of MVNOs have expanded in the market as well. So as a result, as you have just mentioned, so far, to date, the Government has not been giving us full-fledged pressure, per se, in terms of the tariff reduction.

Regarding the upcoming presidential election by the year end, of course there are different candidate camps from each party that are mentioning a few things about the possible tariff reduction on the telecoms side. But, so far, we are not at a stage where these presidential candidates are coming out with official political promises with regards to the tariff cuts yet. So we are in the process of convincing and explaining to the relevant parties the fact that the telecommunications infrastructure is a very critical ecosystem core for the overall ICT sector and it is critical to foster this area for the development for the rest of ICT. And I believe that even as we go through the presidential election preparation time, I believe that there will be deeper understanding about our position in the future as well.

Just one follow up question, given that the mobile ARPU has been declining in the last three or four years or so, do you think that continuous improvement in ARPU is possible? And if that does materialize, the regulators are likely to just let that happen?

(Interpreted) When it comes to the outlook for the ARPU, I believe that it will be quite different for each player -- for us, as well as [LVU plus] and KT -- in terms of the amount and the speed with which we would experience ARPU increase. But as we are beginning to see the increase in proportion of the LTE subscribers, barring any negative external surprises, I believe that ARPU is likely to go up in the future.

But I must say that the issue regarding the tariff cuts has to be looked at in a more comprehensive manner. We cannot simply look at it as a top-line growth related factor, this ARPU increase, but rather the tariff reduction would have to do with both the top-line growth as well as the bottom-line growth issue as well. Therefore, just because the top-line grows, I don't think that it would directly translate into a possible pressure to lower the tariff on your old price plan which would possibly impact the bottom line as well. So we don't think that it goes hand-in-hand.

Therefore, we are continuously expressing our view that we need to further invest in the Network going forward as a core infrastructure for the overall ICT ecosystem and therefore, in order to conduct continuous investment in this regard, we are convincing them that we do need to protect the bottom-line to a minimum level.

(Interpreted) The next questions will be presented by Mr. Andy Milne from Kim Securities. Please go ahead, Sir.

(Interpreted) I have the following three sets of questions. First of all, on a standalone financial statement basis, it looks like during this quarter your cash and cash equivalent has come down quarter-on-quarter, so what is the reason behind that? And the second question has to do with your possible plans to sell your Posco shares and -- or any other plans to further improve your financial soundness? And also, third question has to do with some specific numbers as to the ARPU for your smartphone users as well as LTE subscribers?

(Interpreted) First of all, the reason for the decreasing quarter-on-quarter amount of cash and cash equivalent has to do with the payout of the dividend that took place during the first half which applies to last year's dividend. Regarding the shares that we own on Posco, as you are well aware, because Posco has sold their shares on SK Telecom, we no longer have the cross-holding alliance between the two companies, so that is true. So SK too is reviewing various options to best leverage our holdings of the Posco shares at the moment, but we have not come to any final decision on this yet.

When it comes to the average ARPU for smartphone users as well as the LTE users, we would answer those questions on a one-on-one arrangement through the IR Department.

(Interpreted) Currently there are no participants with a question. (Operator Instructions).

(Interpreted) That closes the Q & A session and we will invite our CFO for his closing remarks.

(Interpreted) Thank you for staying with us until the very end of the earnings call for SK Telecom.

As the MNO market leader with a fundamental competitiveness, SKT will leverage its unsurpassed network and marketing competitiveness to further cement our leadership in the 4G LTE service as well, as a true leader. To reach the annual LTE subscriber target of 7 million by the year end we will flawlessly implement every step of our plan to ensure improvement in both ARPU and profitability. Based on stable profit generation capacity, we will continue to pursue technology development and growth business discovery for the future, and ultimately boost our enterprise value.

We ask all the investors and analysts for your continuous support and interest in SKT's efforts. The management at SK Telecom will do our best to share views with the investors and analysts through diverse communication channels. Once again, thank you for your participation today.

(Interpreted) This concludes the earnings conference call of SK Telecom for Q2 2012.