UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

FOR THE MONTH OF DECEMBER 2010
COMMISSION FILE NUMBER 333-04906

SK Telecom Co., Ltd.

11, Euljiro2-ga, Jung-gu
Seoul 100-999, Korea
(Address of principal executive offices)

     (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 o       Form 40-F o

     Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):                     

     Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

     Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):                     

     Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submission to furnish a report or other document that the registration foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

     Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes o No þ

     If “Yes” is marked, indicate below the file number assigned to the Registrant in connection with Rule 12g3-2(b): 82-__________

QUARTERLY BUSINESS REPORT

(From January 1, 2010 to September 30, 2010)

THIS IS A SUMMARY OF THE QUARTERLY BUSINESS REPORT ORIGINALLY PREPARED IN KOREAN AND IS IN SUCH FORM AS REQUIRED BY THE KOREAN FINANCIAL SERVICES COMMISSION.

IN THE TRANSLATION PROCESS, SOME PARTS OF THE REPORT WERE REFORMATTED, REARRANGED OR SUMMARIZED FOR THE CONVENIENCE OF READERS.

UNLESS EXPRESSLY STATED OTHERWISE, ALL INFORMATION CONTAINED HEREIN IS PRESENTED ON A NON-CONSOLIDATED BASIS IN ACCORDANCE WITH ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN KOREA, OR KOREAN GAAP, WHICH DIFFER IN CERTAIN RESPECTS FROM GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN CERTAIN OTHER COUNTRIES, INCLUDING THE UNITED STATES. WE HAVE MADE NO ATTEMPT TO IDENTIFY OR QUANTIFY THE IMPACT OF THESE DIFFERENCES.

 

 

I. COMPANY OVERVIEW

1. Company Overview

A. Corporate Legal Business Name: SK Telecom Co., Ltd. (The “Company”)

B. Date of Incorporation: March 29, 1984

C. Location of Headquarters

(1) Address: 11 Euljiro 2-ga, Jung-gu, Seoul, Korea

(2) Phone: +82-2-6100-2114

(3) Website: http://www.sktelecom.com

D. Corporate Purpose of the Company

Business Objectives

1. Information and communication business

2. Handset sales and lease business

3. New media business

4. Advertisement business

5. Communication sales business

6. Real estate business(development, maintenance, leasing, etc.) and chattel leasing business

7. Research and technology development related to Clause 1 through 4

8. Overseas business and trading business related to Clause 1 through 4

9. Manufacturing and distribution business related to Clause 1 through 4

10. Tourism

11. Electronic financial business

12. Motion picture business (Production, Importation, Distribution, Screening)

13. Lifetime education and lifetime educational facilities management

14. Electric related construction business

15. Information and communication related work business

16. Ubiquitous city construction and service business

17. Any business or undertaking incidental or conducive to the attainment of the objects above

E. Credit Ratings

(1) Corporate Bonds

						Credit rating entity
Credit rating date		Subject of rating		Credit rating		(Credit rating range)		Rating classification
May 29, 2007		Corporate bond		AAA		Korea Ratings		Regular rating
June 14, 2007		Corporate bond		AAA		Korea Information Services, Inc.		Regular rating
June 27, 2007		Corporate bond		AAA		Korea Investors Service, Inc.		Regular rating
November 5, 2007		Corporate bond		AAA		Korea Ratings		Current rating
November 5, 2007		Corporate bond		AAA		Korea Information Services, Inc.		Current rating
November 5, 2007		Corporate bond		AAA		Korea Investors Service, Inc.		Current rating
February 20, 2008		Corporate bond		AAA		Korea Ratings		Current rating
February 21, 2008		Corporate bond		AAA		Korea Investors Service, Inc.		Current rating
February 21, 2008		Corporate bond		AAA		Korea Information Services, Inc.		Current rating
June 3, 2008		Corporate bond		AAA		Korea Ratings		Regular rating
June 17, 2008		Corporate bond		AAA		Korea Investors Service, Inc.		Regular rating
June 30, 2008		Corporate bond		AAA		Korea Information Services, Inc.		Regular rating
October 20, 2008		Corporate bond		AAA		Korea Ratings		Current rating
October 20, 2008		Corporate bond		AAA		Korea Investors Service, Inc.		Current rating
October 20, 2008		Corporate bond		AAA		Korea Information Services, Inc.		Current rating
January 13, 2009		Corporate bond		AAA		Korea Ratings		Current rating
January 13, 2009		Corporate bond		AAA		Korea Investors Service, Inc.		Current rating
January 13, 2009		Corporate bond		AAA		Korea Information Services, Inc.		Current rating
February 23, 2009		Corporate bond		AAA		Korea Ratings		Current rating
February 23, 2009		Corporate bond		AAA		Korea Investors Service, Inc.		Current rating
February 23, 2009		Corporate bond		AAA		Korea Information Services, Inc.		Current rating
June 24, 2009		Corporate bond		AAA		Korea Information Services, Inc.		Regular rating
June 26, 2009		Corporate bond		AAA		Korea Ratings		Regular rating
June 30, 2009		Corporate bond		AAA		Korea Investors Service, Inc.		Regular rating
June 22, 2010		Corporate bond		AAA		Korea Ratings		Regular rating
June 29, 2010		Corporate bond		AAA		Korea Investors Service, Inc.		Regular rating
June 29, 2010		Corporate bond		AAA		NICE Investors Service Co, Ltd.		Regular rating

(2) Commercial Paper (“CP”)

						Credit rating entity		Rating
Credit rating date		Subject of rating		Credit rating		(Credit rating range)		classification
May 29, 2007		CP		A1		Korea Ratings		Current rating
June 14, 2007		CP		A1		Korea Information Services, Inc.		Current rating
June 27, 2007		CP		A1		Korea Investors Service, Inc.		Current rating
November 5, 2007		CP		A1		Korea Ratings		Regular rating
November 5, 2007		CP		A1		Korea Information Services, Inc.		Regular rating
November 5, 2007		CP		A1		Korea Investors Service, Inc.		Regular rating
June 3, 2008		CP		A1		Korea Ratings		Current rating
June 16, 2008		CP		A1		Korea Information Services, Inc.		Current rating
June 17, 2008		CP		A1		Korea Investors Service, Inc.		Current rating
October 20, 2008		CP		A1		Korea Ratings		Regular rating
October 20, 2008		CP		A1		Korea Investors Service, Inc.		Regular rating
October 20, 2008		CP		A1		Korea Information Services, Inc.		Regular rating
June 24, 2009		CP		A1		Korea Information Services, Inc.		Current rating
June 26, 2009		CP		A1		Korea Ratings		Current rating
June 30, 2009		CP		A1		Korea Investors Service, Inc.		Current rating
December 15, 2009		CP		A1		Korea Ratings		Regular rating
December 30, 2009		CP		A1		Korea Investors Service, Inc.		Regular rating
December 30, 2009		CP		A1		Korea Information Services, Inc.		Regular rating
June 22, 2010		CP		A1		Korea Ratings		Current rating
June 29, 2010		CP		A1		Korea Investors Service, Inc.		Current rating
June 29, 2010		CP		A1		NICE Investors Service Co, Ltd.		Current rating

(3) International Credit Ratings

				Credit rating		Credit rating company
Date of credit rating		Subject of rating		of securities		(Credit rating range)		Rating type
July 9, 2007		Global Bonds		A		Fitch (England)		Current rating
July 9, 2007		Global Bonds		A2		Moody’s (U.S.A.)		Current rating
July 9, 2007		Global Bonds		A		S&P (U.S.A.)		Current rating
April 7, 2009		Offshore Convertible Bonds		A		Fitch (England)		Current rating
April 7, 2009		Offshore Convertible Bonds		A2		Moody’s (U.S.A.)		Current rating
April 7, 2009		Offshore Convertible Bonds		A		S&P (U.S.A.)		Current rating

2. Company History

A. Location of Headquarters

- 22 Dohwa-dong, Mapo-gu, Seoul (July 11, 1988)

- 16-49 Hangang-ro 3-ga, Yongsan-gu, Seoul (November 19, 1991)

- 267 Namdaemun-ro 5-ga, Jung-gu, Seoul (June 14, 1995)

- 99 Seorin-dong, Jongro-gu, Seoul (December 20, 1999)

- 11 Euljiro 2-ga, Jung-gu, Seoul (December 13, 2004)

B. Significant Changes in Management

At the 26th General Shareholders’ Meeting held on March 12, 2010, Cho, Ki Haeng was elected as an inside director, Chung, Jay Young was elected as a member of the audit committee and Shim, Dal Sup was re-elected as an independent director while Sung Min Ha resigned from the Board on March 12.

C. Other Important Matters related to Management Activities

(1) SK C&C stock sale

On October 8, 2010, the Company sold 2,450,000 shares of SK C&C Co., Ltd. (“SK C&C”) out of 4,500,000 shares of SK C&C previously held, through an over-the-counter market transaction, at a price of Won 83,000 per share (total sales price of Won 203,350 million). After the sale, the Company’s ownership interest in SK C&C decreased to 4.1% from 9%.

3. Total Number of Shares

A. Total number of shares

(As of November 15, 2010)		(Unit: shares)

		Share type
Classification		Common shares				—				Total				Remarks
I. Total number of authorized shares			220,000,000				—				220,000,000				—
II. Total number of shares issued to date			89,278,946				—				89,278,946				—
III. Total number of shares retired to date			8,533,235				—				8,533,235				—
a. reduction of capital			—				—				—				—
b. retirement with profit			8,533,235				—				8,533,235				—
c. redemption of redeemable shares			—				—				—				—
d. others			—				—				—				—
IV. Total number of shares (II-III)			80,745,711				—				80,745,711				—
V. Number of treasury shares			9,650,712				—				9,650,712				—
VI. Number of shares outstanding (IV-V)			71,094,999				—				71,094,999				—

On July 22, 2010, the Company publicly disclosed its decision to acquire shares of treasury stock. The Company acquired 1,250,000 shares of its common stock on KRX from July 26, 2010 through October 20, 2010. Please refer to the result of treasury stock acquisition disclosed on October 21, 2010 through the Korean Financial Supervisory Service.

B. Treasury Stock

     (1) Acquisitions and Dispositions of Treasury Stocks

(As of November 15, 2010)		(Unit: Shares)

										At the beginning of				Changes
Acquisition methods						Type of shares				period				Acquired (+)				Disposed (-)				Retired (-)				At the end of period				Remarks
Direct acquisition				pursuant to Article 165-2 of the Financial Investment Services and Capital Markets Act of Korea (“FSCMA”)
						Common shares					8,322,738				1,250,000				—				—				9,572,738				—
						Preferred shares					—				—				—				—				—				—
				based on reasons other than those stipulated in Article 165-2 of the FSCMA		Common shares					77,974				—				—				—				77,974
						Preferred shares					—				—				—				—				—				—
Sub-total						Common shares					8,400,712	*			1,250,000				—				—				9,650,712	*			—
						Preferred shares					—				—				—				—				—				—
Indirect acquisition through trust and other agreements						Common shares									—				—				—								—
						Preferred shares					—				—				—				—				—				—
Total						Common shares					8,400,712				1,250,000				—				—				9,650,712				—
						Preferred shares					—				—				—				—				—				—

On July 22, 2010, the Company publicly disclosed its decision to acquire shares of treasury stock. The Company acquired 1,250,000 shares of its common stock on KRX from July 26, 2010 through October 20, 2010. Please refer to the result of treasury stock acquisition disclosed on October 21, 2010 through the Korean Financial Supervisory Service.

In addition, due to the termination of trust agreements for acquisition of treasury stock, the Company directly holds shares of treasury stock that it acquired through trust agreements. For more information, please refer to the reports on termination of trust agreements previously disclosed between October 26, 2010 and November 3, 2010 through the Korean Financial Supervisory Service.

     (2) Retirement of Treasury Stock

(Unit: in millions of Won, Shares)

Quantity

Monetary Amount

Retired

Retired

Acquisition Period

Retired Date

Retirement Purpose

Type of Share

(shares)

(in millions of Won)

of Retired Shares

Remarks

—

—

—

—

—

—

—

Total

Common

—

—

—

—

Preferred

—

—

—

—

     (3) Execution of Trust Agreements relating to Treasury Stocks, Etc. (As of November 15, 2010)

(Amounts: in millions of Won)

		At Start of Period								Executed (+)								Cancelled (-)								At End of Period
Category		Amount				No. of Transactions				Amount				No. of Transactions				Amount				No. of Transactions				Amount				No. of Transactions				Remark
Specified Money Trust			982,000				4				—				—				—				—				—				—
Trust Contracts with Asset Management Companies			—				—				—				—				—				—				—				—				—
Acquisition Contracts with Investment Companies			—				—				—				—				—				—				—				—
Total			982,000				4				—				—				—				—				—				—				—

     4. Status of Voting Rights

(As of November 15, 2010)		(Unit: shares)

Classification						Number of shares				Remarks
Total shares (A)		Common share					80,745,711				—
		Preferred share					—
Number of shares without voting rights (B)		Common share					9,650,712			Treasury shares
		Preferred share					—
Shares with restricted voting rights under the Korean law (C)			—				—				—
Shares with reestablished voting rights (D)			—				—				—
The number of shares with exercisable voting right s (E = A — B — C + D)		Common share					71,094,999				—
		Preferred share					—

     5. Dividends and Others

     A. Dividends

(1)		Distribution of cash dividends was approved during the 24th General Meeting of Shareholders held on March 14, 2008.
-		Distribution of cash dividends per share Won 8,400 (exclusive of an interim dividend of Won 1,000) was approved.
(2)		Distribution of interim dividends of Won 1,000 was approved during the 295th Board of Directors’ Meeting on July 18, 2008.
(3)		Distribution of cash dividends was approved during the 25th General Meeting of Shareholders held on March 13, 2009.
-		Distribution of cash dividends per share of Won 8,400 (exclusive of an interim dividend of Won 1,000) was approved.
(4)		Distribution of interim dividends of Won 1,000 was approved during the 305th Board of Directors’ Meeting on July 23, 2009.
(5)		Distribution of cash dividends was approved during the 26th General Meeting of Shareholders held on March 12, 2010.
-		Distribution of cash dividends per share of Won 8,400 (exclusive of an interim dividend of Won 1,000) was approved.
(6)		Distribution of interim dividends of Won 1,000 was approved during the 318th Board of Directors’ Meeting on July 22, 2010.

     B. Dividends for the Last 3 Fiscal Years

(Unit: in millions of Won, except per share value)

						As of and for the				As of and for the				As of and for the
						nine months ended				year ended December				year ended December
Classification						September 30, 2010				31, 2009				31, 2008
Par value per share (Won)							500				500				500
Net income							1,049,609				1,288,340				1,277,658
Net income per share (Won)							14,534				17,808				17,559
Total cash dividend							72,345				680,043				681,996
Total stock dividends							—				—				—
Percentage of cash dividend to available income (%)							6.9				52.8				53.4

						As of and for the				As of and for the				As of and for the
						nine months ended				year ended December				year ended December
Classification						September 30, 2010				31, 2009				31, 2008
Cash dividend yield ratio (%)		Common share					0.6				5.6				4.5
		Preferred share					—				—				—
Stock dividend yield ratio (%)		Common share					—				—				—
		Preferred share					—				—				—
Cash dividend per share (Won)		Common share					1,000				9,400				9,400
		Preferred share					—				—				—
Stock dividend per share (share)		Common share					—				—				—
		Preferred share					—				—				—

*		Total cash dividend of Won 681,996 million for the year ended December 31, 2008 includes the total interim dividend amount of Won 72,793 million, and the cash dividend amount per share of Won 9,400 includes the interim cash dividend amount of Won 1,000.
*		Total cash dividend of Won 680,043 million for the year ended December 31, 2009 includes the total interim dividend amount of Won 72,345 million, and the cash dividend amount per share of Won 9,400 includes the interim cash dividend amount of Won 1,000.
*		Total interim cash dividend paid out for the nine months ended September 30, 2010 was Won 72,345 million, or Won 1,000 per share.

II. BUSINESS

1. Business Overview

A. Industry Characteristics

As of September 30, 2010, the number of domestic mobile phone subscribers reached 50.21 million and, with more than 100% penetration rate, the Korean mobile communication market can be considered to have reached its maturation stage. However, the penetration rate is expected to increase further due to increased use of mobile phones by corporate users resulting from the rapid growth of smart phone markets, as well as the increasing popularity of high-tech mobile devices based on wireless data services such as tablet PC.

The Korean mobile communications market continues to improve in the quality of services with the help of advances in network-related technology evidenced by the world’s first commercialization of CDMA2000 1x, CDMA 1x EV-DO, and the development of highly advanced handsets, including various smart phones, that enable the provision of convergence services for multimedia contents, mobile commerce, telematics, satellite Digital Multimedia Broadcasting (“DMB”), digital home services, connected workforce services and other related services. In addition, through HSPA+ network commercialized in October 2010 and the LTE network expected to be introduced from the next year, the “industry productivity enhancement” (“IPE”) business directly resulting in the enhancement of productivity, such as the corporate “connected workforce” business, is expected to grow rapidly.

B. Growth Potential

(Unit: 1,000 persons)

						As of
						September				As of December 31,
Classification						30, 2010				2009				2008				2007				2006
Number of subscribers		SK Telecom					25,445				24,270				23,032				21,968				20,271
		Others (KT, LGU+)					24,765				23,675				22,575				21,529				19,926
		Total					50,210				47,944				45,607				43,497				40,197

(Source: Korea Communications Commission website)

C. Domestic and Overseas Market Conditions

The Korean mobile communication market includes the entire population of Korea with mobile communication service needs, and almost every Korean is considered a potential user. Although demand has primarily been in the domestic market, as the business territory expands to overseas market, the size of overseas sales is expected to grow in the near future. In addition, sales revenue related to data services is expected to increase due to the increasing popularity of smart phones and wireless Internet. Business-to-business segment that creates added values by adding additional solutions and applications is also growing. Seasonal and economic fluctuations have much less impact on the Korean mobile communication market compared to other industries.

Historical market share of the Company:

(Unit: %)

		As of
		September 30,				As of December 31,
Classification		2010				2009				2008				2007
Mobile communication services			50.7				50.6				50.5				50.5

Comparative market share:

      

(As of September 30, 2010)		(Unit: %)

Classification

SK Telecom

KT

LG U+

Market share

50.7

31.5

17.8

(Source: Korea Communications Commission website)

D. Business Overview and Competitive Strengths

The Company’s revenue in the nine months ended September 30, 2010 amounted to Won 9,287.6 billion, an increase of Won 286.5 billion compared to the corresponding period of 2009. This increase in revenue was meaningful since it was achieved despite a number of negative factors, including the charging of voice calls on a per-second basis from March 2010, the reduction of sign-up fees by 28% from December 2009 and the expansion of various discount plans. Operating income in the nine months ended September 30, 2010 amounted to Won 1,581.9 billion, which was lower than the corresponding period of 2009, due among others to the increase in marketing and depreciation expenses. In the third quarter of 2010, however, the Company achieved meaningful business performance such as securing 2.5 million smart phone subscribers as of September 30, 2010. Net income in the nine months ended September 30, 2010 amounted to Won 1,049.6 billion, which slightly increased from the corresponding period of 2009.

The Company will comply with the guideline set by the Korea Communications Commission that limits marketing expenses of mobile communication business operators to stabilize the competition in the mobile service markets, while maintaining its competitive advantage based on fundamental strengths deriving from handsets, price plans, networks and contents. In addition, the “Galaxy S” handset introduced in the end of June 2010 has acquired over 1,200,000 subscribers as of the end of September due to the Company’s marketing superiority. It reconfirmed the competitive edge of the Company in the field of smart phones. Wide penetration of smart phones has led to the vitalization of the Company’s T-Store, which has grown rapidly in the numbers of subscribers, contents and downloads, enhancing the Company’s competitiveness in the wireless data market.

As of September 30, 2010, the Company reached a subscriber number of approximately 25,450,000 and a 50.7% market share of the wireless market in Korea in terms of the number of subscribers. The Company plans to establish its leadership among users of smart phones by introducing various mobile platforms and streamlining the subscription process and pricing structures to enable subscribers to easily access their mobile content from multiple devices. The Company also plans to maintain its leadership in wireless internet market by providing innovative user interface for content access and through investment in data networks, network sharing and support of the content production.

In 2010, the Company intends to continue its efforts to seek growth in business-to-business markets, such as “industry productivity enhancement” (“IPE”) business in domestic and foreign markets. As IPE business creates added values by adding additional solutions and applications to the existing infrastructure, it is more cost effective compared to traditional business-to-business model. The Company’s business-to-business sales in the third quarter of 2010 increased meaningfully from the same period of 2009.

The Company will also continue its efforts to become a global leader in information and communication technology. It plans to actively respond to secular changes such as the growing popularity of smart phones and wireless Internet, as well as gaining competitive strengths in the IPE business. In particular, the Company intends to pursue opportunities to grow the wireless broadband and IPE businesses in Korea and abroad. In case of overseas businesses, the Company will maintain its disciplined approach under its “Start Small Scale Fast” principle.

2. Major Products & Services

A. Updates on Major Products and Services

(Unit: in millions of Won, %)

Business fields

Sales type

Item

Specific Usage

Major trademarks

Sales amount (ratio)

Information and communication

Services

Mobile communication

Mobile Phone

NATE, T store and others

8,970,696(96.6

%)

—

—

Others

—

Others

316,869(3.4

%)

B. Price Fluctuation Trend of Major Products and Services

Previously, based on the Company’s Basic Plan for monthly subscription, the basic service fee was Won 13,000 per month and the usage fee was Won 20 per 10 seconds and based on the Company’s Standard Plan, basic service fee was Won 12,000 per month and the usage fee was Won 18 per 10 seconds. As of September 30, 2010, based on the Company’s Standard Plan, basic service fee is Won 12,000 per month and the usage fee is Won 1.8 per 1 second.

3. Investment Status

A. Investment in Progress

(Unit: in 100 millions of Won)

Investment

Subject of

Amount already

Future

Business field

Classification

period

investment

Investment effect

Total investments

invested

investment

Network/Common

Upgrade/New installation

2010

Network, systems and others

Capacity increase and quality improvement; systems improvement

To be determined

8,609

To be determined

Total

—

To be determined

8,609

To be determined

B. Future Investment Plan

(Unit: in 100 millions of Won)

Expected investment amount

Expected investment for each year

Business field

Asset type

Amount

2010

2011

2012

Investment effect

Network/Common

Network, systems and others

18,500

18,500

To be determined

To be determined

Upgrades to the existing services and provision of new services

Total

18,500

18,500

To be determined

To be determined

Upgrades to the existing services and provision of new services

4. Revenues

(Unit: in millions of Won)

														Nine Months ended
Business field		Sales type				Item								September 30, 2010				2009				2008
Information and communication		Services				Mobile communication				Export					—				—				—
										Domestic					8,970,696				11,820,202				11,492,832
										Subtotal					8,970,696				11,820,202				11,492,832
			—			Others				Export					540				2,339				5,855
										Domestic					316,329				278,643				175,975
										Subtotal					316,869				280,982				181,830
Total										Export					540				2,339				5,855
										Domestic					9,287,025				12,098,845				11,668,807
										Total					9,287,565				12,101,184				11,674,662

5. Derivative Transactions

In order to hedge risks related to fluctuations in currency exchange rates and interest rates, the Company enters into currency swap contracts and interest rate swap contracts. The gain or loss generated from the derivatives contracts is recognized as the gains/losses for the current period or other comprehensive income/loss, in accordance with Korean GAAP. Fair value of the Company’s derivatives is calculated using the Company’s valuation models. In accordance with the derivatives contracts, the Company’s estimated gain/loss on the date of expiration is zero.

A. Currency Swap

(1) Purpose of Contracts: Hedging of risks related to fluctuations in currency exchange rates and interest rates

(2) Contract Terms

- Currency swap contract applying cash flow risk hedge accounting

The Company has entered into a currency swap contract with three banks including Citibank in order to hedge the foreign currency risk of unguaranteed U.S. dollar denominated bonds (face amounts totaling US $300,000,000) issued on April 1, 2004. As of September 30, 2010, in connection with the unsettled foreign currency swap contract to which the cash flow risk hedge accounting is applied, an accumulated loss on valuation of derivatives amounting to Won 2,514,726,000 (excluding tax effect totaling Won 1,250,328,000 and foreign exchange translation gain arising from unguaranteed U.S. dollar denominated bonds totaling Won 2,115,203,000) was accounted for as accumulated other comprehensive loss.

In addition, the Company has entered into a currency and interest rate swap contract with Credit Agricole Corporate & Investment Bank to hedge the foreign currency risk and the interest rate risk of U.S. dollar denominated floating rate long-term borrowings with face amounts totaling US$100,000,000 borrowed on October 10, 2006. As of September 30, 2010, in connection with this unsettled currency and interest rate swap contract, an accumulated loss on valuation of derivatives amounting to Won 5,672,745,000 (excluding tax effect totaling Won 1,158,147,000 and foreign exchange translation loss arising from U.S. dollar denominated long-term borrowings totaling Won 19,400 million) was accounted for as accumulated other comprehensive loss.

In addition, the Company has entered into a currency and interest rate swap contract with two banks including HSBC in order to hedge the foreign currency risk and the interest rate risk of unguaranteed Japanese yen denominated bonds (56-2) with face amounts totaling JPY 12,500,000,000 issued on November 13, 2007. As of September 30, 2010, in connection with this unsettled currency and interest rate swap contracts, an accumulated gain on valuation of derivatives amounting to Won 111,789,000 (excluding tax effect totaling Won 1,495,114,000 and foreign exchange translation loss arising from unguaranteed Japanese yen denominated bonds totaling Won 66,367,029,000) was accounted for as accumulated other comprehensive loss.

In addition, the Company has entered into a currency and interest rate swap contract with two banks including DBS in order to hedge the foreign currency risk and interest rate risk of U.S. dollar denominated floating rate bonds with face amounts totaling US$150,000,000 issued on November 20, 2008. As of September 30, 2010, in connection with this unsettled currency and interest rate swap

contract, an accumulated gain on valuation of derivatives amounting to Won 4,991,237,000 (excluding tax effect totaling Won 1,407,810,000 and foreign exchange translation gain arising from U.S. dollar denominated bonds totaling Won 45,794,432,000) was accounted for as accumulated other comprehensive gain.

In addition, the Company has entered into a currency and interest rate swap contract with Mizuho Corporate Bank in order to hedge the foreign currency risk and the interest rate risk of unguaranteed Japanese yen denominated bonds (59-2) with face amounts totaling JPY 3,000,000,000 issued on January 22, 2009. As of September 30, 2010, in connection with this unsettled currency and interest rate swap contract, an accumulated gain on valuation of derivatives amounting to Won 2,122,694,000 (excluding tax effect totaling Won 598,708,000 and foreign exchange translation gain arising from unguaranteed Japanese yen denominated bonds totaling Won 5,230,449,000) was accounted for as accumulated other comprehensive gain.

In addition, the Company has entered into a currency and interest rate swap contract with The Bank of Tokyo-Mitsubishi in order to hedge the foreign currency risk and the interest rate risk of unguaranteed Japanese yen denominated bonds (60-2) with face amounts totaling JPY 5,000,000,000 issued on March 5, 2009. As of September 30, 2010, in connection with this unsettled currency and interest rate swap contract, an accumulated gain on valuation of derivatives amounting to Won 619,337,000 (excluding tax effect totaling Won 174,685,000 and foreign exchange translation gain arising from unguaranteed Japanese yen denominated bonds totaling Won 10,444,072,000) was accounted for as accumulated other comprehensive gain.

In addition, the Company has entered into a currency swap contract with six banks including Morgan Stanley to hedge the foreign currency risk of unguaranteed U.S. dollar denominated bonds (with face amounts totaling US$400,000,000) issued on July 20, 2007, and has applied cash flow risk hedge accounting to this foreign currency swap contract starting from May 12, 2010. Accordingly, as of September 30, 2010, in connection with this unsettled foreign currency swap contract, an accumulated gain on valuation of currency swap of Won 549,322,000 that has accrued since May 12, 2010 (excluding tax effect totaling Won 154,937,000 and foreign exchange translation gain arising from unguaranteed U.S. dollar denominated bonds totaling Won 709,276,000) was accounted for as accumulated other comprehensive gain. Meanwhile, a loss on valuation of currency swap of Won 17,527,578,000 incurred prior to the date of applying cash flow risk hedge accounting in the first half of 2010 and a loss on valuation of currency swap of Won 64,533,708,000 for the first half of 2009, respectively, were charged to current operations.

B. Interest Rate Swap

(1) Purpose of Contracts: Hedging of risks related to fluctuations in interest rates

(2) Contract Terms

- Interest rate swap contract to which the cash flow risk hedge accounting is applied:

The Company has entered into an interest rate swap contract with three banks including Nonghyup Bank in order to hedge the interest rate risk of long-term borrowings (totaling Won 500 billion) during the period between July 28, 2008 and August 12, 2011. As of September 30, 2010, in connection with unsettled interest rate swap contract to which the cash flow risk hedge accounting is applied, an accumulated loss on valuation of derivatives amounting to Won 8,517,223,000 (excluding tax effect totaling Won 2,719,219,000) was accounted for as accumulated other comprehensive loss.

- Interest rate swap contract to which the hedge accounting is not applied

The Company has entered into an interest rate swap contract with two banks including DBS in order to hedge the interest rate risk of floating rate foreign currency bonds with face amounts totaling US$220,000,000 issued on April 29, 2009. In connection with this unsettled interest rate swap contract, losses on valuation of interest rate swap of Won 3,278,531,000 and Won 4,123,478,000 for the nine months ended September 30, 2010 and September 30, 2009, respectively, were charged to current operations.

6. Major Contracts

Completion

Contract

Contract Amount

Category

Vendor

Start Date

Date

Title

(Won 100M)

Construction

SK E&C

January 1, 2010

December 31, 2010

2010 Cell Site Facility Construction (Seoul Area)

855

SK E&C

January 1, 2010

December 31, 2010

2010 RF Relay Facility Construction (Seoul Area)

483

SK E&C

January 1, 2010

December 31, 2010

2010 N/W Facility Construction (Daegu SORO)

175

Service

SK C&C

January 1, 2010

December 31, 2010

2010 IT SM Contract

2,010

TU Media, Ltd.

January 1, 2010

December 31, 2010

2010 Satellite DMB Collaboration Contract

916

SK Marketing & Company

January 1, 2010

December 31, 2010

2010 Membership Collaboration Program

692

Product/Equipment

SK Telesys

March 12, 2010

December 24, 2010

2010 1st Optical Relay Facility Investment

314

SK Telesys

March 12, 2010

December 24, 2010

2010 1st RF Relay Facility Investment

297

SK Telesys

September 6, 2010

December 24, 2010

2010 3rd Optical Relay Facility Investment

215

Subtotal

5,957

7. R&D Investments

(Unit: in millions of Won)

						For the nine months
						ended September 30,				For the year ended				For the year ended
Category						2010				December 31, 2009				December 31, 2008				Remarks
Raw material							30				55				89				—
Labor							31,844				47,183				38,063				—
Depreciation							105,291				134,201				138,512				—
Commissioned service							45,021				69,750				85,837				—
Others							34,538				39,593				34,540				—
Total R&D costs							216,724				290,782				297,040				—
Accounting		Sales and administrative expenses					215,370				288,997				293,443				—
		Development expenses (Intangible assets)					1,354				1,785				3,597				—
R&D cost / sales amount ratio (Total R&D costs / Current sales amount×100)							2.33	%			2.40	%			2.54	%

8. Other information relating to investment decisions

A. Trademark Policies

The Company manages its corporate brand and other product brands such as “T” in a comprehensive way to protect and increase their value.

The Company’s ‘Brand Management Council’ in charge of overseeing its systematic corporate branding operates full time to execute decisions involving major brands and operates ‘Brandnet’, an intranet system to manage corporate brands which provides solutions including licensing of the brands and downloading of the Company logos.

B. Business-related Intellectual Properties

The Company owns intellectual property rights to the design of alphabet “T”. The rights are based on domestic trademark laws and the Company has proprietary and exclusive use of the trademark for 10 years and the rights are renewable. The designed alphabet “T” is registered in all business categories for trademarks (total of 45) and is being used as the primary brand of the Company.

III. FINANCIAL INFORMATION

1.

Summary Financial Information (Non-consolidated)

(Unit: in millions of Won)

		As of and for the
		nine months ended				As of and for the year ended December 31,
Classification / Fiscal Year		September 30, 2010				2009				2008				2007				2006
Current assets			5,651,983				4,983,052				3,990,503				4,094,059				4,189,325
•   Quick assets			5,636,356				4,960,396				3,976,576				4,075,378				4,172,887
•   Inventory			15,627				22,656				13,927				18,681				16,438
Non-current assets			13,681,876				14,314,581				14,626,992				14,038,451				11,624,728
•   Investments			4,991,915				5,107,653				5,668,127				5,940,045				3,547,942
•   Property and Equipment			4,824,989				5,196,521				4,698,214				4,594,413				4,418,112
•   Intangible assets			2,408,303				2,665,936				2,941,592				3,174,942				3,405,158
•   Other non-current assets			1,456,669				1,344,471				1,319,059				329,051				253,516
Total assets			19,333,859				19,297,633				18,617,495				18,132,510				15,814,053
Current liabilities			4,385,172				3,294,633				3,412,490				2,484,548				2,985,620
Non-current liabilities			3,525,009				4,761,550				4,475,998				4,221,016				3,522,006
Total liabilities			7,910,181				8,056,183				7,888,488				6,705,564				6,507,626
Capital			44,639				44,639				44,639				44,639				44,639
Capital surplus			3,033,287				3,032,009				2,957,095				2,954,829				2,962,699
Capital adjustment			(-)2,861,173				(-)2,708,407				(-)2,147,530				(-)2,072,486				(-)2,019,568
Other Cumulative Profit and Loss			878,068				913,919				373,784				1,594,099				473,904
Retained earnings			10,328,856				9,959,290				9,501,018				8,905,865				7,844,753
Total stockholders’ equity			11,423,679				11,241,450				10,729,007				11,426,946				9,306,427
Sales			9,287,565				12,101,184				11,674,662				11,285,900				10,650,952
Operating Income (or Loss)			1,581,855				2,179,337				2,059,896				2,171,543				2,584,370
Income (or Loss) from continuing operation			1,049,609				1,288,340				1,277,658				1,642,451				1,446,598
Current Period’s Net Income (or Loss)			1,049,609				1,288,340				1,277,658				1,642,451				1,446,598
(Unit: Won)
		For the nine
		months ended				For the year ended December 31,
Classification / Fiscal Year		September 30, 2010				2009				2008				2007				2006
Earnings per share			14,534				17,808				17,559				22,607				19,734
Diluted earnings per share			14,315				17,599				17,395				22,289				19,458

2.

Summary Financial Information (Consolidated)

(Unit: in millions of Won)

		As of and for the year ended December 31,
Classification / Fiscal Year		2009				2008				2007				2006				2005
Current assets			6,370,631				5,422,447				4,813,072				4,663,962				4,598,580
•   Quick assets			6,250,741				5,387,473				4,766,020				4,644,184				4,590,796
•   Inventory			119,890				34,974				47,052				19,778				7,784
Non-current assets			16,835,625				17,051,224				14,235,863				11,576,006				10,106,193
•   Investments			3,059,902				4,025,429				5,446,711				3,236,783				1,989,934
•   Property and Equipment			8,165,879				7,437,689				4,969,353				4,507,335				4,663,369
•   Intangible assets			3,992,325				3,978,145				3,433,962				3,518,411				3,452,889
•   Other non-current assets			1,617,519				1,609,961				385,836				313,477				—
Total assets			23,206,256				22,473,671				19,048,935				16,239,968				14,704,772
Current liabilities			4,894,936				4,628,821				3,016,874				3,208,416				2,863,373
Non-current liabilities			5,966,695				6,020,410				4,344,428				3,548,464				3,513,860
Total liabilities			10,861,631				10,649,231				7,361,302				6,756,880				6,377,233
Capital			44,639				44,639				44,639				44,639				44,639
Capital surplus			3,031,947				2,958,854				2,956,106				2,950,327				2,954,840
Capital adjustment			-2,746,885				(-)2,159,389				(-)2,072,723				(-)2,019,567				(-)2,048,515
Other Cumulative Profit/Loss			915,306				356,192				1,591,258				490,010				—
Retained earnings			9,909,752				9,448,185				8,914,970				7,847,434				7,267,649
Total stockholders’ equity			12,344,625				11,824,440				19,048,935				9,483,088				8,327,540
Sales			14,555,465				13,995,924				11,863,357				11,027,977				10,721,820
Operating Profit (or Loss)			1,878,544				1,751,227				2,101,955				2,621,132				2,670,616
Profit (or Loss) from continuing operation before tax			1,400,498				1,260,366				2,285,765				2,021,578				2,561,567
Current Period’s Net Profit			1,055,606				972,338				1,562,265				1,449,552				1,868,307
Net income attributable to majority interests			1,247,182				1,215,719				1,648,876				1,451,491				1,872,978
Number of Consolidated Companies			29				35				26				18				17

IV. AUDITOR’S OPINION

     1. Auditor

Nine months ended		Year ended December 31,
September 30, 2010		2009				2008
Deloitte Anjin LLC		Deloitte Anjin LLC				Deloitte Anjin LLC

     2. Audit Opinion

Term		Auditor’s opinion				Issues noted
Nine months ended September 30, 2010			—				—
Year ended December 31, 2009		Unqualified					—
Year ended December 31, 2008		Unqualified					—

     3. Remuneration for Independent Auditors for the Past Three Fiscal Years

     A. Audit Contracts

(Unit: in thousands of Won)

Term

Auditors

Contents

Fee

Total hours

Year ended December 31, 2010

Deloitte Anjin LLC

Semi-annual review

1,470,000

16,183

Quarterly review

Non-consolidated financial statements audit

Consolidated financial statements audit

IFRS-based financial statements review

Year ended December 31, 2009

Deloitte Anjin LLC

Semi-annual review

1,308,356

13,982

Quarterly review

Non-consolidated financial statements audit

Consolidated financial statements audit

Year ended December 31, 2008

Deloitte Anjin LLC

Semi-annual review

1,310,097

13,346

Quarterly review

Non-consolidated financial statements audit

Consolidated financial statements audit

     B. Non-Audit Services Contract with External Auditors

(Unit: in thousands of Won)

Term

Contract date

Service provided

Service duration

Fee

Year ended December 31, 2010

July 20, 2010

Management consulting

4 days

5,000

July 28, 2010

Tax consulting

15 days

18,000

July 28, 2010

Tax consulting

5 days

6,600

July 28, 2010

Tax consulting

30 days

40,000

July 28, 2010

Tax consulting

20 days

23,100

Year ended December 31, 2009

May 13, 2009

Tax consulting

30 days

40,000

May 22, 2009

Tax consulting

10 days

10,000

May 22, 2009

Tax adjustment for fiscal year 2008

20 days

34,000

May 22, 2009

Review of deferred corporate income tax for 1Q and 2Q

10 days

14,000

September 14, 2009

Review of quarterly tax adjustments

5 days

7,000

September 14, 2009

Tax consulting

20 days

20,000

December 28, 2009

Review of quarterly tax adjustments

5 days

7,000

December 28, 2009

Tax consulting

10 days

12,000

Year ended December 31, 2008

November 20, 2007

Set up services for agency tax manual

60 days

48,000

March 3, 2008

Tax adjustment for fiscal year 2007

10 days

33,000

May 15, 2008

Tax consulting

5 days

7,500

June 24, 2008

Foreign tax consulting re indirect taxes

4 days

6,000

August 13, 2008

Tax consulting

10 days

9,400

November 1, 2008

Tax consulting

4 days

5,000

November 19, 2008

Tax consulting

10 days

10,800

November 19, 2008

Review of deferred corporate income tax

for 1Q and 2Q

10 days

18,000

December 24, 2008

Review of deferred corporate income tax

for 3Q

3 days

6,000

December 24, 2008

Tax consulting

3 days

3,600

December 24, 2008

Tax consulting

3 days

3,000

     V. MANAGEMENT DISCUSSION AND ANALYSIS

     Not required in quarterly and half year reports under the Korean disclosure rules.

     VI. CORPORATE ORGANIZATION INCLUDING BOARD OF DIRECTORS AND AFFILIATED COMPANIES

     1. Board of Directors

     A. Overview of Board of Directors Composition

The Company’s Board of Directors is comprised of eight members: five independent directors and three inside directors. Within the Board, there are five Committees: Independent Director Nomination Committee, Audit Committee, Compensation Committee, CapEx Review Committee, and Corporate Citizenship Committee.

     B. (1) Significant Activities of the Board of Directors

Meeting		Date		Agenda		Approval
312 nd (the first meeting of 2010)		January 27, 2010		-   Financial Statements as of and for the year ended December 31, 2009.		Approved as proposed
				-   Annual Business Report as of and for the year ended December 31, 2009		Approved as proposed
				-   Report for Internal Accounting Management System
				-   Report for Subsequent Events following 4Q 2009
313 rd (the second meeting of 2010)		February 11, 2010		-   Convocation of the 26th Annual General Meeting of Shareholders		Approved as proposed
				-   Result of Internal Accounting Management System Evaluation
314 th (the third meeting of 2010)		March 12, 2010		-   Appointment of Committee Members		Approved as proposed
				-   Fund Management Transaction with Affiliated Financial Company (SK Securities)		Approved as proposed
				-   Establishment of SPC and Limited Partnership Agreement between SPC and Offshore Private Equity Fund		Approved as proposed

Meeting		Date		Agenda		Approval
315 th (the fourth meeting of 2010)		April 26, 2010		-   Establishment of SKT Customer Contact Channel Subsidiary		Approved as proposed
				-   Establishment of SKT Cell Site Maintenance Subsidiary		Approved as proposed
				-   Business Plan for Joint Venture with Disney		Approved as proposed
				-   Acquisition of Additional WCDMA Frequency		Approved as proposed
				-   Extension of KIF (Korea IT Fund) Maturity		Approved as proposed
				-   Partial Disposition of Shares of IHQ, Inc.		Approved as proposed
				-   Report for Subsequent Events following 1Q 2010
316th (the fifth meeting of 2010)		May 26, 2010		-   Investment in Packet One Networks		Approved as proposed
				-   Investment in Harbinger Global Wireless (HGW)		Approved as proposed
317th (the sixth meeting of 2010)		June 24, 2010		-   Fund Management Transaction with Affiliated Financial Company (SK Securities)		Approved as proposed
				-   Additional investment in network equipment in 2010		Approved as proposed
318th (the seventh meeting of 2010)		July 22, 2010		-   Proposal for Interim Dividend -   Proposal for acquisition of treasury stock -   Financial performance during 1H 2010 -   Report for Subsequent Events following 2Q 2010 -   Performance review of compliance program for 1H 2010 and planning for 2H 2010		Approved as proposed Approved as proposed
319th (the eighth meeting of 2010)		September 15, 2010		-   Fund Management Transaction with Affiliated Financial Company (SK Securities) -   Restructuring of Receivables related to Handset Installment Payment Plans		Approved as proposed

				Independent
Meetings		Dates		Directors Attended		Description
The first meeting of 2010		January 27, 2010		5 / 5		—
The second meeting of 2010		February 11, 2010		5 / 5		—
The third meeting of 2010		March 12, 2010		5 / 5		—
The fourth meeting of 2010		April 26, 2010		5 / 5		—
The fifth meeting of 2010		May 26, 2010		4 / 5		—

				Independent
Meetings		Dates		Directors Attended		Description
The sixth meeting of 2010		June 24, 2010		5 / 5		—
The seventh meeting of 2010		July 22, 2010		5 / 5		—
The eighth meeting of 2010		September 15, 2010		5 / 5		—

C. Committees within Board of Directors

     (1) Committee Structure

          a) Independent Director Nomination Committee

(As of November 15, 2010)

Number of Persons		Members				Remarks
		Inside Directors		Independent Directors
4		Man Won Jung, Ki Haeng Cho		Rak Yong Uhm, Jae Ho Cho		—

          b) Audit Committee

(As of November 15, 2010)

Number of Persons		Members				Remarks
		Inside Directors		Independent Directors
4		—		Dal Sup Shim, Hyun Chin Lim, Jay Young Chung, Jae Ho Cho		—

          c) Compensation Review Committee

(As of November 15, 2010)

Number of Persons		Members
		Inside Directors		Independent Directors
5		—		Dal Sup Shim, Rak Yong Uhm, Hyun Chin Lim, Jay Young Chung, Jae Ho Cho

          d) Capex Review Committee

(As of November 15, 2010)

Number of Persons		Members
		Inside Directors		Independent Directors		Remarks
4		Ki Haeng Cho		Dal Sup Shim, Rak Yong Uhm, Jay Young Chung		—

          e) Corporate Citizenship Committee

(As of November 15, 2010)

Number of Persons		Members
		Inside Directors		Independent Directors		Remarks
4		Ki Haeng Cho		Rak Yong Uhm, Hyun Chin Lim, Jay Young Chung		—

(2) Activities of the Committees of the Board of Directors (As of November 15, 2010)

								Independent Directors
								Rak Yong
								Uhm		Jae Ho Cho
								(Attendance:		(Attendance:
								100%)		100%)
Committee Name		Date of Activity		Agenda		Approval		Vote
Independent Director Nomination Committee		February 11, 2010		26th General Meeting of Shareholders: Proposal to nominate an Independent Director Dal Sup Shim		Approved as Proposed		For		For
		April 26, 2010		Election of Chairman of Committee — Man Won Jung		Approved as Proposed		For		For