SK Telecom Co., South Korea’s largest telecommunications company, said its net and operating profits for the third quarter took a hit from the debacle with the short-lived premium Samsung Electronics’ Galaxy Note7 smartphone.

SK Telecom announced on Thursday in a regulatory filing that its consolidated operating profit for the third quarter ended September 30 fell 13.52 percent to 424.3 billion won ($372.8 million) from the same period last year. The net profit dropped 15.63 percent to 322.1 billion won while sales slipped 0.4 percent to 4.2 trillion won from a year ago.

The fall in earnings is largely attributed to the decreased sales from PS&M, the mobile carrier’s retail unit, after Samsung Electronics recalled and suspended sales of the problematic Galaxy Note7.

The average revenue per user (ARPU) for the third quarter fell 0.8 percent to 35,471 won from the previous quarter as the portion of customers subscribed to a special call plan, which provides a discount on call and data charges instead of offering one-time subsidy per service contract, increased. In the second quarter, 35 percent of new subscribers signed up for the special call plan, choosing to receive a discount on call and data charges throughout the contract period, and the ARPU is expected to head down further as the number of the special call plan subscriber is on a rise.

The company faced challenges including sales drop due to Galaxy Note7 debacle but its e-commerce platform business SK Planet fared well, helping to sustain growth, said an unnamed SK Telecom official.

The number of users of the mobile navigation service “T-Map” that the mobile carrier provided free of charge to subscribers of other mobile carriers since July reached record-high of 9.18 million as of the end of September. The media platform unit SK Broadband saw its IPTV sales for the third quarter rise 35 percent on quarter while SK Planet’s online shopping mall “11th Street” has secured its leadership based on the number of unique visitors.

SK Telecom shares finished Thursday at 232,500 won, up 2,500 won or 1.09 percent from the previous period.

By Kim Dae-gi

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