Good afternoon. First of all, thank you all for joining this conference call. And now we will begin the conference call by the fiscal year 2020 fourth quarter earnings results by SK Telecom. This conference will start with the presentation followed by a divisional Q&A session. [Operator Instructions]. And now we shall commence the presentation by SK Telecom.

Good afternoon. I am Jeong Hwan Choi [ph], Head of IR Planning at SK Telecom. Today's conference call will consist of the presentation on the earnings results for fiscal year 2020 and the future management plans and strategic direction by Poong Young Yoon, CFO and Head of Corporate Center 1; and Hyung-il Ha, Head of Corporate Center 2, followed by a Q&A session. Today, the achievements and strategic plans for MNO will be provided by Poong Young Yoon, Head of Corporate Center 1; and Hyung-il Ha, Head of Corporate Center 2, will discuss that of the new ICT business division. We also have here with us executives from the relevant business division to deepen your understanding. Before we begin, I want to remind you that all forward-looking statements are subject to change depending on the macroeconomic and market situation. Let me now present our CFO.

Good afternoon. This is Poong Young Yoon, CFO of SKT Telecom. Let me first discuss the consolidated earnings highlights for fiscal year 2020. Consolidated revenue for fiscal year 2020 recorded KRW 18,624.7 billion, up 5% year-on-year. A well-diversified ICT portfolio built around hyper connectivity enabled quick adaptation with a nonface-to-face business environment, thus resulting in sustained quarterly growth in all business divisions of MNO, media, security and commerce. As a result, we recorded yet another record-high revenue this year as we did last year. Consolidated operating income recorded KRW 1,349.3 billion, up 21.8% year-on-year, thanks to MNO's operating income turnaround and operating income improvement of media and commerce. The contribution of the new ICT businesses to earnings, excluding MNO increased 10 percentage points year-on-year, 24% as indicated that the new ICT businesses began to contribute not only to revenue but also through operating income. Net income is up by 74.3% year-on-year due to equity method income from SK Hynix. Let me now discuss major achievements and strategic direction for each business division. Nonconsolidated MNO revenue for 2020 recorded KRW 11,746.6 billion, up 2.8% year-on-year. Decline in roaming revenue due to the pandemic had a negative impact, but we achieved an annual revenue turnaround based on 5G subscriber growth and data usage increase. MNO operating income grew 7.5% year-on-year to record KRW 1,023.1 billion. While marketing expense and depreciation and amortization costs increased, revenue growth, backed by 5G expansion, led to a turnaround in operating income as well. In 2020, our MNO leadership was reconfirmed as we increased 5G market share and maintained #1 position through reasonable market operation and distribution innovation to cater to the non-face-to-face business environment. The 5G subscriber count stands at 5.48 million as of the end of 2020, which is expected to reach 9 million by…

I am Hyung-il Ha, Head of Corporate Center 2. Allow me to discuss the achievements and plans for the new ICT business division. First, the media business. Last year, the merger of SK Broadband and t-broad was completed successfully. Thanks to the effect of the merger and IPTV subscriber growth, we have secured 8.9 -- 8.59 million pay-tv subscribers in 2020, based on which we achieved record-high revenue and operating income. We will continue on with this high-growth trend through media business growth and B2B business expansion in 2021. Next is security business. In November last year, we decided to merge ADT Caps and SK Infosec to lead the security market and accelerate growth, and the merger will be completed in Q1 of 2021. We're determined to lead the integrated security service market by combining SK Telecom's 5G and AI, SK Infosec information security platform and ADT Caps' CMS infrastructure. At the time of acquisition in 2018, the annual revenue of ADT Caps was around KRW 780 billion. After 3 years, we expect that the revenue of the merged entity will double to surpass KRW 1.6 trillion this year. Moving on to commerce business. It recorded a 2-digit growth in GMV and achieved a positive operating income. 11ST saw more than 10% growth in GMV, thanks to strategic marketing, such as co-marketing with sellers and providing point benefits to consumers. SKT Stoa achieved GMV growth of more than 50% on the back of a virtuous cycle of growing customer base and expanded product sourcing capabilities. Going forward, 11ST will emerge as a global retail hub platform. As was announced in November last year, we will cooperate with Amazon for e-commerce business innovation to allow customers to buy Amazon products through 11ST. Let me now touch upon mobility, which has become the fifth business division of SK Telecom. Launched in December last year, T Map Mobility will grow into an all-in-one Mobility-as-a-Service provider that covers a wide range of services, including public transit, car rentals, car sharing and taxi. T Map Mobility and Uber will establish a joint venture for a taxi e-hailing service in April. Uber plans to invest more than $100 million in the JV and around $50 million in T Map Mobility. Lastly, let me move on to ONE Store, which is preparing for an IPO this year. Backed by a virtuous cycle of growing number of users and large game titles, GMV growth continued for 10 consecutive quarters, and the business became profitable in terms of net income last year. We will maintain the revenue growth trend this year for ONE Store and proceed with the IPO process. I will now hand it back to the CFO, who will discuss the guidance for 2021. Thank you.

Dividend for 2020 has been decided by the Board at KRW 10,000, including the paid out KRW 1000 interim dividend. The amount will be confirmed after the approval of the March AGM. Let me now present to you this year's guidance according to the management plan. Annual consolidated revenue is expected to be KRW 19,500 billion, up 5% year-on-year based on the solid growth of both MNO and new ICT businesses. We will do our best to exceed our guidance. In 2020, despite the unprecedented pandemic situation, SK Telecom achieved meaningful results with the highest-ever revenue and operating income growth. We believe that these achievements have been driven by constant innovation of services and technology-based on AI and a competitive business portfolio that allowed us to remain competitive in the nonface-to-face business environment. This year, we will further advance the business portfolio, carry out our first subsidiary IPO and strive for constant innovation and growth, based on AI and openness, in order to create greater corporate value. We ask for the continued interest and support from investors and analysts. Thank you.

[Operator Instructions]. The first question will be provided by Ahn Jae-min from NH Investment & Securities.

I have two questions. The first question is, in recent months. You can see that there has been a lot of talks about possible corporate governance structure change, and there has been some legislative changes as well. So what is the likelihood of any meaningful corporate governance change within this year? Can you provide us with some color on this topic? The second question is about price plans. Recently, 3 telcos in Korea have been launching lower-end 5G price plans in a competitive manner. So what is the impact of this lower-end price plan on your earnings?

Mr. Ahn, thank you for your question. Let me address your question regarding the possible corporate governance change according to the legislative change. Based on the ultimate goal of maximizing shareholder value by having not only our MNO business, but also new businesses being recognized in their value in the financial market, we have been open to all possibilities, and we have been exchanging opinions with various stakeholders, including shareholders. We have not made any specific decisions regarding corporate governance change, including various options of taking off some of the businesses. However, we have to mention that the basic assumption will be to maximize the corporate value, and we will opt for options that will be in line with the interest of shareholders. As soon as we have some specific decisions, we will communicate them with the market. Let me now move on to your question regarding the potential impact of the new price plan on our earnings. In January this year, as the first case of reporting and announcing new price plan under the new regime, we have announced a new online lower-end plan. This new price plan is an online-only price plan, which is about 30% lower than the existing tariff scheme. Therefore, as we have seen the increase in nonface-to-face consumption trends, there has been a lot of interest in this price plan. Compared to the existing tariff scheme and the selective discount option, the ARPU is likely to go down slightly. However, with more reasonable pricing available in the market, we expect the new subscriber growth and revenue growth as well.

The next question will be presented by Kim Hoi Jae from Daishin Securities.

I have two questions. The first question is related to your dividend plan. You communicated to us that starting from the year 2021, the interim dividend will be linked to the dividend situation of SK Hynix and the subsidiaries. So what will be the overall DPS range going forward? And as for the year-end dividend, it is linked to the performance of your MNO business. And currently, you said that you will maintain the level of KRW 9,000. But in order for this to be maintained or to enjoy some dividend upside, what will be the level of MNO performance that we will expect. Any guidelines for that? The second question is regarding the market competition landscape. Before the Galaxy 21 was launched, there were some talks about potential increase of subsidy for this new device. And after the iPhone's launch in December last year, what is the current marketing situation? And what is your outlook for marketing situation going forward?

Thank you Mr. Kim, for your questions. Let me first give you comments on our dividend policy for year 2021. Last year, we announced our dividend policy direction, and we mentioned that our dividend policy will be maintained in a stable manner by linking it to MNO performance. And we will also be more flexible in our dividends, especially for interim dividends by linking it to Hynix and other subsidiary performances. This basic stance will be maintained, but we do understand that there are market expectations about interim dividend upside as the dividend from SK Hynix has been increased slightly. In consideration of these factors, we will make discussions at the Board. And once the decision is made, we will communicate this with the market. The year-end dividend for fiscal year 2020, as was announced, has been decided at KRW 9,000. We will do our best to increase our dividend payout capability by accelerating revenue growth of various businesses, including operational efficiency improvement and strengthening of competitiveness of our MNO business. In addition to that, we have been spending a lot of time considering various options and measures to make our shareholder return policy more effective and efficient in order to maximize shareholder value. Once we have some specific plans, we will communicate them with the market. Let me now answer your question regarding the intensifying competition in the market in terms of marketing. It is quite a natural phenomenon that subsidies go up temporarily whenever new devices are launched. However, overall, the market -- stable market trend is continuing, and we expect this stable market trend to continue for the rest of the year. Going forward, SK Telecom will continue to lead healthy competition based on differentiated services rather than price or cost competition. Thank you.

The next question will be presented by Lee Soonhak from Hanwha Investment & Securities.

I would like to ask you two questions. The first question is that in your presentation, you mentioned that you're planning to transform your MNO business into an AI-based subscription service company, and this is quite new to us. So can you elaborate more on that? Especially in terms of your expected subscriber increase or revenue target, is there are any specific targets? Please share them with us. And the second question is related to your Mobility business. In December last year, the T Map Mobility was launched, and you mentioned that you will grow this into an all-in-one Mobility-as-a-Service company. So what's the current situation after this entity was launched? And what is your expectation for this company?

Thank you, Mr. Lee, for your question. Regarding your question on MNO business, I'm going to cover this, and then I will hand it over to Mr. Ha for the mobility-related question. In 2021, we would like to create a new growth story by transforming our MNO business into an AI platform-based. So we would like to go beyond the limits of MNO business to collaborate with various players in the areas of F&B, education, rentals and travel so that we can offer a subscription product and services that will have huge impact on our customers. In order to carry out this subscription service company-related marketing, we are currently in the process of building a new infrastructure, and we're also preparing to revamp our membership program that has been used as a very strong marketing tool as a telecom company. Based on these plans, we target 20 million subscription service users by the year 2023 and the revenue target of KRW 600 billion.

So I am Hyung-il Ha from Corporate Center 2, let me answer your question regarding the performance of T Map Mobility after the split off and our -- the strategy. As we mentioned, in December last year, the mobility business division of SK Telecom became T Map Mobility. In terms of financial investment raising and service preparation, we're smooth sailing right now, and we expect the joint venture established with Uber for taxi services and the official service launch to be happening in April. We're also planning to launch various services, including designated driver service and Mobility-as-a-Service in a gradual manner. T Map Mobility is planning to grow its 5 core areas by utilizing Korea's largest mobility platform, T Map, and the corporate value target by 2025 is KRW 4.5 trillion. The first of such core areas is a T Map life platform, which is for B2C customers. They include advertising, usage-based insurance, parking and other existing businesses which will be expanded, and we will also launch new types of subscription membership services. For B2B business, it's going to be centered around T Map auto, which is about growing the embedded T Map business for car OEMs and we are planning to expand the mobile ecosystem to the vehicles by offering navigation as well as infotainment services. And for mobility on demand area, we are planning to launch digital platform business, including the designated driver service and many other mobility services that we will mediate. And for taxi service, we are going to offer differentiated services in collaboration with Uber for joint venture. Finally, we're preparing for Mobility-as-a-Service, where various transportation means can be utilized and bundled in one service. Thank you.

The next question will be presented by Kim Joonsop from KB Securities.

I would like to ask two questions, one is regarding media and the other one is regarding commerce. You mentioned that there is a lot of interest in OTT services. And for your wavve business, are there any strategies related to collaborating with Disney and other companies? And the second question is regarding commerce. You -- can you update us on your partnership with Amazon since November? You mentioned that you are planning to grow 11ST as a global retail health platform. So if this happens in the near future, what is your specific user target or GMV target? What is your overall strategy for this part of the business?

Thank you, Mr. Kim, for your questions. First, let me comment on your question regarding wavve's strategy to maintain competitiveness in the market. SK Telecom, in terms of media business for IPTV and OTT, we are open to various options for hyper collaboration. But please do understand that we cannot disclose any specific names for potential partnership. In the fourth quarter of 2020, there was original content line of expansion, including Delayed Justice and Cheat On Me, If You Can, on the wavve platform as well as the popularity of drama series Penthouse, which was broadcast in a territorial TV network. As a result, we were able to reach the annual pay-tv subscriber number of 2 million in 2020, and the subscriber growth rate has been continuing. So we're smooth sailing in achieving our target of 5 million pay-tv subscribers by 2023. Currently, wavve is considering various options to improve the competitiveness through original content investment expansion and global partnerships. Let me move on to your question regarding 11ST and cooperation with Amazon. Currently, 11ST is making preparation in collaboration with Amazon so that 11ST customers can purchase Amazon products at the 11ST. And together with Amazon, we expect to offer unique shopping experiences for domestic customers. Based on smooth cooperation with Amazon, we are now in the process of making preparations so that we can offer differentiated benefits and services to our customers as soon as possible. When customers purchase Amazon products at 11ST, this will lead to an increase in traffic for direct cross-border buying cases. And this will not only increase the volume of cross-border purchase, but also the increase of the scale of domestic shopping. This collaboration between 11ST and Amazon is expected to increase the size of domestic cross-border purchase, which is currently around KRW 4 trillion in volume. And we will also work hard to allow domestic sellers to sell their products overseas. SK Telecom also expect to continue to collaborate with Amazon so that it's not only a commerce area, but also in other ICT areas, we will create synergies. Because of the constraints of -- regarding the contract with Amazon, we are not able to provide with any further details. So please do understand. But when time is right, we will communicate more details with the market. Thank you.

Our last question will be presented by Yoo Jay from Merrill Lynch.

I have two questions. The first question is that you mentioned in your presentation the overall guidance for 2021 in terms of revenue. Can you provide us with some breakdowns of your outlook on MNO revenue? And the second question is related to CapEx. In 2020, the executed CapEx have declined quite substantially. So what is your outlook for the deployment of CapEx for 2021?

Mr. Yoo, thank you very much your question. First, let me answer your question regarding the MNO subscriber and revenue outlook. Of course, we have to see the pace of subscriber growth going forward, but we expect that the mobile side, wireless revenue for 2021, is going to increase by 3% to 4% year-on-year. Regarding your question on the CapEx outlook, it's going to be similar to the level of 2020, and we will make sure to manage our CapEx efficiently. Thank you.

Thank you very much for joining us for this conference call. If you have any further questions, please contact the IR team. Thank you. So this is the end of conference call for fiscal year 2020 for SK Telecom. Thank you.