SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 6-K

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

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 þ		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-          

 

 

BUSINESS REPORT

(From January 1, 2008 to September 30, 2008)

THIS IS A SUMMARY OF THE QUARTERLY 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.

Contents

I.		Overview			2
II.		Business			7
III.		Financial Information			17
IV.		Auditor’s Opinion			18
V.		Management Structure			20
VI.		Shares			29
VII.		Employees			31
VIII.		Transactions with Related Parties			32
IX.		Other Relevant Matters			34
Attachment: Korean GAAP Non-consolidated Financial Statements

I. OVERVIEW

1. Purpose of SK Telecom Co., Ltd. (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.		Personal property and real property lease 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.		Any business or undertaking incidental or conducive to the attainment of the objects above

2. Company History

A. Changes Since Incorporation

(1)

Date of Incorporation

	•		March 29, 1984 (date of shareholders’ meeting for the incorporation): Incorporated as Korea Mobile Communications Service Co., Ltd.
			(Authorized capital: Won 500 million / Paid-in capital: Won 250 million)

(2)

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. Mergers

(1)

Target: Shinsegi Communication Co., Ltd.

	•		Date: January 13, 2002
	•		Registration: January 16, 2002

(2)

Target: SK IMT Co., Ltd.

	•		Date: May 1, 2003
	•		Registration: May 7, 2003

C. Significant Recent Business Events

(1)

Retirement of treasury stock

In accordance with the resolution of board of directors dated October 23, 2008, the Board resolved to acquire 448,000 shares of treasury stock in the market for the period from October 27, 2008 to January 26, 2009, in order to retire the Company’s retained earnings.

(2)

Issuance of unguaranteed bonds

In accordance with the resolution of board of directors dated September 25, 2008, the Company issued unguaranteed bonds with face amount of W50 billion and W250 billion, respectively, for W298.7 billion. The bonds bear an annual rate of 6.77% and 6.92%, respectively, and will be repaid in full at their maturities, October 28, 2010 and October 28, 2013, respectively.

3. Information Regarding Shares

A. Total number of shares

(As of September 30, 2008)						(Unit: shares)
		Share type
Classification		Common shares				—				Total				Remarks
I. Total number of issuable 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			8,085,235				—				8,085,235				—
1. Capital reduction			—				—				—				—
2. Share cancellation			8,085,235				—				8,085,235				—
3. Redeemed shares			—				—				—				—
4. Others			—				—				—				—
IV. Total number of shares (II-III)			81,193,711				—				81,193,711				—
V. Number of treasury shares			8,400,708				—				8,400,708				—
VI. Number of shares outstanding (IV-V)			72,793,003				—				72,793,003				—

B. Capital Stock and Price per Share

(As of September 30, 2008)

(Unit: Won, shares)

Capital (total face value)

Price per share

Capital amount in

Total

Capital/

Capital/

financial

number of issued

Total amount of

Par value

Total number of

Number of

statements

shares

distributed shares

per share

issued shares

distributed shares

Classification

Type

(a)

(IV of A×b)

(VI of A×b )

(b)

(a / IV of A.)

(a / VI of A.)

Registered

Common shares

44,639,473,000

40,596,855,500

36,396,501,500

500

549.8

613.2

Total

44,639,473,000

40,596,855,500

36,396,501,500

500

549.8

613.2

C. Acquisition and Disposition of Treasury Shares

(1)

Status of Acquisition and Disposition of Treasury Shares

						Amount at the																Amount at the end
Acquisition method		Type of share				beginning of period				Acquisition (+)				Disposition (-)				Retirement (-)				of period
Direct acquisition pursuant to Article 189-2 (1) of the relevant Act		Common share					4,644,354				—				208,326				4,436,028				—
		Preferred share					—				—				—				—				—
Direct acquisition based on causes other than those stipulated in Article 189-2 (1) of the relevant Act		Common share					77,970				—				—				77,970				—
		Preferred share					—				—				—				—				—
Sub-total		Common share					4,722,324				—				208,326				4,513,998				—
		Preferred share					—				—				—				—				—
Indirect acquisition through trust and other agreements		Common share					3,886,710				—				—				3,886,710				—
		Preferred share					—				—				—				—				—
Total		Common share					8,609,034				—				208,326				8,400,708				—
		Preferred share					—				—				—				—				—

D. Employee Stock Ownership Program

(1)

Transactions with the Employee Stock Ownership Program

•

The Company lent funds to the Employee Stock Ownership Program to finance purchases of the Company’s stock by employees, and the Employee Stock Ownership Program re-lent the amount to the Company’s employees in accordance with its internal allotment standards.

										(Unit: in thousands of Won)
Classification		Loan Date				Amount				Repayment Condition				Remarks
5th			1999.08.23				118,577,755			8-year installment repayment plan following a three-year grace period					—
8th(1)			2007.12.23				31,017,044			5-year installment repayment plan following a two-year grace period					—
8th(2)			2008.01.23				29,676,039			5-year installment repayment plan following a two-year grace period					—

•

The loan is deducted from wages for each individual to repay the Employee Stock Ownership Program, and is subsequently repaid to the company.

(As of September 30, 2008)										(Unit: in thousands of Won)
						Amount								Balance
Classification		Initial Loan				Repayment Amount				Accumulated Repayment Amount
5th			118,577,754				1,404,298				116,179,808				2,397,947
8th(1)			31,017,043				1,451,021				1,451,021				59,242,062
8th(2)			29,676,039
Total			179,270,838				2,855,319				117,630,829				61,640,009

(2)

Voting Rights of the Employee Stock Ownership Program

•

During a designated period, to be 7 days or longer, each individual member of the Program may exercise his voting rights by expressing his intention on the shareholders’ meeting agenda through a written power of attorney to a designated proxy.

(3)

Shareholdings of the Employee Stock Ownership Program

•

As the relevant law requires an immediate transfer of the shares directly purchased by the employees to the account of the individual purchasers, the Company transfers and holds the employees’ stock in separate individual accounts within the program once the number of shares for each individual member is determined.

(Unit: shares)

Account

Balance at the

Balance at the end

Classification

classification

Types of share

beginning of period

of period

5th

Member Account

Common share

139,338

126,813

8th(1)

171,871

371,156

8th(2)

208,326

Total

519,535

497,969

     4. Status of Voting Rights

(As of September 30, 2008)										(Unit: shares)
						Number of
Classification						shares				Remarks
Total outstanding shares (A)		Common share					81,193,711				—
		Preferred share					—
Number of shares without voting rights (B)		Common share					8,400,708			Treasury shares
		Preferred share					—
Shares with restricted voting rights under the Stock Exchange Act and other laws (C)		Common share					—				—
Shares with reestablished voting rights (D)			—				—				—
The number of shares with exercisable voting rights (E = A - B - C + D)		Common share					72,793,003				—
		Preferred share					—

5. Dividends and Others

						(Unit: in millions of Won except per share value)
						As of and for the				As of and for the				As of and for the
						six months ended				year ended				year ended
						September 30,				December 31,				December 31,
Classification						2008				2007				2006
Par value per share							500				500				500
Current net income							1,014,535				1,642,451				1,446,598
Net income per share							13,940				22,607				19,734
Income available for distribution as dividend							—				1,603,828				1,574,716
Total cash dividend							72,793				682,379				582,386
Total stock dividend							—				—				—
Percentage of cash dividend to available income (%)							—				41.6				40.3
Cash dividend yield ratio (%)		Common share					—				3.8				3.6
		Preferred share					—				—				—
Stock dividend yield ratio (%)		Common share					—				—				—
		Preferred share					—				—				—
Cash dividend per share		Common share					1,000				9,400				8,000

						(Unit: in millions of Won except per share value)
						As of and for the				As of and for the				As of and for the
						six months ended				year ended				year ended
						September 30,				December 31,				December 31,
Classification						2008				2007				2006
		Preferred share					—				—				—
Stock dividend per share		Common share					—				—				—
		Preferred share					—				—				—

II. BUSINESS

1. Business Summary

A. Industry Status

(1) Characteristics of the Industry

     As of September 30, 2008, the number of domestic mobile phone subscribers reached approximately 45.3 million and with a 93.2% penetration rate, and the Korean mobile communication market can be considered to have reached its maturation stage. However, considering the number of European countries with penetration rates exceeding 90%, additional future growth of the domestic market may be possible.

     The Korean mobile communications market continues to improve 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 that enables the provision of convergence services for multimedia contents, mobile commerce, telematics, satellite DMB, digital home services and other related contents.

(2) Industry Growth

						As of												(Unit: 1,000 persons)
						September 30,				As of December 31,
Classification						2008				2007				2006				2005				2004
Penetration rate (%)							93.2				89.8				83.2				79.4				75.9
		SK Telecom					22,876				21,968				20,271				19,530				18,783
Number of subscribers		Others (KTF, LGT)					22,399				21,530				19,926				18,812				17,803
		Total					45,275				43,498				40,197				38,342				36,586

(Data: Ministry of Information and Communication website)

(3) Market Characteristics

     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. Korea’s mobile communication market penetration continues to grow, reflecting increased usage of mobile communications services by elementary school and pre-school children. 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. Seasonal and economic fluctuations have much less impact on the Korean mobile communication market compared to other industries.

B. Company Status

(1) Market Share

*

Historical market share of the Company

										(Unit: %)
Classification		As of September 30,
		2008				2007				2006
Mobile phone			50.5				50.5				50.4

*		Comparative market share

(Unit: %)

Classification

As of September 30, 2008

SK Telecom

KTF

LG Telecom

Market share

50.5

31.5

17.9

(Data: Ministry of Information and Communication website)

(2) New Business Contents and Prospects

N/A

2. Major Products

A. Status of Major Products as of September 30, 2008

(Unit: in millions of Won, %)

Business field

Sales type

Item

Major trademarks

Sales amount (ratio)

Information and communication

Services

Mobile phone

June, NATE and others

7,922,171 (91.4

%)

Others

Others

745,673   (8.6

%)

B. Price Trend of Major Products

												(Unit: Won)
				As of
				September 30,
Item				2008				2007				2006
Mobile phone		Basic fee (per month)			13,000				13,000				13,000
(Based on standard call charge)		Service fee (per 10 seconds)			20				20				20

3. Investment Status

A. Investments in Progress

(Unit: in 100 millions of Won)

Amount

Subject of

Total

already

Future

Business field

Classification

Investment period

investment

Investment effect

investments

invested*

investment

Network/Common

Upgrade/New installation

2008

Network, systems and others

Capacity increase and quality improvement;

19,700

10,266

9,434

systems improvement

B.

Future Investment Plan

(Unit: in 100 millions of Won)

Expected investment for each

Expected investment amount*

year

Business field

Asset type

Amount

2008

2009

Investment effect

Network/Common

Network, systems and others

19,700

19,700

N/A

Upgrades to the existing services and provision of new services

Total

19,700

19,700

N/A

—

*		The expected investment amount of Won 1,970.0 billion is the planned investment amount for 2008.

4. Derivative Products and Others

A. Derivatives Contracts

(1) FX Swap

     a)   Purpose of Contracts: Currency Exchange or Interest Rate Risk Hedging

     b)   Contract Terms

— Income/loss on valuation on the following currency swaps were calculated using cash flow hedge accounting:

(As of September 30, 2008)

(Unit: in millions of Won)

Due

Income/loss on

Contract amount

Contract party

Contract date

date

Proceeds payment method

valuation

US$125 million

Citibank

March 23, 2004

April 1, 2011

Exchange on the date immediately preceding

(1,382

)

the principal and

interest payment date

US$125 million

Credit Suisse

March 23, 2004

April 1, 2011

Same as above

(2,204

)

US$50 million

BNP Paribas

March 23, 2004

April 1, 2011

Same as above

392

(As of September 30, 2008)

(Unit: in millions of Won)

Contract amount

Contract party

Contract date

Due date

Proceeds payment method

Income/loss on valuation

US$100 million

Calyon

October 10, 2006

October 10, 2013

Exchange on the date of the principal and interest payment date

22,934

JPY 9,100 million

SMBC

November 13, 2007

November 13, 2012

Same as above

33,583

JPY 3,400 million

HSBC

November 13, 2007

November 13, 2012

Same as above

10,884

—		Income/loss on valuation on the following currency swap was calculated using fair value hedge accounting:

(As of September 30, 2008)

(Unit: in millions of Won)

Contract amount

Contract party

Contract date

Due date

Proceeds payment method

Income/loss on valuation

HKD 10,941 million

8 Banks including Hana Bank

September 3, 2007

September 16, 2008

Payment of HK Dollars and receipt of Korean Won on September 16, 2008

(109,934

)

—		Income/loss on valuation on the following currency swaps were calculated using sales accounting:

(As of September 30, 2008)

(Unit: in millions of Won)

Contract amount

Contract party

Contract date

Due date

Proceeds payment method

Income on valuation

US$100 million

Credit Suisse

May 27, 2004

May 27, 2009

Exchange before principal payment date

1,788

US$150 million

Morgan Stanley

July 20, 2007

July 20, 2017

Same as above

52,980

US$150 million

Merrill Lynch

July 20, 2007

July 20, 2017

Same as above

51,302

US$100 million

Barclays Capitals

July 20, 2007

July 20, 2017

Same as above

34,333

(2)

Interest Rate Swap

	a)		Purpose of Contracts: Interest Rate Risk Hedging
	b)		Contract Terms
	—		Income/loss on valuation on the following interest rate swap was calculated using cash flow hedge accounting:

(As of June 30, 2008)

(Unit: in millions of Won)

Contract

Due

Income/loss on

Contract amount

Contract party

date

date

Proceeds payment method

valuation

200 Billion Won

Shinhan Bank

June 28, 2006

June 29, 2010

Fixing of interest payment date / exchange of floating interest rate

3,104

100 Billion Won

NH Bank

July 30, 2008

July 30, 2011

Same as above

(613)

50 Billion Won

NH Bank

Aug. 13, 2008

Aug. 12, 2011

Same as above

(127)

150 Billion Won

Hana Bank

July 31, 2008

July 31, 2011

Same as above

(537)

100 Billion Won

KD Bank

July 28, 2008

July 28, 2011

Same as above

(108)

100 Billion Won

KD Bank

July 29, 2008

July 29, 2011

Same as above

(324)

5. R&D Investments

								(Unit: in thousands of Won)
				For the nine				For the				For the
				months ended				year ended				year ended
				September 30,				December 31,				December 31,
Category				2008				2007				2006				Remarks
Raw material					55,183				96,217				184,969				—
Labor					28,182,648				39,388,760				33,986,701				—
Depreciation					97,640,417				129,208,262				134,461,257				—
Commissioned service					63,490,626				90,363,645				83,751,223				—
Others					22,822,265				37,609,969				35,680,197				—
Total R&D costs					212,191,139				296,666,853				288,064,347				—

								(Unit: in thousands of Won)
				For the nine				For the				For the
				months ended				year ended				year ended
				September 30,				December 31,				December 31,
Category				2008				2007				2006				Remarks
Accounting		Sales and administrative expenses			209,130,110				288,519,863				277,807,352				—
		Development expenses (Intangible assets)			3,061,029				8,146,990				10,256,995				—
R&D cost / sales amount ratio (Total R&D costs / Current sales amount×100)					2.455				2.63	%			2.70	%			—

6. Other Matters

A. External Fund Procurement Summary

*

Domestic procurement

										(Unit: in millions of Won)
		Beginning				New				Reduction from
Source of procurement		balance				procurement				repayment				Ending balance				Remarks
Bank			200,000				—				—				200,000			—
Insurance company			—				—				—				—			—
Merchant banking			—				—				—				—			—
Loan specialty financial company			—				—				—				—			—
Mutual savings bank			—				—				—				—			—
Other financial institutions			—				—				—				—			—
Total procurement from financial institutions			200,000				—								200,000			—
Corporate bond (public offering)			1,822,723				20,304								1,843,027			Exchange rate adjustment
Corporate bond (private offering)			—				—				—				—			—
Paid-in capital increase (public offering)			—				—				—				—			—
Paid-in capital increase (private offering)			—				—				—				—			—
Asset—backed securitization (public offering)			—				—				—				—			—
Asset—backed securitization (private offering)			—				—				—				—			—
Others			300,000				—				—				300,000			CP Publishment
Total procurement from capital market			2,122,723				20,304				—				2,143,027			—
Borrowings from shareholder, officer and affiliated company			—				—				—				—			—
Others			—				—				—				—			—
Total			2,322,723				20,304				—				2,343,027			—

*

Overseas procurement

														(Unit: in millions of Won)
										Reduction in
		Beginning				New				repayment and				Ending
Procurement source		balance				procurement				others				balance				Remarks
Financial institutions			104,340				14,430				—				118,770			Exchange rate adjustment
Overseas securities (Corporate bonds)			730,380				101,010				—				831,390			Exchange rate adjustment
Overseas securities (shares and others)			268,415				—				—				268,415				—
Asset—backed securitization			—				—				—				—				—
Others			—				—				—				—				—
Total			1,103,135				115,440				—				1,218,575				—

B. Credit Ratings

(1)

Corporate Bonds

		Subject of				Credit rating entity		Evaluation
Credit rating date		valuation		Credit rating		(Credit rating range)		classification
June 13, 2006		Corporate bond		AAA		National Information on Credit Evaluation, Inc.		Regular valuation
June 21, 2006		Corporate bond		AAA		Korea Ratings		Regular valuation
June 22, 2006		Corporate bond		AAA		Korea Investors Service, Inc.		Regular valuation
September 1, 2006		Corporate bond		AAA		National Information on Credit Evaluation, Inc.		Current valuation
September 1, 2006		Corporate bond		AAA		Korea Ratings		Current valuation
September 1, 2006		Corporate bond		AAA		Korea Investors Service, Inc.		Current valuation
October 27, 2006		Corporate bond		AAA		National Information on Credit Evaluation, Inc.		Current valuation
October 27, 2006		Corporate bond		AAA		Korea Ratings		Current valuation
May 29, 2007		Corporate bond		AAA		Korea Ratings		Regular valuation
June 14, 2007		Corporate bond		AAA		National Information on Credit Evaluation, Inc.		Regular valuation
June 27, 2007		Corporate bond		AAA		Korea Investors Service, Inc.		Regular valuation
November 5, 2007		Corporate bond		AAA		Korea Ratings		Current valuation
November 5, 2007		Corporate bond		AAA		National Information on Credit Evaluation, Inc.		Current valuation
November 5, 2007		Corporate bond		AAA		Korea Investors Service, Inc.		Current valuation

		Subject of				Credit rating entity		Evaluation
Credit rating date		valuation		Credit rating		(Credit rating range)		classification
Feb.20, 2008		Corporate bond		AAA		Korea Ratings		Current valuation
Feb. 21, 2008		Corporate bond		AAA		National Information on Credit Evaluation, Inc.		Current valuation
Feb. 21, 2008		Corporate bond		AAA		Korea Investors Service, Inc.		Current valuation
June 3, 2008		Corporate bond		AAA		Korea Ratings		Regular valuation
June 17, 2008		Corporate bond		AAA		Korea Investors Service, Inc.		Regular valuation
June 30, 2008		Corporate bond		AAA		National Information on Credit Evaluation, Inc.		Regular valuation

*

Rating definition: “AAA” — The certainty of principal and interest payment is at the highest level with extremely low investment risk, and is stable in that there is no influence of any environmental change under reasonable expectation conditions.

(2)

Commercial Paper (“CP”)

		Subject of				Credit rating entity		Evaluation
Credit rating date		valuation		Credit rating		(Credit rating range)		classification
January 3, 2006		CP		A1		National Information on Credit Evaluation, Inc.		Regular valuation
January 4, 2006		CP		A1		Korea Ratings		Regular valuation
June 13, 2006		CP		A1		National Information on Credit Evaluation, Inc.		Current valuation
June 21, 2006		CP		A1		Korea Ratings		Current valuation
June 22, 2006		CP		A1		Korea Investors Service, Inc.		Current valuation
September 1, 2006		CP		A1		Korea Ratings		Regular valuation
December 27, 2006		CP		A1		National Information on Credit Evaluation, Inc.		Regular valuation
December 27, 2006		CP		A1		Korea Investors Service, Inc.		Regular valuation
May 29, 2007		CP		A1		Korea Ratings		Current valuation
June 14, 2007		CP		A1		National Information on Credit Evaluation, Inc.		Current valuation
June 27, 2007		CP		A1		Korea Investors Service, Inc.		Current valuation
November 5, 2007		CP		A1		Korea Ratings		Regular valuation
November 5, 2007		CP		A1		National Information on Credit Evaluation, Inc.		Regular valuation
November 5, 2007		CP		A1		Korea Investors Service, Inc.		Regular valuation
June 3, 2008		CP		A1		Korea Ratings		Current valuation
June 16, 2008		CP		A1		National Information on Credit Evaluation, Inc.		Current valuation
June 17, 2008		CP		A1		Korea Investors Service, Inc.		Current valuation

*

Rating definition: “A1” — Timely repayment capability is at the highest level with extremely low investment risk, and is stable in that there is no influence of any environmental change under reasonable expectation conditions.

(3)

International Credit Ratings

		Subject of		Credit rating of		Credit rating company
Date of credit rating		valuation		securities		(Credit rating range)		Evaluation type
July 9, 2007		Global Bonds		A		Fitch (England)		Current valuation
July 9, 2007		Global Bonds		A2		Moody’s (U.S.A.)		Current valuation
July 9, 2007		Global Bonds		A		S&P (U.S.A.)		Current valuation

III. FINANCIAL INFORMATION

1. Summary Financial Statements (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		September 30, 2008				2007				2006				2005				2004
Current assets			4,004,331				4,094,059				4,189,325				4,172,485				3,854,345
— Quick assets			3,990,497				4,075,378				4,172,887				4,166,500				3,843,384
— Inventory			13,833				18,681				16,438				5,985				10,961
Fixed assets			14,420,087				14,038,451				11,624,728				10,349,191				10,166,360
— Investments			6,007,296				5,940,045				3,547,942				2,366,760				2,112,488
— Tangible assets			4,465,324				4,594,413				4,418,112				4,595,884				4,605,253
— Intangible assets			2,936,022				3,174,942				3,405,158				3,386,547				3,448,619
— Other non-current assets			1,011,445				329,051				253,516				—				—
Total assets			18,424,417				18,132,510				15,814,053				14,521,676				14,020,705
Current liabilities			3,592,292				2,484,548				2,985,620				2,747,268				2,859,711
Fixed liabilities			4,105,849				4,221,016				3,522,006				3,516,528				4,033,902
Total liabilities			7,698,141				6,705,564				6,507,626				6,263,796				6,893,613
Capital			44,639				44,639				44,639				44,639				44,639
Capital surplus			2,863,854				2,923,921				2,962,699				2,966,198				2,983,166
Capital adjustment			(-)1,998,452				(-)2,041,578				(-)2,019,568				(-)2,022,817				(-)2,057,422
Accumulated comprehensive income			578,340				1,594,099				473,904				—				—
Retained earnings			9,237,896				8,905,865				7,844,753				7,269,861				6,156,708
Total capital			10,726,276				11,426,946				9,306,427				8,257,881				7,127,091
Sales			8,667,844				11,285,900				10,650,952				10,161,129				9,703,681
Operation income			1,591,058				2,171,543				2,584,370				2,653,570				2,359,581
Ordinary income			1,387,991				2,307,785				2,021,643				2,554,613				2,115,778
Current net income			1,014,535				1,642,451				1,446,598				1,871,380				1,494,852

IV. AUDITOR’S OPINION

1. Auditor

Nine months ended September 30, 2008		Year ended December 31, 2007		Year ended December 31, 2006		Year ended December 31, 2005
Deloitte Anjin LLC		Deloitte Anjin LLC		Deloitte Anjin LLC		Deloitte Anjin LLC

2. Audit Opinion

Term		Auditor’s opinion		Issues noted
Nine months ended September 30, 2008		Appropriate		—
Nine months ended September 30, 2008		Appropriate		—
Year ended December 31, 2007		Appropriate		—
Year ended December 31, 2006		Appropriate		—

3. Remuneration for Independent non-executive Auditors for the Past Three Fiscal Years

A. Audit Contracts

(Unit: in thousands of Won)

Term

Auditors

Contents

Fee

Total hours

Nine months ended September 30, 2008

Deloitte Anjin LLC

Semi-annual review Quarterly review Non-consolidated financial statements audit Consolidated financial statements audit

1,088,321

11,346

Year ended December 31, 2007

Deloitte Anjin LLC

Semi-annual review Quarterly review Non-consolidated financial statements audit Consolidated financial statements audit

1,066,318

11,468

Year ended December 31, 2006

Deloitte Anjin LLC

Semi-annual review Quarterly review Non-consolidated financial statements audit Consolidated financial statements audit

656,000

7,637

B. Non-Audit Services Contract with External Auditors

						(Unit: in thousands of Won)
Term		Contract date		Service provided		Service period		Fee
Nine months ended September 30, 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		R&D related consulting		7 days		9,400
Year ended December 31, 2007		March 20, 2007		Tax adjustment for fiscal year 2006		10 days		30,000
		September 28, 2007		Tax consulting for denial of deductions for corporate income tax		1 day		2,000
		September 28, 2007		Review of deferred corporate income tax for 1Q and 2Q		6 days		10,000
		September 28, 2007		Tax consulting		5 days		9,000
		December 31, 2007		Review of deferred corporate income tax for 3Q		2 days		5,000
		December 31, 2007		Tax consulting		3 days		3,000
Year ended December 31, 2006		January 1, 2006		Tax consulting service for fiscal year 2006		25 days		20,000
		February 7, 2006		Tax training for employees of authorized exclusive dealers		50 days		45,000
		March 31, 2006		Tax adjustment for fiscal year 2005		7 days		27,000
		April 30, 2006		Tax consulting		7 days		45,000
		July 26, 2006		Financial consulting		7 days		40,000
		October 13, 2006		Evaluation of and preparation of recommendations for improvement of subsidiarie’ financial system infrastructure		10 days		49,500
		November 13, 2006		Preparation of responses to the U.S. SEC’s comments on the Company’s Form 20-F for 2005		10 days		25,500

V. MANAGEMENT STRUCTURE

1. Summary of Management Structure

A. Board of Directors

(1) Authority of the Board of Directors

a)

Authority of the board of directors under Article 7 of the Regulations of the Board of Directors

	•		Convocation of shareholders’ meeting and submission of agenda
	•		Prior approval of financial statements
	•		Decisions on issuance of new shares
	•		Long-term borrowings, issuance of corporate bonds and redemptions
	•		Capital transfer of reserves
	•		Election of CEO and representatives
	•		Appointment of executive directors
	•		Establishment, transfer or closure of branches
	•		Enactment of and revision to the Regulations for the Board of Directors
	•		Annual business plan and budgeting
	•		Approval of investments of Won 50 billion or greater or investments that become Won 50 billion or greater through planned budget increases
	•		Planned budget increases and changes for investments or Won 50 billion or greater.
	•		Investments and joint ventures of Won 50 billion or greater. For new investments and joint ventures of Won 30 billion or above.
	•		Establishment of subsidiaries
	•		Guarantees of Won 50 billion or greater
	•		Transactions undertaken with related parties equal to or above the lesser of an amount equivalent to 10% of capital or Won 10 billion, and any material changes to such transactions in accordance with the Anti-trust Law and Fair Trade Act; provided, majority approval of outside directors is required. Prior approval of outside directors as required by Article 45-2 of the Articles of Incorporations is deemed to be obtained, if there is majority approval by outside directors.
	•		Investment by the Company or any of its subsidiaries in foreign corporations or entities, or other foreign assets, equal to or greater than the amount equivalent to 5% of the Company’s equity capital according to its latest balance sheet; provided, majority approval of outside directors is required. Prior approval of outside directors as required by Article 45-2 of the Articles of Incorporations is deemed to be obtained, if there is majority approval by outside directors.
	•		Enactment of and amendment to the Internal Trading Procedures
	•		Other matters considered necessary by the Board of Directors and those requiring Board of Directors’ approval under applicable laws

b)

Reporting items under Article 7.2 of the Regulations of the Board of Directors

•

The representative director must report the following to the Board of Directors within two months after the date of occurrence:

	•		Results for the six months ended June 30 of each year
	•		Execution of investments between Won 5 billion and Won 50 billion
	•		New investments and joint ventures under Won 50 billion
	•		Acquisition of non-operational fixed assets
	•		Disposition of fixed assets of Won 50 billion or above
	•		Matters related to guarantees of under Won 50 billion
	•		Internal trading not subject to approval by the Board of Directors
	•		Matters delegated to the representative director that the Board of Directors requires to be reported

(2) Publication of Information on Director Candidates Prior to the Shareholders’ Meeting for the Election of Directors and Shareholders’ Nomination

	a)		On February 22, 2008, in the notice of the annual general meeting of shareholders, information on Shin Bae Kim, Young Ho Park, Rak Yong Uhm, Jay Young Chung, Jae Ho Cho, candidates for the Board of Directors, was publicly disclosed.
	b)		There was no nomination by the shareholders.

(3) Significant Activities of the Board of Directors

Meeting		Date				Agenda		Approval
289th (the first meeting of 2008)		January 31, 2008				—   Financial Statements for 24th Fiscal Year		Approved as proposed
						—   Business Report for 24th Fisacl Year		Approved as proposed
						—   Establishment of Corporate for Convergence Business in USA		Approved as proposed
290th (the second meeting of 2008)		February 19, 2008				—   The Call for the 24th Annual General Meeting of Shareholders		Approved as proposed
						—   Issuance of Corporate Bond		Approved as proposed
291st (the third meeting of 2008)		March 14, 2008				—   Appointment of the Representative Director		Approved as proposed
						—   Appointment of Sub-Committee Members		Approved as proposed
292nd (the fourth meeting of 2008)		March 28, 2008				—   Establishment of “SK Marketing & Company” (provisional name)		Approved as proposed
						—   Amendment of internal regulations		Approved as proposed
						—   The Participation in the Capital Increase of Cyworld China (Holdings) Limited		Approved as proposed

Meeting		Date				Agenda		Approval
293rd (the fifth meeting of 2008)		May 30, 2008				—   Appointment of Independent Non-Executive Director Recommendation Committee Member		Approved as proposed
						—   Establishment of Corporate Citizenship Committee and Appointment of its Candidates		Amended and approved
						—   Contract with TU Media Co., Ltd. regarding satellite utilization fees		Approved as proposed
294th (the sixth meeting of 2008)		June 11, 2008				—   Dispose of SK C&C Co., Ltd Shares		Approved as proposed
295th (the seventh meeting of 2008)		July 18, 2008				—   Investment in a Beijing office building		Approved as proposed
						—   Investment in Beijing U-City business		Approved as proposed
						—   Interim Dividend		Approved as proposed
						—   Asset Management Transaction with Affiliated Company (SK Securities)		Approved as proposed
						—   Long-term Debt Financing		Approved as proposed
296rd (the eighth meeting of 2008)		August 21 2008				—   Transactions with SK Networks Co. Ltd. in 2008		Approved as proposed
						—   Investment for additional WCDMA Equipment and Marketing Activities for 2008		Approved as proposed
297th (the ninth meeting of 2008)		September 25 2008				—   Establishment of SK Telecom’s Affilate Company for Sales		Approved as proposed
						—   Asset Management Transaction with Affiliated Company (SK Securities)		Approved as proposed
						—   Issuance of Corporate Bonds		Approved as proposed
298th (the tenth meeting of 2008)		October 23 2008				—   Trasfer Melon Service and Participation of Capital Increase in LOEN Entertainment		Approved as proposed
						—   Acquistion of Treasury Stocks for Cancellation		Approved as proposed
						—   Long-term Financing Plan		Approved as proposed

(4) Committee Structure and Activities of the Board of Directors

a)

Independent Non-executive Director Nomination Committee

•

Organization

(As of September 30, 2008)

		Members
Number of Persons		Company Directors		Independent Non-executive Directors
4		Shin Bae Kim, Sung Min Ha		Rak Yong Uhm, Jae Ho Cho

•

Activities

D.S. Shim

H.J. Lim

(100%)*

(100%)*

Date

Details

Approval

Vote

Feb. 19 2008

—   24th General Meeting of Shareholders: Nomination of Independent Non-executive Director Candidates: Rak Yong Uhm, Jay Young Chung, Jae Ho Cho

Approved

For

For

R.Y. Uhm

J.H. Cho

(100%)*

(100%)*

Date

Details

Approval

Vote

July 18, 2008

—   Proposal to nominate the Head of Committee

Approved

For

For

b)

Compensation Review Committee

•

Organization

(As of September 30, 2008)

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

•

Activities

R.Y.

J.Y.

J.H.

Y.W. Kim

D.S. Shim

H.J. Lim

Uhm

Chung

Cho

(100%)

(100%)

(100%)

(100%)

(100%)

(100%)

Date

Details

Approval

Vote

Mar. 27, 2008

—   Appointment of Representative Director of the Committee

Approved

For

For

For

For

For

For

Apr. 25, 2008

—   Discussion of Committee operation methods

—

Resigned

—

—

—

—

—

c)

Capex Review Committee

•

Organization

(As of September 30, 2008)

		Members
Number of Persons		Company Directors		Independent Non-executive Directors
5 persons		Young Ho Park, Sung Min Ha		Rak Yong Uhm, Dal Sup Shim, Jay Young Chung

•

Activities

R.Y.

J.Y.

Uhm

D.S. Shim

Chung

(100%)

(100%)

(100%)

Date

Details

Approval

Vote

Apr. 26, 2008

—   Appointment of Representative Director of the Committee

Approved

For

For

For