S K T ELE Co MA Nnu AL REP O R T 2009

SK TELECOM ANNUAL REPORT 2009 +α At SK Telecom, our vision is to create value that transforms life. alpharising Our new “Alpharising” advertising slogan embodies the concept that intelligent when two different things come together, they create something of much greater value. Today, as we move beyond simply being Korea’s No. 1 mobile operator, we’re leveraging our information and communications technology know-how to expand into the business Connected of helping businesses enhance their productivity and profitability to drive our next stage of growth. transforming interactive

CONTENTS 01 productivity rising Wireless information and telecommunications technology has 10 Financial Highlights changed the way we live, work, and play forever. It began by giving us 12 Letter to Shareholders 16 Board of Directors the freedom to talk to anyone, anytime, anywhere. Today, it enables 18 Corporate Governance us to communicate and collaborate over the Internet with the same 20 2009 At a Glance business Overview freedom and ease. and tomorrow, we at sk telecom believe that it has 22 Mobile Network Operations the potential to empower companies around the globe to achieve 28 Convergence & Internet Services greater productivity and profitability as they create breakthrough 32 Global Management service 36 Subsidiaries products and services that will raise the quality of life for all. financial Review 40 MD&A 49 Financial Statements 60 CORPORATE Milestones 62 Global Network 63 Investor Information sustainability Management 66 Sustainability Management 67 Environmental PRESERVATION 68 Win-Win Partnerships 69 customer protection 70 community involvement 71 ethics management I.S.YANG While technologies and alternative T.S. Yook Senior Vice Senior Vice President, fuels are certainly a big part of the future, President, Car & Life Division IPE Strategy Division HYUNDAI-KIA consumers are increasingly expecting MOTORS more from their cars. They want intelligent SK Telecom safety, performance and conveniences, and thoughtful eco design, all of which are riding on the of automotive and information and communications technology. I look forward to seeing the virtually unlimited ways SK Telecom will help create new value with the “connected cars” of tomorrow. tell

Automotive

Car companies like Mercedes-Benz, BMW, and Toyota aren’t the only ones dreaming up ways to make driving safer, cozier, and greener. Today, IT* heavyweights like Google, Microsoft, and Intel are also working to introduce innovative services and technology to the industry. At SK Telecom, we’re leveraging our leadership in ICT* and extensive experience in vehicle navigation and mobile in-vehicle solutions as the basis for a host of next-generation services now under development. Through partnerships with global auto marquees like Hyundai, we aim to be one of the world’s top “connected car” service and technology providers.

* IT (Information Technology) * ICT (Information & Communications Technology) I.S.YANG While technologies and alternative T.S. Yook Senior Vice Senior Vice President, fuels are certainly a big part of the future, President, Car & Life Division IPE Strategy Division HYUNDAI-KIA consumers are increasingly expecting MOTORS more from their cars. They want intelligent SK Telecom safety, performance and conveniences, and thoughtful eco design, all of which are riding on the of automotive and information and communications technology. I look forward to seeing the virtually unlimited ways SK Telecom will help create new value with the “connected cars” of tomorrow. tell

Automotive

* IT (Information Technology) * ICT (Information & Communications Technology) Jeff Semenchuk Damian The world is becoming much more globally Yoonsuh Kim Managing Director, Head of Growth . This is also true in the financial Team Leader, Ventures Global IPE Team 1 Citigroup, Inc. world, where the customer experience is SK Telecom shifting from physical to . At Citigroup, we are all about transforming client experiences TO BUILD THE GLOBAL DIGITAL BANK FOR THEM. We are excited about our partnership with SK Telecom because we see SKT leading a very similar experience , not just in the area of mobile communication but also in digital and convergent technology.

Finance

While the traditional business paradigm has focused on the exchange of tangible value through direct face-to-face contact, advances in ICT* are now transforming it into the exchange of intangible value through a variety of channels, irrespective of time or place. Our m-payment and m-finance businesses have delivered a taste of this transformation from a customer experience perspective. And now we’re focusing on taking it to the next level with our new IPE* strategy, empowering financial institutions to meet and serve their customers anytime, anywhere with a variety of breakthrough solutions.

* ICT (Information & Communications Technology) * IPE (Industry Productivity Enhancement) Jeff Semenchuk Damian The world is becoming much more globally Yoonsuh Kim Managing Director, Head of Growth . This is also true in the financial Team Leader, Ventures Global IPE Team 1 Citigroup, Inc. world, where the customer experience is SK Telecom shifting from physical to . At Citigroup, we are all about transforming client experiences TO BUILD THE GLOBAL DIGITAL BANK FOR THEM. We are excited about our partnership with SK Telecom because we see SKT leading a very similar experience , not just in the area of mobile communication but also in digital and convergent technology.

Finance

* ICT (Information & Communications Technology) * IPE (Industry Productivity Enhancement) Jed Weissberg, J.H. Kah MD Healthcare Senior Vice Senior Vice President, President, Global IPE Division Quality and Care SK Telecom Delivery Excellence

Kaiser Permanente

The occurring in the healthcare industry are painful but inevitable. With growing attention to healthcare costs and the increase of chronic diseases, secure, reliable, and real-time processing Five p’s will turn today’s healthcare industry upside down: Prediction, Prevention, Personalization, Participation and of patient information is one of the key Partnership. “Connected Healthcare” is made possible only by tasks at hand. Institutions like ourselves focusing on customer needs and solving them with smart ICT*. Total Health Management which will emerge by such convergence are with different industries will not just benefit every entity in the ecosystem including to find ways to deliver the most effective, hospitals and patients but also will have far reaching effects even most results and services at to national competitiveness. the lowest possible cost. * ICT (Information & Communications Technology) Jed Weissberg, J.H. Kah MD Healthcare Senior Vice Senior Vice President, President, Global IPE Division Quality and Care SK Telecom Delivery Excellence

Kaiser Permanente

The occurring in the healthcare industry are painful but inevitable. With growing attention to healthcare costs and the increase of chronic diseases, secure, reliable, and real-time processing Five p’s will turn today’s healthcare industry upside down: Prediction, Prevention, Personalization, Participation and of patient information is one of the key Partnership. “Connected Healthcare” is made possible only by tasks at hand. Institutions like ourselves focusing on customer needs and solving them with smart ICT*. Total Health Management which will emerge by such convergence are with different industries will not just benefit every entity in the ecosystem including to find ways to deliver the most effective, hospitals and patients but also will have far reaching effects even most results and services at to national competitiveness. the lowest possible cost. * ICT (Information & Communications Technology) Ian Chang The emphasis of modern education is Don Jeong Kim Managing Director, Team Leader, COO increasingly on fostering problem-solving IPE Business Team 2 CHUNGDAHM SK Telecom Learning, Inc. skills through interactive learning methodologies. At Chungdahm Learning, we believe that our and SK Telecom’s will together lay the framework for a “ ” platform, creating an interactive educational environment that teaching methods to individual student needs. The future of education has never looked brighter. act

We’re seeing more and more attempts to integrate ICT* into educational services to satisfy rising demand for more convenient and effective education. By helping companies who have innovative teaching methods and content like Chungdahm Learning develop and deliver quality services that are personalized and interactive, we can satisfy the needs of the market and raise the productivity of the entire industry. I believe SK Telecom has a major role to Education play in facilitating the delivery of high-quality and affordable educational services, enabling partner companies to pursue opportunities in markets around the globe.

* ICT (Information & Communications Technology) Ian Chang The emphasis of modern education is Don Jeong Kim Managing Director, Team Leader, COO increasingly on fostering problem-solving IPE Business Team 2 CHUNGDAHM SK Telecom Learning, Inc. skills through interactive learning methodologies. At Chungdahm Learning, we believe that our and SK Telecom’s will together lay the framework for a “ ” platform, creating an interactive educational environment that teaching methods to individual student needs. The future of education has never looked brighter. act

* ICT (Information & Communications Technology) 2009 SKTelecomShareholders 2009 FINANCIALHIGHLIGHTS Financial Highlights Financial Ratios(%)

Balance Sheets Operating Results

Debt-to-equity ratio Net incomemargin EBITDA margin Shareholders’ equity T T Net income EBITDA Revenue otal liabilities otal assets Interest-bearing debt Cash &marketablesecurities (1)

(2) Debt-to-equityratio=Interest-bearing debt/Shareholders’ equity (1) EBITDA=Operatingincome+Depreciation +R&Drelated depreciation withintheR&Dexpense (2)

47.8% Shareholders Foreign 18.0% Shareholders Other Domestic 23.2% SK Holdings 11,241.5 19,297.6 12,101.2 4,530.2 8,056.2 1,288.3 4,209.4 968.8 2009 40.3 10.6 34.8

10,729.0 18,617.5 11,674.7 4,442.4 7,888.5 1,277.7 4,003.3 902.3 2008 41.4 10.9 34.3 0.6% Employees 10.4% shares Treasury

In billionsofKRW As ofDec.2009 11,426.9 18,132.5 11,285.9 2,876.2 6,705.6 1,388.8 1,642.5 4,023.8 2007 25.2 14.6 35.7

010 Financial Highlights

011 SK TELECOM ANNUAL REPORT 2009 2009 subscribers(inthousands) EbITDA (inbillionsofKRW) 20,000 21,000 22,000 23,000 24,000 3,800 3,900 4,000 4,100 4,200 4,209.4 24,270 2009 2009 4,003.3 23,032 2008 2008 4,023.8 21,968 2007 2007 As ofDec.2009 4,231.9 20,271 2006 2006 2009 revenue(inbillionsofKRW) Debt toEquityRatio (%) 12,101.2 40.3% 2009 2009 11,674.7 41.4% 2008 2008 11,285.9 25.2% 2007 2007 10,651.0 32.0% 2006 2006 10,000 10,500 11,000 11,500 12,000 10% 20% 30% 40% 50% As ofDec.2009 pursue new growth drivers services, and new mobileInternet continued toleadthemarket,develop In thischallengingenvironment, we SK T of themostchallengingyearstodate in marketplace inKorea made2009one competitive mobilecommunications financial crisisandanintensely The economicfalloutfrom theglobal Letter toShareholders subscribers. market share with24.3millionmobile revenue of enabled ustofinishtheyearwith record to saythattheresults oftheseefforts elecom’s quarter-century history. KR W 12.1 trillion . and a I am pleased 50.6%

012 Letter to Shareholders

013 SK TELECOM ANNUAL REPORT 2009 President andCEO Man Won Jung Letter to Shareholders

SK Telecom proactively responded to convergence and other marketplace changes in 2009. Our second focus will be on leveraging our ever-growing body of experience and expertise to continually discover and In a strategic deal we believe will be a watershed in our ambitions to lead tomorrow’s convergence marketplace, we acquired develop new opportunities for growth. In addition to ongoing initiatives in current growth fields, we will be actively executing a 49% equity stake in Hana Card. We also proactively solidified our presence in the fixed-mobile convergence marketplace by our new IPE strategy, leveraging our expertise in advanced sensing technologies—including RFID and near-field increasing our equity stake in SK Broadband to 50.6% and acquiring SK Networks’s leased line business. As we continued communications—and network technologies to help companies in distribution, finance, and other industries achieve to generate encouraging growth from newer businesses such as our T Store online application store and 11 Street online greater productivity and profitability. This strategy will expand our customer base beyond consumers to the enterprise mall, we also initiated a strategic expansion of our business portfolio, looking beyond the consumer marketplace to embrace market, transforming our communications-centric business portfolio into a comprehensive one encompassing all opportunities for growth in the enterprise market at home and abroad. Our new industry productivity enhancement (IPE) disciplines of information and communications technology, opening the door to new business opportunities in markets strategy aims to leverage our technical capabilities to create solutions that will enable enterprise customers across a broad worldwide. spectrum of industries to become more efficient and productive, ultimately generating new value and growth. Last, but certainly not least, we will instill a culture that fosters growth and overhauls our business infrastructure. We will be SK Telecom is delivering sustainable shareholder value with excellence. stepping up R&D to gain technical leadership in the enterprise space and assigning back office personnel to each individual We continued to focus on growing our businesses and delivering shareholder value in 2009. Despite challenging financial organizational unit to enhance our ability to execute. This will enable us to create a progressive corporate culture built on market and business conditions, we paid out a cash dividend of KRW 9,400 per share—including a KRW 1,000 interim a passion for entrepreneurship and excellence that is driven by a determination to rise above the rest and blaze a new path dividend. Going forward, we are committed to balancing investment in growth and shareholder returns as we strive to forward. maximize shareholder value. As we continue to pioneer new growth paradigms for the information and communications industry, we are putting in place

Meeting global standards for transparency and credibility in governance, accounting, and disclosure is a key component in L etter to S hareholders 2009 SK TELECOM ANNUAL REPORT a solid foundation for greater competitiveness and sustainable growth in 2010 and beyond. And as we do, we will never our commitment to building long-term shareholder value. Our efforts were recognized in 2009 with the Award of Excellence in stop striving to create and share greater value and satisfaction with our shareholders, customers, and communities.

Corporate Governance from the Korea Exchange’s Corporate Governance Service. We were also honored to be selected as 014 015 We hope you will join us as we take the next step in shaping the future of communications. a component of the Dow Jones Sustainability Indexes for a second straight year, putting us within the top 10% of the world’s largest 2,500 companies in terms of economic, environmental, and social performance.

SK Telecom is developing the competitiveness, opportunities, and culture for sustainable growth. In 2010, we will be building on our vision and experience to lay a firm foundation for long-term growth that will position us to Man Won Jung thrive in the years ahead. First and foremost, we will be sharpening competitiveness in our core businesses and expanding President and CEO our revenue base. We aim to secure leadership in our core fixed and wireless businesses by building an integrated marketing and operations organization that will maximize synergy with SK Broadband and other subsidiaries as we set our sights on becoming Korea’s top fixed-mobile service provider. Board of Directors B oard of D irectors 2009 SK TELECOM ANNUAL REPORT

01 02 03 04 05 06 07 08 016 017

01. 03. 05. 07. Jae Won Chey ki Haeng Cho Jay Young Chung dal Sup Shim

• Chairman of the Board, SK Telecom • President, GMS Business, SK Telecom • Honorary Professor, • Senior Visiting Research Fellow, • Position • Vice Chairman & CEO, SK Holdings • President and COO, SK Networks Graduate School of Business Administration, Institute for Global Economics • Vice Chairman & CEO, SK Gas • Senior Vice President and CFO, SK Energy SungKyunKwan University • Auditor, Korea Technology Investment Corp. • Other Principal • Vice Chairman & CEO, SK E&S • Vice President, Head of Corporate Management, • Head, Information & Management Research • Auditor, Korea Credit Guarantee Fund Directorship & • Executive Vice President, SK Corporation Consortium • Counselor for Finance & Economy, Positions Head of Corporate Center, SK Telecom • Chairman, Asia-Pacific Economics Association Korean Embassy in United States • Executive Vice President, • Professor, Graduate School of Business • Director General for Customs & Tariff, • Business Head of Strategic Support Division, SK Telecom 04. Administration, SungKyunKwan University Ministry of Finance & Economy Experience • Executive Director & General Manager, Jae Ho Cho • Chairman, The Korean-Japanese Economics & • Audit Officer, Korea Customs Service IMT2000 Business Committee, SK Telecom Management Association • Professor of Finance, • Vice-President, SungKyunKwan University College of Business Administration, • Independent Non-Executive Director, POSCO 08. 02. Seoul National University rak Yong Uhm man Won Jung • Director, Kyung Hee Foundation • Deputy Director, SNU Institute for Research in 06. • Independent Non-Executive Director, • President, CEO and Representative Director, Finance and Economics Hyun Chin Lim Tong Yang Insurance Co., Ltd. SK Telecom • Visiting Professor, Graduate School of Economics, • Visiting Professor, Graduate School of Public • CEO & President, SK Networks University of Tokyo • Dean, College of Social Sciences, Administration, Seoul National University • Vice President, Internet Business Divisional Group, • Managing Director, Seoul National University Seoul National University • Advisory Management Professor, SK Telecom Foundation • President, Korean Association of Political Sociology Korea Banking Institute • Vice President, Customer Business Development • Advisory Committee Member, • Adjunct Professor, Asian Pacific Studies Institute, • Vice Minister, Ministry of Finance and Economy Group, SK Corporation Samsung Securities Duke University • Non-Standing Director, KOTRA • Vice President, Integrated Network Business, • Securities Investigation Committee, • President, Korean Association of NGO Studies • President, Korea Development Bank SK Corporation Financial Supervisory Service • President, Korean Sociological Association • Commissioner, Korea Customs Service Corporate Governance T evaluate overallmanagementactivitiesandprovide strategicguidanceforfuture businessdevelopment. The Board haseightdirectors, fiveofwhomare independentandfrom outsidethecompany. Board members Review Committee,theompensationommitteeandorporateitizenshipommittee. within theBoard—the AuditCommittee,theIndependentDirector NominationCommittee,theapex o enhanceatransparent andefficientdecision-makingsystem,SKT environment-friendly management.Italsohelpsimprove corporatecapabilitiesforsustainable management. including: socialwelfare activities,ethicsmanagement,win-win partnershipswithbusinesspartnersand This committeepromotes supportforthecompany’s variousCorporateSocialResponsibility(CSR)activities CORPORATE CITIZENSHIPCOMMITTEE responsible forreviewing boththecriteriaandlevelsoftheircompensationpackages. This committeeoverseestheoverallcompensationplanfortop-level executivesanddirectors. Itis COMPENSATION revie w COMMITTEE required toperiodicallyexamineandmonitortheexecutionofcapexdecisionsthathavealready beenmade. This committeeisresponsible forreviewing thecapitalexpenditure budgetandanymajorrevisions. Itisalso CAPEX REVIEWCOMMITTEE Board. Italsohelpstopromoteandtransparency fairness inthenominationofcandidates. This committeeismandatedtoprovide alistofcandidatesforindependentdirectors forconsiderationbythe INDEPENDENT DIRECTORnomination COMMITTEE through checksandbalances. evaluating theindependentauditors’reports. Italsosupportsmanagementinmaximizingcompanyvalue This committeeisresponsible forappointingindependentauditors,definingthescopeoftheirservicesand AUDIT COMMITTEE elecom hasestablishedfivecommittees

018 Corporate Governance

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01 w B usiness O vervie 2009 SK TELECOM ANNUAL REPORT 022 023

At SK Telecom, we are the leading force in the evolution of Korea’s wireless telecommunications industry. Despite a competitive market environment and economic uncertainty, our powerful brand communications, outstanding network quality, and ability to deliver unique user experiences enabled us to solidly maintain our market leadership in 2009 with a 50.6% market share as we set a new revenue record of KRW 12.10 trillion. Our network fundamentals are strong and growing stronger as we continue to optimize network quality and strategically allocate resources as existing and new subscribers migrate to our WCDMA network. Sales and Marketing

Leading the industry in performance Improving the customer experience Setting the Internet free We have also been increasing roaming service quality and customer As convergence-driven consolidation was reshaping the korean We are achieving innovations in subscriber value and retention as well Rapid growth in Korea’s smartphone and fixed-mobile convergence value through key strategic alliances. In February 2007, we enhanced telecommunications industry landscape in 2009, we continued to lead as enhancing cost efficiencies by embracing the customer-centric marketplaces is quickly bringing wireless internet usage into the our competitive position in 3G global roaming services by joining the the mobile communications segment in every metric of performance. We mindset and processes of the customer experience management mainstream. As part of our strategy of openness, expansion, and co- Bridge Mobile Alliance, Asia Pacific’s leading mobile alliance. Spanning did this by delivering products that meet customer needs, expanding paradigm. In 2009, we put in place a new marketing channel that will prosperity, we aim to lead this reshaping of the telecommunications 11 major territories with more than 200 million subscribers, the alliance subscriber loyalty programs, and improving our ability to attract quality enhance our competitiveness over the long haul with the establishment industry by progressively adopting advances in technology that will has partnerships with 11 leading mobile operators, including SingTel customers as we grew our subscriber base and laid the foundation for of sales subsidiary Power Sales & Marketing (PS&M) to strengthen and make the wireless Internet more accessible, affordable, and easier to (Singapore), Maxis (Malaysia), Bharti Airtel (India), CSL (Hong Kong), long-term subscriber retention. complement existing sales channels. use. In addition to actively promoting and supporting Android and other Telkomsel (Indonesia), and others. As of the end of 2009, our CDMA, WCDMA, and WiBro networks smartphone platforms with a variety of attractive rate plans, we will be We continued to enhance the customer experience in 2009 in served nearly 24.3 million customers, representing just over 50.6% of Converging on fixed-mobile leadership working to support and create a mass market opportunity for application numerous ways, including the launch of our local time notification Korea’s mobile communications market. In addition to posting record With fixed-mobile industry convergence now a reality in Korea, we are and content developers through our T Store application store. service. In 2008, we launched automatic dial roaming, which allows revenues of KRW 12.10 trillion and a record operating profit of just aiming to emerge at the forefront of these newly integrated markets in customers to call home when traveling overseas without dialing under KRW 2.18 trillion, we also marked our 12th straight year at the 2011 with highly competitive products and services such as our T Band Expanding Global Coverage international access numbers or country codes. We have also improved top of both the National Customer Satisfaction Index (NCSI) and Korean fixed-mobile bundle with SK Broadband and new T Zone fixed-mobile We offer a wide variety of global roaming services, including CDMA our services for a more convenient and safe roaming experience by Customer Satisfaction Index (KCSI). substitution service. In addition to aggressively pursuing revenue growth, automatic roaming, WCDMA automatic roaming, GSM automatic and streamlining and reducing international SMS rates as well as improving we will be working to deliver unique and superior customer experiences rental roaming, and Internet roaming. As of 2009, we provided CDMA the tariff system for wireless Internet usage. as we continue to build a marketing platform tailored for today’s automatic roaming in 21 countries, wcdMA automatic roaming in technology driven marketplace that positions us for long-term growth. 72 countries, and GSM automatic and rental roaming service in 181 countries. Going forward, we will continue to expand our global roaming service coverage and various additional services, such as prepaid

w B usiness O vervie 2009 SK TELECOM ANNUAL REPORT roaming, as we broaden our user base. 024 025

Market Share 24.3million 50.6% subscribers

at sk telecom, We continued to exploit our leadership in mobile communications and opportunities for synergy with fixed communications subsidiaries SK Broadband and SK Telink as we laid a foundation for dynamic growth in the years ahead. Network Management Enterprise Solutions

Growing our portfolio Building a foundation for growth Growing through productivity empowering business growth Over the years, we have built a reputation for being on the leading edge In addition to progressively improving our cost structure by upgrading Consistent excellence in service, distribution channels, and network We continue to push the boundaries of information and communications of mobile technology and services. In 1996, we launched the world’s first our engineering capabilities, phasing out our 2G network, and expanding quality are why we are Korea’s leading wireless operator. In 2009, we technology to deliver greater value and productivity to our enterprise commercial CDMA network. A decade later in 2006, we launched the our WCDMA network capacity, we continue to enhance our technical began an aggressive expansion into the enterprise mobility services customers. We are now in the process of rolling out a number of new world’s first commercial HSDPA network. Today, we continue to invest in capabilities in network engineering, cloud computing, and other marketplace as we took the next step toward becoming a total solutions and services spanning all ICT disciplines at home and abroad the future with the most advanced technologies available. promising growth fields. We are also leveraging our overseas consulting enterprise solution provider, offering businesses unified communications as we focus on building a balanced business portfolio that is capable In addition to ongoing upgrades to enhance WCDMA network experience with Kulacom of Jordan, R-Com of India, and CT Consulting solutions that solve real-world problems and enhance productivity. of meeting the specific needs of each target customer, industry, and capacity and quality, we now offer WiBro service in 84 cities nationwide. of China to extend our technical leadership in the managed services market. Our top priority is to deliver the best possible wireless data services field. Collaborating to enter new markets One of our highest-profile projects to date has been the design and and an open Internet environment by expanding our WCDMA frequency Our core ICT capabilities combined with innovative ideas on how to drive implementation of a 13,000-employee sales force automation solution capacity, building a Wi-Fi network, and bringing other fixed-mobile Looking ahead to the future enterprise productivity are now opening new opportunities for growth for food and beverage maker Korea Yakult. Other major users of our convergence network solutions to market. Tomorrow’s 4G network technologies and the enterprise productivity in the corporate and government sectors. Focusing on the distribution, sales force automation solutions include logistics providers CJ GLS solutions they enable will be the key drivers in our strategy for global logistics, finance, education, healthcare, auto manufacturing, housing and Korea Express as well as life insurer Samsung Life. We also have Focusing on quality technical leadership in the emerging fixed-mobile convergence and construction, and small and medium business fields, our IPE division provided mobile office solutions based on the BlackBerry smartphone Ensuring our customers receive quality, secure, uninterrupted service is marketplace. Our network roadmap targets dramatic improvements in both is tasked with analyzing and designing unique, integrated solutions to platform to steelmaker Posco and Korean Air as well as one based on another top priority. Our WCDMA network call quality now matches our speed and capacity through the upgrade of our WCMDA network to HSPA+, the challenges businesses face. Today, we continue to progressively the Windows Mobile smartphone platform to the Korea Meteorological CDMA network. We also continue to enhance the customer experience greater WiBro network utilization, and deployment of a Wi-Fi network. We expand our organization and upgrade all aspects of our sales network Administration. by improving service in fringe reception areas as well as upgrading the continue to prepare for the transition to 4G networks by developing core to improve our competitiveness and build momentum in the enterprise quality of our fixed network and enterprise services. These efforts have technologies in the smart antenna and multi-band utilization fields as mobility marketplace. earned us the Korea Communications Commission’s highest network we leverage our existing networks and technical capabilities to deliver

quality rating and helped us consistently top the mobile communications solutions and services that better serve the needs of our customers. w B usiness O vervie 2009 SK TELECOM ANNUAL REPORT category in major Korean customer satisfaction surveys for more than a decade. 026 027

Healthcare Automotive

Retail Finance Construction

Small and Medium Distribution Education Enterprise

our pioneering adoption of the most advanced mobile In 2009, we set up the Industry Productivity Enhancement telecommunications technologies over the past (IPE) business division to generate greater value and quarter-century has made us a world-class multi- growth for both us and our customers and partners network operator. Here, our proven ability to balance around the globe. Our goal is to emerge as a leading and seamlessly integrate our unique portfolio of global enterprise solution provider by bringing CDMA, WCDMA, and WiBro networks gives us a crucial together “smart” sensing technologies and advanced competitive advantage as we aim to take the lead in networking technologies to create solutions that shaping Korea’s fixed-mobile convergence marketplace. enable companies and government agencies to become more productive and profitable in their missions. 02 w B usiness O vervie 2009 SK TELECOM ANNUAL REPORT 028 029

At SK Telecom, we are on the cutting edge of information and communications technology. Embracing open innovation and strategic collaboration, we are striving to create a symbiotic ecosystem that will keep us and our partners growing as we conceive, develop, and deliver the convergence services that will enhance quality of life as they transform the way the world lives, works, and plays. A World of Possibilities

Shopping and Banking on the Move Unlocking the power of the mobile Internet Transcending borders with technology Shaping the technology of convergence In September 2009, we jumped into Korea’s nascent application We saw a steady rise in wireless Internet users and usage as web- In the realm of information and communications technology, there We are now actively involved in a number of high-tech fields we store business with the launch of our T Store online application savvy smartphones began to reach the Korean market in force in are no borders. We are constantly on the lookout for new growth believe will be key to delivering the convergence services of the marketplace. This operator- and device-agnostic store wrapped 2009. We responded to this accelerating trend by upgrading our opportunities in major markets around the globe. We entered the future. innovative user interface technologies such as e-paper up 2009 with over 29,000 content items available for download, support for a growing range of practical information services such Chinese telematics market in late 2007 with the acquisition of and speech recognition are a prime example of this. to date, delivering more than 1.5 million downloads to over 340,000 as bus arrivals and weather forecasts as well as emergency public GPS solutions provider and equipment maker Shenzhen E-Eye we have applied for four international patents related to e-paper customers in just under four months of operation. service information dissemination via mass SMS broadcast. We High Tech. In 2009, we partnered with E-Eye and SK M&C to set particles and their manufacturing methods. Speech recognition is a A mere two years after its launch, our 11 Street online marketplace also spurred the creation of local business models by supporting up JoyNav, a real-time traffic information provider that rolled out powerful tool to enhance mobile phone usability, enabling advanced has emerged as a major Korean e-commerce player thanks to location-based dining and entertainment information as well as service in Beijing, Shanghai, and Shenzhen during the year. We features such as voice menu navigation, voice dialing, voice-to-text a focus on total customer satisfaction backed by a 110% low- launching the Mobile Outlet site to help online and offline retailers are currently working with E-Eye on “E-MIV”, a smartphone-based messaging, and voice search of the Internet, music libraries, and price guarantee, 110% genuine product guarantee, 30-day quality turn inventories into cash. vehicle telematics service that is scheduled for national rollout in local information. guarantee, free shipping for returns and exchanges, and a seller With strong consumer interest in smartphones going into 2010, China in 2010. We continue to explore new opportunities for growth In the mobile telematics space, our industry standard Telematics qualification program. Ranked No. 1 in its category on the Korean we will be stepping up these and other efforts to create a symbiotic in China, developing and securing emerging technologies as we API for Java ME is enabling us to create breakthrough mobile in- Customer Satisfaction Index (KCSI) for a second straight year in ecosystem that will enable both our Nate wireless portal and the acquire convergence industry insights that will enable us to identify vehicle telematics solutions that combine vehicle diagnostics and 2009, 11 Street finished the year with a transaction volume of KRW open Internet to co-exist and thrive, positioning us to take the lead and bring of new growth opportunities to market. control, safety and security features, route guidance based on 1.6 trillion and more than 10.3 million registered customers. in driving wireless Internet growth in Korea in the years ahead. Mobile banking is another strategic global market opportunity for real-time traffic information, and audio-visual entertainment, all We are actively partnering with financial institutions to develop us. In March 2008, our US-based Mobile Money Ventures (MMV), a controllable from the phone you already carry in your pocket. new platform-agnostic mobile payment services to meet the needs joint venture with Citigroup, launched and continued to progressively Last but not least, we are helping bring power networks into of the burgeoning smartphone segment. in January 2009, we roll out its next-generation mobile financial services solution around the Internet age by creating smart grid solutions that provide both

launched our 3G USIM-based T Cash transportation and pre-paid w B usiness O vervie 2009 SK TELECOM ANNUAL REPORT the globe, adding the United States to the list in March 2009. Today, utilities and consumers with valuable real-time information that will card service, attracting over 740,000 subscribers in the first year millions of consumers across North America and Asia are benefiting help optimize efficiency and encourage conservation at every step of operation. We closed the year with Board approval to acquire a from the freedom and flexibility of the industry’s most-advanced on- of the energy generation, distribution, and consumption chain. 030 031 49% stake in credit card issuer Hana Card, paving the way for us the-go banking services. to create compelling services and applications that will empower consumers in new ways, delivering value that the plastic cards in their wallets cannot match.

In 2009, our wireless Internet services generated KRW 2.66 trillion of revenue as we continued to successfully leverage our industry-leading ICT capabilities to drive innovation and growth in e-commerce and other emerging high-tech online fields. We are now creating entirely new business models that will expand our business portfolio and global market presence, ultimately ensuring our continued growth in the years ahead. 03 w B usiness O vervie 2009 SK TELECOM ANNUAL REPORT 032 033

At SK Telecom, we aspire to be a global leader in each of our business fields as we pursue sustainable growth. Guided by principles embodied in the SK Management System, we are creating a new paradigm for innovation that will keep our mobile network operations growing as we target new opportunities for growth in fields such as enterprise productivity and convergence around the globe. A Foundation for Growth

Balancing Growth and Stability Laying a foundation for global growth Growing through innovations in HR Our enterprise information systems also play a key role in helping GMS plays a crucial role in our quest for sustainable growth by We are now putting in place a broad support platform for sustainable Building an HR system capable of supporting tomorrow’s us maintain our competitive edge. We are continually investing in balancing the competing demands of growth and stability from an growth that leverages our industry leading ICT capabilities to create growth businesses is one of our key ongoing tasks. We are now information systems to improve competitiveness in both core and enterprise perspective. In addition to supporting the CEO, the unit is an ecosystem of solutions that gives our enterprise customers greater accelerating the pace of transformation by reassigning personnel emerging businesses. In addition to rolling out a fixed-mobile IT tasked with empowering each business unit to maximize operating opportunities to enhance productivity and efficiency. GMS takes the to new businesses and assigning back-office staff to each platform to support new products and services, we are now laying efficiency as well as facilitating inter-company collaboration. lead in this strategic business development, implementing a global organizational unit as we continue to optimize our overall resource the groundwork for future growth businesses as well as expanding GMS oversees our overall business activities to improve resource business infrastructure, fostering organizational specialization to allocation. We are also adopting specialization-focused career our IT infrastructure in support of our affiliates, investee companies, utilization, maintain a sound business portfolio, and ultimately tap global markets, and sharpening the capabilities of our global planning, internal recruiting, skill- and performance-based evaluation and overseas operations. ensure we secure a sustainable competitive advantage. The unit workforce. and compensation, and ICT-enabled HR development as we aim maximizes our overall execution capabilities through comprehensive to elevate unit and corporate competitiveness to new heights by Creating value beyond the bottom line planning and performance monitoring, allocating resources to lay Creating a strong, capable culture enhancing the capabilities of every member of our team. Proactive investor, public, and government relations activities are the foundation for growth as it strategically funds innovations in In 2009, we focused on fostering a culture of growth by emphasizing essential to effectively conveying brand value in today’s rapidly enterprise productivity and other promising new growth fields. It also the concepts of servant leadership and dynamic followership built Providing services that spur efficiency changing market environment. Our stellar reputation in corporate encourages employee involvement in business innovation through on open communication. In 2010, we aim to create an even stronger, High-tech businesses require a strong portfolio of supporting social responsibility also continues to burnish the SK Telecom brand. an ideas incubation program, tapping the creativity of the people more cohesive corporate culture defined by its agile and strong services in today’s competitive global marketplace. Our legal unit In 2009, our CSR strategy was the subject of a Harvard Business who know our businesses best. organization, dynamic leadership, challenging spirit, and sense of enhances our ability to effectively deal with issues and disputes School case study, a first in the field for a Korean firm. Today, we Securing a solid financial structure and the capital to support ownership of its members. through proactive risk management, providing legal services that continue to win stakeholder hearts and minds as we expand our ongoing growth requires a sound financial strategy and strong enhance competitiveness. it also supports our overall growth social commitment, champion pro bono services, and leverage our execution. As we maintain our sovereign-level credit rating with strategy by providing active legal support to our global operations ICT background to help make the world a better place.

Moody’s, Standard & Poor’s, and Fitch, and complete the necessary w B usiness O vervie 2009 SK TELECOM ANNUAL REPORT and new businesses as well as strengthening our intellectual upgrades to our accounting processes to support our expanding property right competitiveness. In 2009, the unit was instrumental B2B business portfolio in 2010, GMS is now pushing ahead with in helping us successfully join several patent pools related to 3G 034 035 the implementation of new standards, processes, and systems communications technologies, including two related to CDMA2000 in preparation for adoption of International Financial Reporting and one to WCDMA. Standards (IFRS) beginning with the 2011 fiscal year. Growth

Risk Management evenue R People W 12.1 trillion

Culture 2009 KR

Relations

The Global Management Service unit is tasked with the mission of bolstering our fundamental competitiveness while balancing growth and stability. Its areas of responsibility include strategic planning, accounting, business development, government relations, investor relations, public relations, legal services, human resources, and ethical oversight. SUBSIDIARIES

Connecting with Synergy

At SK Telecom, we and our subsidiaries are creating and delivering the advanced services and technologies that are shaping the mobile lifestyle. Today, we are pooling our resources to achieve our vision of being a global information and communications technology leader. And as we continue to develop and bring to market innovative services that are a step ahead of their time in the coming years, our world will continue to grow.

SK Communications SK Broadband SK Telink TU Media skcommunications.com skbroadband.com sktelink.com tu4u.com

Established back in 2002 as an online services portal, SK Communications Established as Hanaro telecom in 1997, fixed-line and broadband Founded in 1998, SK Telink provides a unique and growing portfolio of Established in 2003, TU Media launched the world’s first commercial

today manages a diverse portfolio of online entertainment, information, provider SK Broadband became a member of the SK Group in March SUBSIDIARIES 2009 SK TELECOM ANNUAL REPORT consumer and business services that includes international and long- satellite-based mobile TV (S-DMB) service in May 2005 via a purpose- and social networking services including Nate.com, Cyworld, and NateOn. 2008. Backed by a marketing campaign that invites consumers to “see distance telephony, VoIP telephony, corporate telephony, and local value- built satellite known as MBSat. Today, over 2 million Koreans enjoy TU’s the unseen”, the company is now on a mission to create a portfolio of added telephony services. nationwide coverage with 36 channels of quality programming spanning Mastering the online world revolutionary, customer-centric convergence services, leveraging its 036 037 the full spectrum from entertainment to education and news via a growing In 2009, the company substantially grew its search traffic by merging synergy with SK Telecom to push the boundaries of fixed-mobile and Connecting with value range of devices that includes mobile phones, portable media players, Cyworld into Nate.com, launching the personal aggregation service Nate broadcast convergence. In the consumer space, SK Telink’s 00700 international phone service and vehicle navigation systems. Connect, and adding semantic search capabilities. Cyworld, Korea’s has emerged as a leading player in the market with quality service unrivaled social networking service with over 24 million members, Serving up satisfaction at affordable prices, ranking No. 1 in its category in Korea’s National Broadcasting enjoyment and value launched an application store at the end of September. NateOn, the Now in its second year as an sk company, sk Broadband’s early Customer Satisfaction Index survey four years running since 2006. Over the past four years, TU Media has continued to expand and upgrade nation’s premier instant messaging service since 2005, continued to focus on improving customer service has paid off. Today the company its channel lineup and programming packages. Currently broadcasting 22 emerge as a formidable integrated communications platform in its own is strengthening customer touchpoint interactions and customer The company has also earned a reputation for delivering state-of-the- video, 1 data, and 13 audio channels, TU’s innovative offerings include right, closing the year with over 30 million users. communications as it aims to deliver unique services that will revolutionize art integrated telecommunications services to major financial institutions, TUBox, a pay-per-view movie channel that airs features immediately the industry value paradigm. government agencies, and businesses of all sizes since entering the after their theatrical release, and TU Ride On, a special package for Shaping tomorrow’s online experience enterprise space with corporate VoIP and 1599 national prefix services vehicle-based navigation systems that adds value with real-time traffic In the coming year, SK Communications will continue its quest to create Bundling value in 2005. Over the past couple years, it has strategically expanded its information. Korea’s top online services by improving and evolving its semantic The company provides broadband Internet services at variety of speeds corporate services portfolio by launching e-learning and language skill search service, upgrading news, mail, and other basic portal services, and price points via fiber optic, coaxial cable, and hybrid fiber-coaxial assessment solutions, including the University of Cambridge’s Business Today, TU continues to explore and bring to market new convergence and enhancing the capabilities of Nate Connect and other strategic networks. In addition to broadband and phone services, the company Language Testing Service. services that will leverage the synergy of mobile communications and fixed-mobile convergence services. Aiming to deliver a compelling user offers a variety of competitively priced packages featuring Internet, VoIP, broadcasting to make life on-the-go more enjoyable and rewarding. experience on mobile devices as well as the desktop, the company and IPTV services, with additional savings for customers who are also SK Today, SK Telink continues to leverage its experience in international continues to develop its application store and other service innovations Telecom mobile subscribers. Launched in January 2009, the company’s and VoIP telephony as it prepares to deliver the next generation of fixed- that will make Cyworld even more inclusive and indispensible. “B tv” IPTV service also got off to a strong start, attracting over 400,000 mobile convergence services that will help consumers and businesses subscribers in its first year with live streaming of some 60 TV channels. stay connected anywhere, anytime.

Connecting businesses with success With the acquisition of sk networks’s voIP business in 2009, sk Broadband’s nascent corporate telephony business is now making rapid inroads in the enterprise convergence marketplace. Today, the company offers a growing portfolio of advanced managed services tailored to the specific needs of each enterprise customer. The company made its mark in the fixed-mobile convergence space in 2009 by launching business- specific bundled products that offer small and medium-sized businesses major discounts on bundled broadband, VoIP, and SK Telecom mobile services. 04 F i NAN cial R evie w 2009 SK TELECOM ANNUAL REPORT 038 039

We are Korea’s leading wireless telecommunications services provider and a pioneer in the commercial development and implementation of high-speed wireless Internet and convergence services. We had approximately 24.3 million subscribers throughout Korea as of December 31, 2009. In addition, our share of the Korean wireless market as of December 31, 2009 was approximately 50.6%, based on the number of subscribers. Management’s Discussion & Analysis 2. EXECUTIVE SUMMARY

We earn revenues principally from our cellular service sales consisting of the following: Management’s Discussion & Analysis (MD&A) is provided to enable readers to assess our results of operations and financial condition for the fiscal year ended December 31, 2009, compared to the preceding year. This MD&A section should be read in conjunction with our audited non-consolidated • sign-up fees, which are initial subscription fees for our cellular services; financial statements included in this annual report. All amounts are in Korean Won (KRW) unless otherwise specified, and are based on our audited • monthly fees, which are monthly basic charges to customers based on particular service plans; non-consolidated financial statements prepared in accordance with Korean generally accepted accounting principles (Korean GAAP). • call charges, which are usage charges for outgoing voice calls; • value-added and other service fees paid by subscribers to our wireless services; and This MD&A section contains “forward-looking statements”, as defined in the U.S. Securities Exchange Act of 1934, that are based on our current • wireless Internet (WI) sales, consisting of usage charges for wireless data services and short message service (SMS), expectations, assumptions, estimates and projections about our company and our industry. The forward-looking statements are subject to various which is also known as “phone mail” service. risks and uncertainties. We caution you that reliance on any forward-looking statement involves risks and uncertainties, and that although we believe that the assumptions on which our forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and, We also derive revenue from interconnection fees paid to us by other fixed-line and wireless telecommunications providers for use of our network by as a result, the forward-looking statements based on those assumptions could be incorrect. Risks and uncertainties associated with our business are their customers and subscribers. more fully described in our latest annual report on Form 20-F and other filings with the U.S. Securities and Exchange Commission. In light of these and other uncertainties, you should not conclude that we will necessarily achieve any plans and objectives or projected financial results referred to in any of The following selected non-consolidated financial information has been derived from, and should be read in conjunction with, the audited non- the forward-looking statements. We do not undertake to release the results of any revisions of these forward-looking statements to reflect future events consolidated financial statements included in this annual report. or circumstances.

Selected Financial Information (Non-consolidated basis) 1. 2009 OVERVIEW

2009 is marked by maintaining our leadership position in the wireless business by strengthening our subscriber base while enhancing our in billions of KRW in billions of KRW competitiveness in new convergence and Internet businesses such as T Store, an online marketplace for mobile applications, and 11 Street, an 2009 2008 Change online shopping mall that links wired and wireless shopping services, in our efforts to create new growth engines for us. Leveraging our technological Income Statements leadership, we expanded our services to corporate clients in addition to our individual subscribers and continued to build the groundwork for global Revenue 12,101.2 11,674.7 3.7% business opportunities. EBITDA (1) 4,209.4 4,003.3 5.1% Operating income 2,179.3 2,059.9 5.8% Net income 1,288.3 1,277.7 0.8% Wireless and Fixed-line Businesses Balance Sheets We strengthened our leadership position in the wireless business in 2009. Our share of the Korean wireless market based on the number of subscribers Total assets 19,297.6 18,617.5 3.7% increased slightly to approximately 50.6% as of December 31, 2009, compared with 50.5% as of December 31, 2008. At the end of 2009, we reached (2) a subscriber number of 24.3 million, which we believe evidences further solidification of our market leadership. We strengthened our market leadership Cash & marketable securities 968.8 902.3 7.8% in the wireless business by improving our network quality, streamlining our marketing network and focusing on customer benefits. We continued to FINANCIAL REVIEW 2009 SK TELECOM ANNUAL REPORT Total liabilities 8,056.2 7,888.5 2.1% expand our wireless Internet business in 2009 through our enhanced wireless / fixed-line integrated services, utilizing the increased popularity of smart Interest-bearing financial debt (3) 4,530.2 4,442.4 2.0% phones and our diverse wireless data plans including the introduction of package plans combining voice and data. Shareholders’ equity 11,241.5 10,729.0 4.8% 040 041 Financial Ratios (%) In addition, we strengthened our cooperation with SK Broadband to maximize customer convenience and benefits by developing new services and EBITDA margin 34.8 34.3 0.5%p products, such as integrated services combining mobile phone, fixed-line phone, broadband Internet, VoIP and IP-TV services in various combinations. Operating margin 18.0 17.6 0.4%p Going forward, we and SK Broadband will do our best to secure synergy and growth momentum for both sides. We also expect our acquisition of SK Net income margin 10.6 10.9 -0.3%p Networks’ leased-line business in September 2009 to strengthen our competitiveness in both wireless and fixed-line services. Debt-to-equity ratio (4) 40.3 41.4 -1.1%p

(1) EBITDA = Operating income + Depreciation + R&D related depreciation within the R&D expense Convergence Business (2) Cash & marketable securities = Cash & cash equivalent + marketable securities + short-term financial instruments We believe growing convergence among the telecommunications sector and other industries creates growth opportunities for us given our existing (3) Interest-bearing financial debt = Short-term borrowings + Current portion of long-term debt (excluding current portion of long-term debt related to payment of WCDMA license fee) + Bonds industry-specific technology and know-how, which will provide a competitive advantage in offering integrated services. In order to actively respond to payable & long-term borrowings the accelerating trend of convergence among different technologies and industries, we continued to strengthen the convergence, Internet and content (4) Debt-to-equity ratio = Interest-bearing financial debt/Shareholders’ equity business sector, including the opening of T Store in September 2009 and the growth of 11 Street into a major e-commerce marketplace. In December 2009, our Board approved the acquisition of 49% stake in Hana Card, which will create compelling services and applications that will deliver new convergent services between telecom and finance. We will continue to identify and foster new convergence businesses to create new growth engines Our revenue grew by 3.7% to KRW 12.10 trillion in 2009 from KRW 11.67 trillion in 2008, primarily as a result of a 4.0% increase in our cellular services for SK Telecom in the future. revenue to KRW 10.88 trillion in 2009 from KRW 10.46 trillion in 2008. The increase in our cellular services revenue was due principally to an increase in monthly fees driven by increased subscription to our service plans with higher monthly basic charges and a 5.0% increase in our average subscriber As part of our growth strategy, we have selectively sought attractive opportunities abroad. We are actively seeking various opportunities to grow base in 2009 over 2008, as well as an increase in wireless Internet sales. Increases in value-added and other service fees and sign-up fees also convergence businesses globally by developing new business models. The expansion of our telematics business in China is a good example of new contributed to the increase in our cellular services revenue, while a decline in call charges partially offset these increases. convergence business models that we are pursuing. Our operating expenses in 2009 increased by 3.2% to KRW 9.92 trillion in 2009 from KRW 9.61 trillion in 2008, due primarily to an increase in our marketing expenses, which consist of marketing-related commissions paid and advertising expenses, as well as increases in depreciation and amortization expenses. As the growth of our revenue outpaced the increase in our operating expenses in 2009, our operating income increased by 5.8% to KRW 2.18 trillion in 2009 from KRW 2.06 trillion in 2008 and our operating margin increased 0.4%p to 18.0% in 2009 and EBITDA margin increased 0.5%p to 34.8% in 2009. Our net income increased 0.8% to KRW 1.29 trillion in 2009 from KRW 1.28 trillion in 2008. Our total assets increased 3.7% to KRW 19.30 trillion as of December 31, 2009 compared to KRW 18.62 trillion as of December 31, 2008, due mainly Our revenue from value-added and other services increased 14.4% to KRW 393.8 billion in 2009 from KRW 344.3 billion in 2008. This increase was to an increase in accounts receivable resulting from an increase in sales of handsets on installment payment plans, an increase in property and attributable, among others, to an increase in revenue from our leased line business resulting from our acquisition of SK Networks’ leased line business equipment resulting from our acquisition of SK Networks’ leased line business, an increase in the value of our investment in POSCO and our additional on September 30, 2009. investment in SK Broadband, partially offset by the sale of our investment securities, including shares of China Unicom and SK C&C. Total liabilities increased 2.1% to KRW 8.06 trillion as of December 31, 2009 from KRW 7.89 trillion as of December 31, 2008, primarily resulting from a 12.3% Our revenue from sign-up fees increased 0.9% to KRW 403.8 billion in 2009 from KRW 400.2 billion in 2008 primarily as a result of a 3.9% increase in increase in bonds payable and long-term borrowings to KRW 4.17 trillion as of December 31, 2009 from KRW 3.71 trillion as of December 31, 2008. new subscribers to approximately 8.8 million in 2009 compared to 8.5 million in 2008. The proceeds of the bonds payable and long-term borrowings were used, among others, in acquiring SK Networks’ leased line business, participating in SK Broadband’s capital increase and financing our subscribers’ handset purchases on installment payment plans. Total shareholders’ equity Despite the increase in our subscriber base in 2009, our call charges revenue decreased 11.5% to KRW 3.26 trillion in 2009 from KRW 3.68 trillion in increased 4.8% to KRW 11.24 trillion as of December 31, 2009 from KRW 10.73 trillion as of December 31, 2008, due primarily to gains on valuation of 2008 due primarily to increased subscription to call plans with higher monthly basic charges and lower call charges. The average monthly outgoing investment securities and an increase in retained earnings. As a result, our debt-to-equity ratio improved to 40.3% from 41.4%. voice minutes per user (Minutes of Usage, or MOU) declined slightly to 197 minutes in 2009 from 200 minutes in 2008.

Subscribers 3. REVENUE The total number of wireless subscribers in Korea was approximately 47.9 million as of December 31, 2009 with a wireless telecommunications service penetration rate of 98.4%. Despite the saturated wireless market in Korea, we continued to add new subscribers throughout the year, and ended Our total revenue in 2009 amounted to KRW 12.10 trillion, an increase of KRW 426.5 billion, or 3.7%, from KRW 11.67 trillion in 2008. This the year 2009 with approximately 24.3 million subscribers. Our Korean wireless market share based on the number of subscribers was 50.6% as of increase was attributable to an increase of KRW 420.4 billion, or 4.0%, to KRW 10.88 trillion in 2009 from KRW 10.46 trillion in 2008 in our cellular December 31, 2009, compared to 50.5% as of December 31, 2008. services revenue and an increase of KRW 6.1 billion, or 0.5%, to KRW 1,224.6 billion in 2009 from KRW 1,218.5 billion in 2008 in our revenue from interconnection fees. The increase in cellular services revenue was driven by strong growth in monthly fees, wireless Internet sales and value-added Subscribers and Market Share in 2009 and other service fees, as well as an increase in sign-up fees, which more than offset a decrease in call charges. 25,000 50.6% 50.6% 50.6% 50.5% 50.0 Total Revenue Breakdown (in billions of KRW) 24,500

24,000

2009 10,876.6 1,224.6 23,500

23,000

22,500 2008 10,456.2 1,218.5 Subscribers (in thousands) 23,348 23,831 24,137 24,270 Celluar Services 22,000 40.0 Market Share (%)

Interconnection Revenue FINANCIAL REVIEW 2009 SK TELECOM ANNUAL REPORT 1Q 2Q 3Q 4Q

2,000 4,000 6,000 8,000 10,000 12,000 14,000

042 043 ARPU and MOU Our average revenue per user (ARPU) per month decreased by 1.3% to KRW 42,469 in 2009 from KRW 43,016 in 2008. This decrease was due to Cellular Service Sales decreases in average monthly ARPU from call charges, interconnection fees and sign-up fees, partially offset by increases in average monthly ARPU Our cellular services revenue grew by 4.0% to KRW 10.88 trillion in 2009 from KRW 10.46 trillion in 2008 due primarily to increases in monthly fees and from monthly fees, wireless Internet services and value-added and other service fees. wireless Internet sales, as well as increases in value-added and other service fees and sign-up fees, partially offset by a decrease in call charges. The increase in monthly fees resulted from increased subscription to our service plans with higher monthly basic charges and an increase in our average The average monthly ARPU from call charges decreased 15.7% to KRW 11,436 in 2009 from KRW 13,570 in 2008 due to, among others, increased subscriber base. subscription to call plans with higher monthly basic charges and lower call charges. The average monthly ARPU from monthly fees increased 10.4% to KRW 14,603 in 2009 from KRW 13,232 in 2008, primarily as a result of increased subscription to our service plans with higher monthly basic charges. Cellular Service Sales Breakdown (in billions of KRW) The average monthly ARPU from wireless Internet services increased 3.9% to KRW 9,334 in 2009 from KRW 8,982 in 2008, primarily as a result of increased subscription to fixed-price data plans. The average monthly ARPU from value-added and other service fees increased 8.9% to KRW 1,382 in 2009 from KRW 1,269 in 2008, due principally to an increase in revenues from our leased line business.

2009 403.8 4,160.9 3,258.5 2,659.5 393.8 The average monthly minutes of usage (MOU) declined slightly to 197 minutes in 2009 from 200 minutes in 2008.

Average ARPU & MOU (outgoing) in 2009

44,000 210 Sign-up Fees

Monthly Fees 201 2008 400.2 3,591.1 3,682.9 2,437.7 344.3 200 200 Call Charges 198 198 197 Wireless Internet Sales 43,000 190 VAS & Others 190

0 2,000 4,000 6,000 8,000 10,000 12,000 42,000 180

170 Our monthly fees revenue increased 15.9% to KRW 4.16 trillion in 2009 from KRW 3.59 trillion in 2008, as a result of increased subscription to our 41,000 service plans with higher monthly basic charges as well as 5.0% growth in our average subscriber base in 2009 over 2008. Our revenue from wireless 160 Internet sales increased 9.1% to KRW 2.66 trillion in 2009 from KRW 2.44 trillion in 2008, primarily as a result of increased subscription to fixed-price Average ARPU (in KRW) data plans. 43,016 41,372 43,369 42,413 42,698 42,469 40,000 150 MOU (outgoing, minutes) 2008 Overall 1Q 2Q 3Q 4Q 2009 Overall

Wireless Internet (WI) Interconnection Revenue (in billions of KRW) Our WI revenue consists of (i) revenue mainly relating to wireless Internet access, (ii) revenue from SMS and (iii) revenue from other miscellaneous services. The wireless Internet access-related services revenue is comprised of usage charges for data contents, call charges for data transmission, monthly fees from fixed-price data plans and others. 2009 450.6 774.0 Our revenue from WI service increased 9.1% to KRW 2.66 trillion in 2009 from KRW 2.44 trillion in 2008. This increase was due primarily to an increase in wireless Internet access-related revenue, as well as an increase in other miscellaneous services. The increase in wireless Internet access-related revenue resulted primarily from increased subscription to fixed-price data plans. The increase in other miscellaneous services was mainly due to increases in sales relating to solution sales, and revenue from 11 Street. Our average monthly ARPU from WI services increased 3.9% to KRW 9,334 in 2009 from KRW 8,982 in 2008. 2008 473.2 745.3

Wireless Internet Revenue and ARPU in 2009 L-M M-M

740 9,800 0 200 400 600 800 1,000 1,200 1,400 9,713

720 9,600

9,469 700 9,400 4. PROFITABILITY

680 Income Statements 9,171 9,200 660

9,000 In billions of KRW In billions of KRW 640 8,968 2009 % of Revenue 2008 % of Revenue 8,800 620 Revenue 12,101.2 100.0% 11,674.7 100.0% Wireless Internet Sales (in billions of KRW) 623.5 669.8 661.0 705.2 Operating expenses 9,921.8 82.0% 9,614.8 82.4% 600 8,600 Wireless Internet ARPU (in KRW) Labor cost (1) 519.8 4.3% 476.9 4.1% 1Q 2Q 3Q 4Q Commissions paid (2) 4,594.7 38.0% 4,419.2 37.9% Depreciation and amortization (3) 1,895.9 15.7% 1,804.9 15.5% Composition of Wireless Internet Revenue in 2009 Network interconnection 1,068.2 8.8% 1,039.3 8.9% Leased line 332.8 2.8% 391.2 3.4% Rent 277.0 2.3% 238.7 2.0% FINANCIAL REVIEW 2009 SK TELECOM ANNUAL REPORT Others Advertising 265.5 2.2% 300.5 2.6% 8.7% Others 967.9 8.0% 944.2 8.1%

044 045 Operating income 2,179.3 18.0% 2,059.9 17.6% Other income 786.4 6.5% 1,015.3 8.7% Other expenses 1,308.4 10.8% 1,569.1 13.4% Wireless Internet Income before income taxes 1,657.3 13.7% 1,506.1 12.9% Access-Related SMS Income taxes 369.0 3.0% 228.4 2.0% 38.1% 53.2% Net income 1,288.3 10.6% 1,277.7 10.9% EBITDA (4) 4,209.4 34.8% 4,003.3 34.3%

(1) Labor cost = Salaries + Provisions for severance benefit + other benefits

(2) Includes marketing commissions and other commissions

(3) Excludes R&D related depreciation

(4) EBITDA = Operating income + Depreciation + R&D related depreciation within the R&D expense

Our operating income increased 5.8% to KRW 2.18 trillion in 2009 from KRW 2.06 trillion in 2008 and our operating margin increased to 18.0% in Interconnection Revenue 2009 from 17.6% in 2008, as our revenue grew at a rate higher than that of our operating expenses. The improvement in our operating margin was Interconnection revenue increased 0.5% to KRW 1,224.6 billion in 2009 from KRW 1,218.5 billion in 2008. The increase was due to an increase attributable, among others, to a 14.9% decrease in our leased line expenses due primarily to our acquisition of SK Networks’ leased line business in in mobile-to-mobile interconnection revenue, partially offset by a decrease in land-to-mobile interconnection revenue. Our mobile-to-mobile September 2009, as well as an 11.6% decrease in our advertising costs. As a result, our EBITDA increased to KRW 4.21 trillion in 2009 from KRW 4.00 interconnection revenue was KRW 774.0 billion in 2009, representing a 3.9% increase from the previous year. Our land-to-mobile interconnection trillion in 2008. revenue amounted to KRW 450.6 billion in 2009, representing a 4.8% decrease from the previous year. We recorded net other expense of KRW 522.0 billion in 2009 compared to net other expense of KRW 553.8 billion in 2008. With an effective tax rate of Our average monthly ARPU from interconnection services decreased 4.3% to KRW 4,298 in 2009 from KRW 4,490 in 2008. 22.3%, our net income was KRW 1.29 trillion in 2009, compared to KRW 1.28 trillion in 2008.

Operating Expenses Our operating expenses for 2009 amounted to KRW 9.92 trillion, representing a 3.2% increase from KRW 9.61 trillion in 2008. Marketing expenses accounted for 26.9% of our total revenue at KRW 3.25 trillion in 2009, which represented a 6.1% increase from the previous year. This increase in marketing expenses, which include initial commissions, monthly commissions, retention commissions and advertising costs, was due mainly to an increase in initial commissions, as well as increases in monthly commissions and retention commissions, partially offset by a decrease in our advertising costs. The initial commissions paid, which include handset subsidies and other incentives for new subscribers, increased 9.4% to KRW 1.83 trillion in 2009 from KRW 1.68 trillion in 2008 due primarily to an increase in new subscribers. Monthly commissions that we pay to our authorized dealers for a certain period of time after new subscriptions or new purchases of handsets 5. FINANCIAL STRUCTURE increased 10.8% to KRW 430.3 billion in 2009 from KRW 388.2 billion in 2008 due to, among others, an increase in our subscriber base. The retention commissions paid, which include handset subsidies for our existing subscribers and expenses relating to our alliance arrangements with businesses Current Assets which agree to offer benefits to our subscribers, increased 3.3% to KRW 720.9 billion in 2009 from KRW 698.1 billion in 2008. Our advertising costs As of December 31, 2009, we had current assets of KRW 4.98 trillion, a 24.9% increase from KRW 3.99 trillion as of December 31, 2008. Our cash decreased 11.6% to KRW 265.5 billion in 2009 from KRW 300.5 billion in 2008 due to the reduction of media advertisements. and marketable securities (including short-term financial instruments) increased 7.4% to KRW 968.8 billion as of December 31, 2009, compared to KRW 902.3 billion as of December 31, 2008, due primarily to the sale in 2009 of our investment securities, including shares of China Unicom and SK Marketing Expense Breakdown (in billions of KRW) C&C. As of December 31, 2009, our trade accounts receivable amounted to KRW 1.56 trillion, a 1.2% decrease from KRW 1.58 trillion as of December 31, 2008, due primarily to an increase in allowance for doubtful accounts. Our other accounts receivable increased 65.8% to KRW 2.03 trillion as of December 31, 2009 from KRW 1.23 trillion as of December 31, 2008 primarily as a result of an increase in sales of handsets to subscribers on installment payment plans. 2009 1,833.6 430.3 720.9 265.5 Investment Assets Our investment assets consist primarily of available-for-sale securities and equity method investment securities. Our investment assets decreased 9.9% to KRW 5.11 trillion as of December 31, 2009 from KRW 5.67 trillion as of December 31, 2008. This decrease was mainly attributable to the sale of our investment securities, including shares of China Unicom and SK C&C, partially offset by gains on valuation of our investment in POSCO and an

Initial Commissions increase in our investment in SK Broadband. 2008 1,676.7 388.2 698.1 300.5 Monthly Commissions Retention Commissions Current Assets (in billions of KRW) Investment Assets (in billions of KRW) Advertising Costs 5,000 7,000 0 500 1,000 1,500 2,000 2,500 3,000 3,500 424.0 1,039.4 1,108.2 2,032.8 6,000 131.7 4,000 64.2 285.7 148.0 Depreciation and amortization excluding research and development related depreciation expenses increased 5.0% to KRW 1.90 trillion in 2009 from 1,226.0 5,000 172.0

KRW 1.80 trillion in 2008, due principally to an increase in depreciation expenses resulting from our acquisition of SK Networks’ leased line business. 3,000 4,000 Our non-marketing related commissions decreased 2.8% to KRW 1.61 trillion in 2009 from KRW 1.66 trillion in 2008, due principally to a decrease in 1,557.5 commissions paid to contents providers as a result of the disposition of our MelOn business unit to our consolidated subsidiary Loen Entertainment 1,576.5 3,000 2,000 Inc. in December 2008 and a decrease in present value discount with respect to long-term accounts receivable for handsets sold on installment payment plans. Interconnection expenses amounted to KRW 1.07 trillion in 2009, representing a 2.8% increase from 1.04 trillion in 2008. This increase 2,000 was attributable primarily to the growth in the subscriber base and an increase in mobile-to-mobile interconnection traffic volume in 2009, partially 1,000 968.8 902.3 1,000 offset by decreases in interconnection fee rates. Labor costs increased 9.0% to KRW 519.8 billion in 2009 from KRW 476.9 billion in 2008, due 5,107.7 5,668.1 primarily to a non-recurring increase in labor costs in the first quarter of 2009 resulting from a change of bonus payment dates from late 2008 to early 0 0 2009. Leased line expenses decreased 14.9% to KRW 332.8 billion in 2009 from KRW 391.2 billion in 2008, due primarily to the increased use of our 2009 2008 2009 2008 FINANCIAL REVIEW 2009 SK TELECOM ANNUAL REPORT own transmission lines following our acquisition of SK Networks’ leased line business on September 30, 2009.

Cash & Marketable Securities Non-trade Receivables Investment Securities Long term Loans Other Income / Expenses 046 047 Receivables from Sales Other Current Assets Guarantee Deposits Others Other income consists primarily of interest income, commission income, dividend income, gains on valuation of investment securities accounted for under the equity method, foreign exchange and translation gains, gains on valuation of currency swaps and others. In 2009, other income decreased 22.5% to KRW 786.4 billion from KRW 1.02 trillion in 2008, due primarily to decreases in foreign exchange and translation gains and gains on valuation of currency swaps hedging our foreign currency-denominated debt. Interest-Bearing Financial Debt We had KRW 8.06 trillion of total liabilities as of December 31, 2009, a 2.1% increase from KRW 7.89 trillion as of December 31, 2008, due mainly to a Other expenses consist primarily of interest expenses, losses on valuation of investment securities accounted for under the equity method, foreign 12.3% increase in bonds payable and long-term borrowings to KRW 4.17 trillion as of December 31, 2009 from KRW 3.71 trillion as of December 31, exchange and translation losses, losses on valuation of currency swaps, impairment losses and others. Other expenses decreased 16.6% to KRW 2008. The proceeds of the bonds payable and long-term borrowings were used, among others, in repaying our maturing debt, acquiring SK Networks’ 1.31 trillion in 2009 from KRW 1.57 trillion in 2008. This decrease was attributable primarily to a decrease in losses related to currency swaps and the leased line business, participating in SK Broadband’s capital increase and financing our subscribers’ handset purchases on installment payment plans. incurrence in 2008 of an impairment loss on our investment in LG Powercom. Our exposure to fluctuations in foreign exchange rates is limited as we As a result, our total interest-bearing financial debt increased 2.0% to KRW 4.53 trillion as of December 31, 2009 compared to KRW 4.44 trillion as of hedge a substantial portion of our foreign currency-denominated assets and liabilities. December 31, 2008. Our debt-to-equity ratio decreased to 40.3% from 41.4%.

Income Tax Interest Bearing Financial Debt (in billions of KRW) Provision for income tax increased 61.5% to KRW 369.0 billion in 2009 from KRW 228.4 billion in 2008. Our effective tax rate also increased 7.1%p to 5,000 22.3% in 2009 from 15.2% in 2008. The increases in income tax and effective tax rate are attributable primarily to the increase in our income before 0.0 154.7 income tax, a tax refund in 2008 related to the sale of our investment in SKT USA Holdings and the decrease in deferred tax liabilities in 2008 due to 364.2 579.4 the reduction of corporate income tax rate in December 2008. 4,000 3,349.2 2,882.5

3,000

2,000

Long term Borrowings 1,000 Corporate Bonds 816.8 825.8 Current Portion of Long term Debt

0 Short term Borrowings 2009 2008 Shareholders’ Equity NON-CONSOLIDATED STATEMENTS OF FINANCIAL POSITION Our total shareholders’ equity as of December 31, 2009 amounted to KRW 11.24 trillion, representing an increase of 4.8% from KRW 10.73 trillion as DECEMBER 31, 2009 AND 2008 of December 31, 2008. This increase was attributable primarily to an increase in accumulated other comprehensive income to KRW 913.9 billion as of December 31, 2009 from KRW 373.8 billion as of December 31, 2008, as well as an increase in retained earnings to KRW 9.96 trillion as of December 31, 2009 from KRW 9.50 trillion as of December 31, 2008. The increase in accumulated other comprehensive income was due principally to gains on valuation of available-for-sale securities, including our investment in POSCO. Korean won / In millions Translation into U.S. dollars / In thousands December 31, December 31, December 31, December 31, Shareholders’ Equity (in billions of KRW) 2009 2008 2009 2008 ASSETS 10,000 CURRENT ASSETS: 9,959.3 9,501.0 Cash and cash equivalents ₩420,576 ₩434,177 $361,428 $373,116 8,000 Short-term financial instruments 178,057 98,406 153,016 84,567 6,000 Short-term investment securities 370,182 369,744 318,121 317,745 Accounts receivable - trade, net of allowance for 4,000 doubtful accounts of ₩142,702 million as of December 31, 2009 3,032.0 2,000 2,957.1 and ₩58,404 million as of December 31, 2008 1,557,514 1,576,459 1,338,473 1,354,754 44.6 44.6 Short-term loans, net of allowance for doubtful 0 accounts of ₩933 million as of December 31, 2009 -2,147.5 2,000 -2,708.4 and ₩1,090 million as of December 31, 2008 66,888 107,934 57,481 92,755 Accounts receivable - other, net of allowance for 4,000 doubtful accounts of ₩26,059 million and present value of 2009 2008 ₩8,478 million as of December 31, 2009 and ₩21,071 million and ₩27,314 as of December 31, 2008 2,032,757 1,225,983 1,746,880 1,053,567

Retained Earnings Capital Surplus Capital Stock Capital Adjustment Inventories 22,656 13,927 19,470 11,968 Prepaid expenses 112,762 98,273 96,904 84,452 Current deferred income tax assets, net 194,825 21,677 167,426 18,628 6. CAPITAL EXPENDITURE Currency swap - 8,236 - 7,078 Accrued income and other 26,835 35,687 23,061 30,668 We spent approximately KRW 1.77 trillion for capital expenditures in 2009, representing a 7.8% decrease from KRW 1.92 trillion in 2008. Network- related investment decreased 6.7% to KRW 1.36 trillion in 2009 from KRW 1.46 trillion in 2008, and represented 76.9% of our total capital expenditures Total Current Assets 4,983,052 3,990,503 4,282,260 3,429,298 for the year. Network-related investment was used primarily to expand and upgrade our WCDMA network, improve our CDMA network quality and FINANCIAL REVIEW 2009 SK TELECOM ANNUAL REPORT expand the coverage of our WiBro network to 84 cities in Korea. NON-CURRENT ASSETS:

048 049 Property and equipment, net 5,196,521 4,698,214 4,465,708 4,037,480 Intangible assets, net 2,665,936 2,941,592 2,291,012 2,527,901 Long-term financial instruments 6,519 19 5,602 16 Long-term investment securities 2,420,262 3,067,389 2,079,888 2,636,007 Equity securities accounted for using the equity method 2,680,872 2,600,719 2,303,847 2,234,967 Long-term loans, net of allowance for doubtful accounts of ₩24,250 million as of December 31, 2009 and ₩23,342 million as of December 31, 2008 64,216 131,700 55,185 113,178 Long-term accounts receivable - other, net of present value of nil as of December 31, 2009 and ₩45,464 million as of December 31, 2008 761,647 572,139 654,533 491,676 Guarantee deposits 172,021 147,970 147,829 127,160 Long-term currency swap 223,173 356,815 191,787 306,634 Long-term deposits and other 123,414 110,435 106,058 94,905

Total Non-current Assets 14,314,581 14,626,992 12,301,449 12,569,924

TOTAL ASSETS ₩19,297,633 ₩18,617,495 $16,583,709 $15,999,222

[Continued]

TOTAL LIABILITIES ANDSTOCKHOLDERS’EQUITY STOCKHOLDERS’ EQUITY: NON-CURRENT LIABILITIES: CURRENT LIABILITIES: LIABILITIES ANDSTOCKHOLDERS’EQUITY

Total Stockholders’Equity Retained earnings: Retained earnings: Accumulated othercomprehensive income(loss): Capital adjustments: Capital surplus Capital stock Total Liabilities Total Non-current Liabilities Guarantee depositsreceived andother Long-term interest swap Long-term currency swap Non-current deferred incometaxliabilities,net Accrued severanceindemnities,net Long-term payables-other, netofpresent value Subscription deposits Long-term borrowings Bonds payable,net Total Current Liabilities Advanced receipts andother Interest swap Currency swap Current portionofsubscriptiondeposits Current portionoflong-termdebt,net Withholdings Accrued expenses Income taxpayable Accounts payable Short-term borrowings

Unappropriated Appropriated Loss onvaluationofinterest swap,net Gain(Loss) onvaluationofcurrency swap,net Equity inothercomprehensive lossofaffiliates,net Unrealized gainsonvaluationoflong-term Other capitaladjustments Equity methodincapitaladjustments Loss ondisposaloftreasury stock Treasury stock and discount of ₩ investment securities,net 15,416 millionasofDecember31,2008 ₩ 5,837 millionasofDecember31,2009 11,241,450 1,069,237 8,056,183 4,761,550 155,421 3,294,633 34,791 Korean won/Inmillions

3,349,216 December 31, ₩ 19,297,633 (1,992,083) 8,890,053

1,003,145 3,032,009 1,136,475 (662,983) 381,940 210,859 164,163 816,760 513,277 250,656 934,372 (10,932) (84,809) (52,626) 44,639 16,215 18,281 25,155 35,145 6,516 5,480 1,173 6,804 2009 (716) ₩ -

4,475,998 97,102 10,729,007 1,205,981 7,888,488 3,412,490 11,838

December 31, ₩ 18,617,495 (2,055,620) ₩ 8,295,037 2,957,095 2,882,483 1,039,509 413,270 279,616 304,584 825,750 190,359 708,619 285,164 692,788 322,431 154,700 (26,129) (91,910) 44,639 33,498 23,947 24,222 (8,532) (4,824) 4,796 7,082 2008 - - - 9,660,508 918,865 6,923,201 4,091,909 133,563 2,831,292 29,898 $16,583,709 Translation intoU.S.dollars/Inthousands December 31, (1,711,926) 7,639,800 2,605,602 2,878,199 (569,744) 862,068 181,205 141,076 701,895 441,092 215,405 802,967 328,226 976,647 (72,882) (45,225) 38,361 13,935 15,710 21,617 30,202 (9,395) 5,599 4,709 1,008 5,847 2009 (615) $ - $ 9,220,132 1,036,378 2,932,574 10,172 $15,999,222 6,779,090 3,846,516 83,445 December 31, (1,766,528) 7,128,464 2,541,224 2,477,105 $132,944 355,150 240,292 261,749 709,621 163,588 608,962 245,060 595,358 277,086 893,318 (22,455) (78,984) 38,361 28,787 20,579 20,816 (7,332) (4,146) 4,122 6,086 2008 - - -

050 FINANCIAL REVIEW

051 SK TELECOM ANNUAL REPORT 2009 [Continued]

FOR THEYEARSENDEDDECEMBER31,2009AND2008 NON-CONSOLIDATED STATEMENTS OFINCOME OTHER INCOME: OPERATING INCOME OPERATING EXPENSES: OPERATING REVENUE Sub-total Other Gain onvaluationofcurrency option Gain onvaluationofcurrency swap Gain ondisposalofproperty andequipment Gain ondisposalofinvestmentassets Gain onvaluationofshort-terminvestment Equity in earnings ofaffiliates Equity inearnings Foreign exchangeandtranslation gain Reversal ofallowancefordoubtfulaccounts Commissions Dividends Interest income Sub-total Other Cost ofgoodssold Repair Frequency usage Rent Research anddevelopment Advertising Leased line Network interconnection Depreciation andamortization Commissions paid Labor cost intangible assets securities

2,179,337

(9,921,847) (439,332) Inmillionsexceptforpershare data

45,619

₩ 12,101,184 (1,068,243) (1,895,880) (4,594,727) ₩ (160,571) (157,400) (277,018) (233,469) (265,498) (332,824) (460,906) 786,444 108,293 116,118 134,038 157,104 (35,979) 14,086 24,547 63,804 99,080 22,741 1,014 2009 -

40,695 2,059,896 (9,614,766) (410,199)

₩ ₩ 11,674,662 (1,039,263) (1,804,910) (4,419,208) 1,015,280 Korean won/ (154,221) (161,619) (238,651) (221,501) (300,506) (391,150) (414,107) 264,417 466,014 107,212 (59,431) 18,661 41,605 18,689 52,475 4,217 1,295 2008 - -

39,202 1,872,846 $10,399,333 (8,526,487) (377,546)

Inthousandsexceptforpershare data $ (1,629,253) (3,948,547) (137,989) (135,264) (238,060) (200,635) (228,160) (286,017) (918,011) (396,086) 675,842 115,188 135,010 (30,919) 93,063 21,095 99,788 12,105 54,831 85,146 19,543 2009 871 - Translation intoU.S.dollars/ 1,770,202 (8,262,593) (352,512)

$ 34,971 $10,032,795 (1,551,076) (3,797,712) (132,532) (138,890) (205,088) (190,350) (258,244) (336,141) (893,106) (355,869) 872,496 227,231 400,476 (51,073) 16,037 35,754 16,061 45,095 92,134 3,624 1,113 2008 - -

DILUTED NETINCOMEPERSHARE NET INCOMEPERSHARE NET INCOME PROVISION FORINCOMETAX INCOME BEFORETAX ORDINARY INCOME OTHER EXPENSES: (In Korean wonandU.S. dollars) (In Korean wonandU.S. dollars) Sub-total Other researchExternal anddevelopment cost Loss onvaluationofinterest swap Loss ontransactionsandvaluationofcurrency swap Loss onrepayment ofbonds Impairment lossonassets Interest anddiscounts Loss ondisposalofproperty, equipmentand Loss ondisposalofaccountreceivable -other Loss ondisposalofinvestmentassets Loss ondisposalofinventories Impairment lossoninvestmentsecurities Equity inlossesofaffiliates Loss onvaluationofshort-terminvestment Foreign exchangeandtranslationloss Donations intangible assets securities

1,657,344 (369,004) (1,308,437) (18,610) Inmillionsexceptforpershare data

₩ ( ₩

1,288,340 1,657,344 (116,324) (148,220) (295,332) (176,076) ₩ ₩ 304,569) (55,528) (83,034) (28,711) (70,765) 17,599 17,808 (3,372) (1,359) (6,246) 2009 (291) - -

1,506,076 (228,418) (1,569,100) (9,724)

₩ ( ₩ 1,277,658 1,506,076 Korean won/ (440,036) (218,729) (258,547) (146,736) ₩ ₩ 256,446) (71,942) (44,758) (99,602) 17,395 17,559 (6,906) (7,916) (7,758) 2008 - - - - $1,107,154 (317,109)

1,424,263 (1,124,425) (15,992) Inthousandsexceptforpershare data $15,304 $15,124 ( 1,424,263 $ (127,375) (253,798) (151,314) 261,736) (47,718) (99,965) (71,357) (24,673) (60,813) (2,898) (1,168) (5,368) 2009 (250) - - Translation intoU.S.dollars/ $1,097,974 1,294,268 (196,294) (1,348,430) (8,357) $14,949 $15,090 ( 1,294,268 $ (378,152) (187,968) (222,186) (126,100) 220,381) (61,824) (38,463) (85,594) (5,935) (6,803) (6,667) 2008 - - - -

052 FINANCIAL REVIEW

053 SK TELECOM ANNUAL REPORT 2009

FOR THEYEARSENDEDDECEMBER31,2009AND2008 NON-CONSOLIDATED STATEMENTS OFAPPROPRIATIONS OFRETAINED EARNINGS

UNAPPROPRIATED RETAINED EARNINGSTOBE APPROPRIATIONS: TRANSFER FROMVOLUNTARY RESERVES: RETAINED EARNINGSBEFOREAPPROPRIATIONS: CARRIED FORWARD TOSUBSEQUENTYEAR Cash dividends Reserve fortechnologydevelopment Reserve forbusinessexpansion Reserve forresearch andmanpowerdevelopment Reserve forlossondisposaloftreasury stock Reserve forresearch andmanpowerdevelopment End ofyear Beginning ofyear Net income Changes inretainedfrom earning Equitymethodaccounting Retirement oftreasury stock Interim dividends 376,667 1,069,237 1,288,340 (1,444,698) (607,698) Korean won/Inmillions

(474,000) (363,000) 376,667 (56,043) (92,477) (72,345) ₩ ₩ 1,206 1,762 2009 - - 1,205,981 1,277,658 455,984 (1,660,203) (609,203)

(350,000) (701,000) 255,984 200,000 (72,793) ₩ ₩ 1,762 1,116 2008 - - - $1,036 323,694 918,865 1,107,154 Translation intoU.S.dollars/Inthousands (1,241,523) (522,235) (407,339) (311,949) 323,694 (48,161) (79,471) (62,171) $ 1,514 2009 - - $1,514 391,857 1,036,378 1,097,975 (1,426,721) (523,528) (300,778) (602,415) 219,984 171,873 (62,556) $ 2008 959 - - -

FOR THEYEARSENDEDDECEMBER31,2009AND2008 NON-CONSOLIDATED STATEMENTS OFCHANGESINSTOCKHOLDERS’EQUITY

[Continued]

(In millionsofKorean won) Balance, January1,2008 Balance, January1,2009 Balance, December31,2008 Balance, December31,2009 Cumulative effect ofchangeinaccountingpolicies Adjusted balance,January1,2008 Cash dividends Interim dividends Net income Conversion ofconvertiblebonds Treasury stock Difference betweentheacquisitioncostand Loss onvaluationofcurrency swap,net Equity inothercomprehensive Loss ondisposaloftreasury stock Loss onvaluationofinterest swap,net Unrealized lossonvaluationoflong-term Cash dividends Interim dividends Net income Conversion right Treasury stock Gain onvaluationofcurrency swap,net Difference betweentheacquisitioncostandnetbookvalue Equity inothercomprehensive Unrealized lossonvaluation oflong-term Gain onvaluationofinterest swap,net between companiesundercommoncontrol the netbookvalueincurred from thetransactions income changesofaffiliates,net investment securities,net between companiesundercommoncontrol incurred from thebusinessacquisition income changesofaffiliates,net investment securities,net

- - - Common ₩ ₩ ₩ ₩ 44,639 44,639 44,639 44,639 44,639 stock ------

15,476

- - ₩ ₩ ₩ ₩ 2,939,353 2,954,829 2,957,095 2,957,095 3,032,009 surplus Capital 73,622 1,544 2,014 (722) 722 ------

(

- (30,908) - ( ( ( adjustments ₩ ₩ ₩ ₩ (2,072,486) 2,708,408) 2,041,578) 2,147,530) 2,147,530) (672,096) (61,002) (14,137) Capital 62,821 48,397 95 ------

(28,427)

4,893 15,197 Accumulated

siveincome Comprehen- ₩ (1,213,419) ₩ ₩ ₩ 1,589,206 1,594,099 373,785 373,785 589,875 913,920 (79,985) 18,248 15,048 other 3,284 ------

- ₩ ₩ ₩ ₩ 8,905,865 8,905,865 1,277,658 9,501,018 9,501,018 1,288,340 9,959,290 earnings Retained (609,712) (609,203) (72,793) (72,345) (56,044) (92,476) ------

₩ ₩ ₩ ₩

15,197 (10,539) (28,427) ers’equity Stockhold- 11,437,485 11,426,946 10,729,007 10,729,007 11,241,450 (1,213,419) 1,277,658 1,288,340 (609,712) (609,203) (672,096) 589,875 (72,793) (61,002) (13,415) (72,345) (85,618) (30,377) 18,248 73,622 15,048 1,544 3,284 Total 95

054 FINANCIAL REVIEW

055 SK TELECOM ANNUAL REPORT 2009

(In thousandsofU.S.dollars) Balance, January1,2008 Balance, January1,2009 Balance, December31,2008 Balance, December31,2009 Cumulative effect ofchangeinaccountingpolicies Adjusted balance,January1,2008 Cash dividends Interim dividends Cash dividends Loss onvaluationofcurrency swap,net Equity inothercomprehensive Net income Interim dividends Loss onvaluationofinterest swap,net Unrealized lossonvaluationoflong-term Loss ondisposaloftreasury stock Treasury stock Difference betweentheacquisitioncostand Conversion ofconvertiblebonds Net income Conversion right Treasury stock Gain onvaluationofcurrency swap,net Difference betweentheacquisitioncostandnetbookvalue Equity inothercomprehensive Unrealized lossonvaluation oflong-term Gain onvaluationofinterest swap,net income changesofaffiliates,net investment securities,net between companiesundercommoncontrol the netbookvalueincurred from thetransactions between companiesundercommoncontrol incurred from thebusinessacquisition income changesofaffiliates,net investment securities,net

- - - $ $38,361 Common $38,361 $38,361 38,361 38,361 stock ------

13,300

- - $ $2,541,224 $2,525,977 $2,541,224 2,539,277 2,605,602 surplus Capital 63,268 1,327 1,730 (620) 620 ------

- ($

(26,561) ($1,845,512) - adjustments ($1,754,461) ($1,845,512) (1,781,022) 2,327,510) (577,576) (12,149) (52,423) Capital 41,591 53,987 82 ------

Accumulated $ 4,205 13,060 (24,429)

$321,217 siveincome Comprehen- $1,365,708 (1,042,771) 1,369,913 $321,217 506,918 785,390 (68,736) 15,682 12,931 other 2,822 ------

- - $ $8,164,842 - $7,653,388 $8,164,842 7,653,388 1,097,974 1,107,154 8,558,665 earnings Retained (523,965) (523,528) (62,555) (62,171) (48,161) (79,471) ------

$ $9,220,132 13,060 (9,056) (24,429) ers’equity Stockhold- $9,828,973 $9,220,132 (1,042,771) 9,819,917 1,097,974 1,107,154 9,660,508 (523,965) (523,528) (577,576) 506,918 (62,555) (11,529) (52,423) (62,171) (73,576) (26,104) 15,682 63,268 12,931 2,822 1,327 Total 82 [Continued]

FOR THEYEARSENDEDDECEMBER31,2009AND2008 NON-CONSOLIDATED STATEMENTS OFCASHFLOWS CASH FLOWSFROMOPERATING ACTIVITIES:

Income notinvolvingcashreceipts: Net income Expenses notinvolvingcashpayments: Sub-total Other Gain onvaluationofcurrency option Gain ontransactionsandvaluationofcurrency swap Gain ondisposalofproperty, equipmentand Gain ondisposalofinvestmentassets Equity in earnings ofaffiliates Equity inearnings Reversal ofallowancefordoubtfulaccounts Foreign translationgain Gain onvaluationofshort-terminvestmentsecurities Sub-total Amortization ofdiscountsonbondsandother Donations Loss onvaluationofinterest swap Loss ontransactionsandvaluationofcurrency swap Loss onrepayment ofbonds Impairment lossonassets Loss ondisposalofproperty, equipmentand Loss ondisposalofaccountreceivable -other Loss ondisposalofinvestmentassets Loss ondisposalofinventories Impairment lossoninvestmentsecurities Equity inlossesofaffiliates Loss onvaluationofshort-terminvestmentsecurities Foreign translationloss Allowance fordoubtfulaccounts Depreciation andamortization Provision forseveranceindemnities intangible assets intangible assets 2,902,229 37,727 (53,950) Korean won/Inmillions (

₩ ₩

2,030,081 1,288,340 (108,293) (116,118) 454,766) 116,324 148,220 295,332 116,072 (24,547) (63,804) (72,954) (14,086) 83,034 28,711 34,481 (1,014) 3,372 1,359 6,246 2009 291 972 7 - - -

3,170,959 36,803 (1,378) ( ₩ ₩ 1,943,422 1,277,658 (264,417) (422,733) 754,306) 440,036 218,729 258,547 127,042 (18,661) (41,605) 44,758 42,728 36,139 (4,217) (1,295) 6,906 7,916 7,758 2008

175 ------

($ 2,494,074 32,421 (46,363) Translation intoU.S.dollars/Inthousands $1,107,154 1,744,580 390,810) 127,375 253,798 (93,063) (21,095) (99,788) (54,831) (62,694) (12,105) 99,965 71,357 24,673 99,748 29,632 2,898 1,168 5,368 2009 (871)

250 835 6 - - -

($ (1,183) 2,725,011 31,627 $1,097,974 1,670,109 (227,231) (363,282) 648,224) 378,152 187,968 222,186 109,175 (16,037) (35,754) 38,463 36,719 31,057 (3,624) (1,113) 5,935 6,803 6,667 2008 150 ------

056 FINANCIAL REVIEW

057 SK TELECOM ANNUAL REPORT 2009 [Continued]

Net CashProvided byOperating Activities operating activities: Changes inassetsandliabilitiesrelated to Sub-total Dividends received from affiliate Deposits forgroup severanceindemnities Severance indemnitiespayments Deferred incometaxes Advanced receipts andother Current portionofsubscriptiondeposits Withholdings Accrued expenses Income taxpayable Accounts payable Long-term accountsreceivables -other Advanced paymentsandother Prepaid expenses Inventories Accounts receivable -other Accounts receivable -trade and otherdeposits

2,784,078 6,817 (951,725) Korean won/Inmillions (

₩ (228,392) (254,795) (816,259) 274,601 (26,122) (44,019) (10,088) 76,425) 10,010 68,881 91,623 17,998 42,771 (8,049) 2009 (277) 2,818,619 7,608 (875,692) (253,647) (572,139) (378,030) 374,153 (19,671) (15,051) (17,748) (72,889) (22,459) ₩ 62,511 16,817 (2,152) 8,149 9,314 2008 (458)

2,392,539 5,858 (817,879) Translation intoU.S.dollars/Inthousands ($ (196,272) (218,962) (701,464) 235,982 (22,448) (37,828) 65,677) 59,194 78,738 15,466 36,756 (6,917) (8,669) 8,602 2009 (238)

2,422,222 6,538 (752,539) (217,975) (491,676) (324,866) 321,534 (16,905) (12,934) (15,252) (62,638) (19,301) $ 53,720 14,452 (1,849) 7,003 8,004 2008 (394) [Continued]

CASH FLOWSFROMINVESTINGACTIVITIES: Net CashUsedinInvestingActivities Cash outflowsforinvestingactivities: Cash InflowsFrom InvestingActivities: Sub-total Cash outflowsfrom business acquisition Cash outflowsfrom transaction ofcurrency swap Increase inintangibleassets Acquisition ofproperty and equipment Increase inguaranteedeposits andother Acquisition ofequitysecuritiesaccountedforusing Acquisition oflong-terminvestmentsecurities Extension oflong-termloans Extension ofshort-termloans Acquisition oflong-termfinancialinstruments Acquisition ofshort-termfinancialinstruments Sub-total Cash inflowsfrom transactionofcurrency option Cash inflowsfrom transactionofcurrency swap Proceeds from disposalofintangibleassets Proceeds from disposalofproperty andequipment Decrease inothernon-current assets Decrease inguaranteedeposits Proceeds from salesofequitysecuritiesaccounted Proceeds from salesoflong-terminvestmentsecurities Collection oflong-termloans Collection ofshort-termloans Decrease inshort-terminvestmentsecurities,net Decrease inlong-termfinancialinstruments the equitymethod for usingtheequitymethod (1,677,678) (4,227,200) (894,784)

Korean won/Inmillions 1,014 2,549,522 (1,683,087)

1,966,854

(177,848) (125,908) (451,702) (489,338) (251,196) 333,225 (51,807) (15,379) (79,651) 85,080 60,393 11,135 25,653 41,123 13,704 (6,500) 4,897 6,444 2009 ₩ -

- - (3,394,212) (4,425,073) 1,030,861 (1,803,750) (1,893,236) (262,324) (245,284) ₩ 370,354 205,758 360,707 (71,431) (88,769) (11,557) (29,676) (19,046) 11,903 30,454 16,143 10,000 9,344 7,616 8,582 2008

- -

871 (1,441,737) (3,632,707) (768,946) Translation intoU.S.dollars/Inthousands 2,190,970 (1,446,386) 1,690,245 (152,836) (108,201) (388,177) (420,520) (215,869) 286,362 (44,521) (13,216) (68,449) 73,115 51,900 22,045 35,340 11,777 (5,586) 4,208 9,569 5,538 2009

$ -

- - (2,916,867) (3,802,753) 885,886 (1,550,079) (1,626,981) (225,432) (210,788) 318,269 176,821 309,979 (61,385) (76,286) (25,503) (16,367) 10,229 26,171 13,873 $8,594 (9,932) 8,030 6,545 7,375 2008 - -

058 FINANCIAL REVIEW

059 SK TELECOM ANNUAL REPORT 2009

could beconvertedintoU.S.dollarsatthatoranyotherrate. amounts won Korean the representationsthat as construed be not should dollars U.S. into translations Such 2009. 31, December ended period the of day business last the on New York of Bank Reserve Federal the by purposes customs for certified as won Korean in transfers cable Yorkfor New of City the in Rate Buying Noon the US$1.00, of rate the at made been has and statements financial of readers of convenience the for solely included is amounts dollar U.S. into amounts won Korean of Note: CASH ANDEQUIVALENTS AT ENDOFTHEYEAR CASH ANDEQUIVALENTS AT BEGINNINGOFTHEYEAR NET INCREASEINCASHANDEQUIVALENTS CASH FLOWSFROMFINANCINGACTIVITIES: Net CashProvided by(Used in)FinancingActivities Cash outflowsforfinancingactivities: Cash inflowsfrom financingactivities: The accompanying financial statements are stated in Korean won, the currency of the country in which the Company is incorporated and operates. The translation The operates. and incorporated is Company the which in country the of currency the won, Korean in stated are statements financial accompanying The Sub-total Decrease inothernon-current liabilities Cash outflowsfrom transaction ofcurrency swap Acquisition oftreasury stock Decrease insubscriptiondeposits Payment ofdividends Repayment ofbonds Repayment ofcurrent portionoflong-termdebts Repayment ofshort-termborrowings Sub-total Proceeds from disposaloftreasury stock Increase inguaranteedepositsreceived andother Proceeds from long-termborrowings Proceeds from short-termborrowings Issuance ofbonds 1,131,509

(1,120,001) (2,251,510) (13,938)

Korean won/Inmillions

- 434,177 ₩ ₩

1,114,937

(681,548) (715,672) (746,849) 420,576 (13,601) (28,939) (60,216) 16,572 (4,348) 2009 - - -

1,595,838

575,646 434,124 42,246 (1,161,714) (2,400) ₩ ₩ (141,469) (682,504) (411,642) 500,000 154,700 894,558 434,177 (63,538) (1,630) 4,334 2008

- - -

373,116 972,379

(962,490) (1,934,869) (11,978) Translation intoU.S.dollars/Inthousands

- (11,688) $ (585,698) (615,023) (641,816) $ 958,138 361,428 (24,869) (51,748) 14,241 (3,737) 2009

- - -

1,371,407

494,690 373,071 36,305 (998,336) (2,062)

₩ $ 1,163.65 to 1,163.65 (121,574) (586,520) (353,751) $ 429,682 132,944 768,752 373,116 (54,602) (1,401) 3,724 2008 - - - Corporate Milestones

Mar. 1984 Established Korea Mobile Mar. 2000 Formed strategic alliances with small & Nov. 2002 Launched June, a mobile multimedia service Jan. 2005 Established a Korea’s first Apr. 2007 Debuted TD-SCDMA test-bed in Sep. 2008 Ranked No. 1 in KCSI by the Korea Telecommunications Services Co., Ltd. medium-sized telecommunications carriers Nov. 2002 Launched MONETA, a mobile continuous audit system Korea after establishing a TD-SCDMA Management Association Consulting in the to co-develop core IMT-2000 technology payment service Jan. 2005 Acquired a WiBro service license from the Service Development Center in China Wireless Telecommunications category for May. 1985 Began operating car phone services Mar. 2000 Completed the development of the world’s Ministry of Information and Communication in February 2007 eleven consecutive years first core components for IMT-2000 Mar. 2003 Signed a formal contract with China Unicom Mar. 2005 Ranked the No. 1 brand in the National Apr. 2007 Selected as one of the “Best Employers in Sep. 2008 Ranked No. 1 in KS-SQI by the Korean Apr. 1988 Designated as a public Mar. 2000 Voted No. 1 for the second consecutive to establish a joint venture company in China Customer Satisfaction Index for eight Asia” by the Wall Street Journal Asia and Standards Association in the Wireless telecommunications service operator time in the Mobile Communications Apr. 2003 Publicly demonstrated the commercialization consecutive years Hewitt Associates Telecommunications category for nine Service category of the National Customer of Wireless Internet Platform for Apr. 2005 Offered Automatic Roaming May 2007 Joined the UN Global Compact, an initiative consecutive years Oct. 1989 Appeared on the Korea Stock Exchange for Satisfaction Index Interoperability (WIPI) Service in Indonesia that encourages businesses worldwide to Sep. 2008 Recognized for excellence in global an initial public offering of KRW 6.4 billion Apr. 2000 Korea Fair Trade Commission approved the May 2003 Merged with SK IMT May 2005 Exported the GPS-based safety service adopt sustainable and socially responsible sustainability as a member of the 2008 acquisition of Shinsegi Telecomm May 2003 Provided CDMA Automatic Roaming Service for children called ‘i-Kids’ to Europe policies Dow Jones Sustainability Index (DJSI), a Apr. 1992 Paging service subscribers May 2000 Established a joint venture company with in Thailand and Saipan Island Jun. 2005 Acquired ‘A’ (stable) rating from Fitch May 2007 Launched the world’s first USIM-based first among Korean telecommunications surpassed 1 million GameKing, China’s biggest video game Jun. 2003 Implemented Rainbow program Jun. 2005 Won the 2005 corporate governance award credit card service in affiliation with LG Card companies software development company for cellular subscribers from the Corporate Governance Service of Jun. 2007 Signed a MOU with Freemove, an alliance Oct. 2008 Opened the T.um exhibition center at Jun. 1994 SK Group became the major shareholder Aug. 2000 Separated with NETSGO Jul. 2003 Launched commercial CDMA cellular service Korea Exchange of leading telecom operators in Europe, in corporate headquarters in Seoul, the world’s of the Korea Mobile Telecommunications Oct. 2000 Launched the world’s first commercial in Vietnam Jun. 2005 Initiated video telephony calls order to expand the WCDMA global roaming first mobile communications exhibition Services Co., Ltd. service with CDMA2000 1X Jul. 2003 Received the Corporate Governance Award between Korea and Japan system center Oct. 2000 Entered into a cellular service contract with Jul. 2003 Purchased 2.48 million POSCO shares held Aug. 2005 Selected as the pilot Jeju Telematics service Jun. 2007 Signed a MOU with the National Urban and Dec. 2008 Won KRW 300 billion contract from the Jan. 1995 Cellular phone and paging service DCN, a mobile communications operator in by SK Corporation provider in the second year project Rural Research Center of the Vietnamese Ministry of National Defense to lead a subscribers reached 1 million and 4 million, the Republic of Daghestan Aug. 2003 CDMA 2000 1xEV-DO network-based June Oct. 2005 SK-EarthLink disclosed a new Ministry of Construction to establish a joint consortium to upgrade the armed forces’ respectively Dec. 2000 Obtained a service license for Asynchronous service subscribers reached 1 million company and brand called ‘HELIO’ working group and cooperate on a u-City communications network IMT-2000 (WCDMA) Aug. 2003 Launched MONETA Online in the U.S. market project Feb. 1995 Unveiled 'MOVE 21'-the Company's vision Payment Service Nov. 2005 Started the ‘WCDMA Automatic Aug. 2007 By converting US $1 billion CBs, became the Jan. 2009 Launched T Cash, a USIM-based prepaid for the 21st century Mar. 2001 Sold radio paging business to Intec Telecom Sep. 2003 Completed the test of a Wireless Roaming’ service all around second largest shareholder of China Unicom card service that supports automatic Mar. 2001 Established SK IMT Co., Ltd. Data Roaming service between France and Italy with 6.6% of shares recharging when linked to a credit card Jan. 1996 Launched the world's first commercial Apr. 2001 Launched wireless Internet services Korea and China Dec. 2005 Received a Presidential Citation in Nov. 2007 Awarded the “Grand Prize in Business Feb. 2009 Launched iTopping 2.0, a new and improved CDMA cellular phone service in Mongolia Sep. 2003 Signed a MOU with Teliasonera recognition of executions of Ethics” by the Korean Academy of Business version of our online widget maker and Jun. 1996 ADRs listed on New York Stock Exchange May 2001 Introduced the world’s first commercial for jointly developing and win-win partnerships with small, Ethics (KABE) for transparent governance, organizer originally launched back in - the first for a non-governmental Korean wireless streaming video service commercializing new businesses medium, and large-sized enterprises strong relationships with business partners August 2008 enterprise Jun. 2001 Concluded a US $1 million CDMA consulting Oct. 2003 Established CapEx Review and and socially responsible contributions Apr. 2009 Signed an intelligent urbanization MoU with Jun. 1996 Credit rating of A+ awarded by agreement with China Unicom, covering Compensation Review committees Mar. 2006 NATE mobile search services topped Dec. 2007 Signed an agreement to acquire Cisco as part of a shared vision to help M ilestones C orporate 2009 SK TELECOM ANNUAL REPORT Standard & Poor's network design, optimization, and other Nov. 2003 Formed a consortium to develop 1 million a month Hanaro Telecom, the nation’s second China’s Sichuan region rebuild from Jul. 1996 Credit rating of A1 awarded by Moody's areas of CDMA technology satellite DMB business Apr. 2006 SK Telecom and Ewha Womans University largest broadband service provider the devastating earthquake of May 2008 Jun. 2001 Established a joint venture fund worth Dec. 2003 Launched WCDMA commercial service agreed to cooperate in building a ubiquitous Dec. 2007 Established the world’s first Apr. 2009 Launched Power Sales & Marketing, Mar. 1997 Changed name to SK Telecom Co.,Ltd., US$ 10 million with Hewlett-Packard Dec. 2003 Provided a CDMA Automatic Roaming 060 061 or U-Campus commercial HSUPA network, with a subsidiary that will strengthen and and unveiled a new corporate identity Aug. 2001 Completed the development of the world’s Service in Taiwan, Mexico and Peru May 2006 Launched ‘HELIO’, a nationwide MVNO speeds of up to 5.76Mbps complement existing sales channels program at the 13th annual shareholders' first video telephony service using the (Mobile Virtual Network Operator) service in May 2009 Signed a consulting agreement and letter meeting CDMA2000 1X network Feb. 2004 Commercialized a next-generation the U.S., in a joint venture with Earthlink Feb. 2008 Entered China’s telematics market by of intent to invest with UAE-based Kulacom Sep. 1997 Completed development of IMT-2000 Sep. 2001 Launched an IC chip-embedded Moneta streaming video compression technology May 2006 Introduced the world’s first commercial acquiring a controlling stake of 65.53% in Broadband Investment Company to jointly test-bed system Card, in affiliation with 5 major domestic Mar. 2004 Celebrated 20th anniversary HSDPA services and a HSDPA handset, ShenZhen E-Eye High Tech, a Chinese GPS pursue WiMAX projects in the Middle East Oct. 1997 Launched NETSGO, a multimedia credit card firms and SK Corporation Mar. 2004 Launched a satellite for the world’s first under its new service brand ‘3G+’ company and Eastern Europe online service Oct. 2001 Launched NATE, a wired and wireless digital multimedia broadcasting service Jun. 2006 Bought US$ 1 billion worth of Feb. 2008 Launched 11 St, a new-concept online May 2009 Acquired SK Networks’s leased line Dec. 1997 Number of CDMA subscribers integrated portal service Mar. 2004 Upgraded credit rating to A3 by Moody’s convertible bonds of China Unicom marketplace that lets users shop and share business, raising the self-owned backhaul reached 3 million Apr. 2004 Launched a joint venture company Jun. 2006 Commercialized WiBro access in tips via the wired or the wireless Internet capacity ratio from 51% to over 90% Jan. 2002 The Ministry of Information and named UNISK in China selected areas of Seoul Mar. 2008 Signed an investment agreement with Taihe Jun. 2009 Received the Global Telecoms Business Jan. 1998 Granted ISO 9002 certification for customer Communications approved the merger Apr. 2004 Started Digital Home Pilot Service Jul. 2006 Debuted a key mobile & Rye Music (TR Music), China’s largest Innovation Award for the successful roll-out service and after-sales service, the first between SK Telecom and Shinsegi May 2004 Issued Convertible Notes worth telecommunications brand, called ‘T’ record company, to become an equal of the industry’s first video call center among Korean cellular service providers Telecomm US $329 million in London Jul. 2006 Stopped providing adult content on its majority shareholder and enter one of the Jun. 2009 Relaunched wired-wireless Internet portal Jun. 1998 Ranked first in the National Customer Jan. 2002 Acquired a business license to operate a Jun. 2004 Offered the Automatic Roaming services as part of continuing efforts world’s largest music markets Nate.com with a new visual identity and Satisfaction Index in the Mobile CDMA cellular service in Cambodia Service in Israel to fulfill ethical responsibilities Mar. 2008 Launched Mobile Money Ventures in direction in its 10th anniversary year Communications Service category Jan. 2002 Launched the world’s first commercial Jul. 2004 Launched a wired and wireless Aug. 2006 Signed first-ever MOU with China’s partnership with Citi to develop mobile Sep. 2009 Launched T Store, Korea’s first online Jun. 1998 SK Telink, SK Telecom's subsidiary, CDMA2000 1x EV-DO service integrated Cyworld portal National Development and Reform financial services and technologies marketplace where anyone can buy or sell launched 00700 International Call services Mar. 2002 Pioneered CDMA-GSM interstandard Jul. 2004 Exceeded US $10 million in export sales of Commission (NDRC) on developing May 2008 Advanced into the Chinese online game mobile apps and content Dec. 1998 SK Teletech, SK Telecom’s subsidiary, international roaming service cellular ring back tone solution ColorRing 3G telecommunications market by acquiring a 30% stake in Magic Oct. 2009 Signed a fixed-mobile convergence launched by introducing its Apr. 2002 Launched Korea-Japan CDMA Aug. 2004 Exported wireless Internet platforms to Sep. 2006 Began broadband wireless T LOGIN Tech Network, the Hong Kong-based (FMC)-based mobile office deal with SKY handsets Automatic Roaming Service Kazakhstan services that enable access to company of Magicgrids Network the Korea Meteorological Administration Apr. 2002 Exported NATE platform to Pelephone, Sep. 2004 Announced the strategic partnership the HSPDA network for digital devices Jun. 2008 Won the Award of Excellence in Corporate Oct. 2009 Launched Korea’s first cell-network-based Mar. 1999 Ranked first in the Mobile Communications an advanced Israeli mobile communications with KB to provide M-Bank Service such as laptops Governance from the Korea Corporate fixed-mobile substitution (FMS) service Service category of the National Customer operator Oct. 2004 Formed Ubinet consortium for Oct. 2006 Agreed to a strategic partnership Governance Service (CGS) for two Dec. 2009 Approved the acquisition of a 49% stake in Satisfaction Index May 2002 Developed next-generation streaming video BcN pilot project for next-generation mobile browsing consecutive years Hana Card for KRW 400 billion, opening Jul. 1999 Launched “TTL,” a cellular service directed compression technology (H.26L) Oct. 2004 Secured over 100 thousand S-Fone service with Google Jun. 2008 Set the global standard for telematics the way for new products and synergies in at the youth market May 2002 Launched Automatic Roaming Service subscribers in Vietnam Dec. 2006 Established a strategic alliance with technology when the Java Community the mobile payment space Oct. 1999 Number of cellular subscribers in the U.S. Nov. 2004 Launched a wired and wireless integrated Samsung Electronics for domestic and Process Board adopted SK Telecom’s reached 10 million w Jul. 2002 Signed a MOU with China Unicom for the music portal service called MelOn overseas market cooperation by technology, which enables remote-control establishment of a joint venture company Nov. 2004 Started cellular ringback tone supplying 20 types of handsets automotive functions by mobile phone in China service business in the U.S. Jun. 2008 Became the second-largest shareholder of Sep. 2002 Credit rating upgraded to Baa1 Feb. 2007 Joined the Bridge Mobile Alliance Virgin Mobile USA, with a 17% stake and from Baa2 by Moody’s Mar. 2007 Launched nationwide HSDPA service two seats on the Board Oct. 2002 Showcased the revolutionary after setting up a HSDPA network that CDMA2000 1x EV-DO covers 99% of the population network in China Apr. 2007 Introduced a dual-mode device that Nov. 2002 Expanded the Automatic Roaming supports HSDPA and WiBro Service in China and the U.S. simultaneously Global Network Investor Information

SEOUL BEIJING TOKYO CORPORATE HEADQUARTERS TRANSFER AGENT AND REGISTRAR ANNUAL GENERAL SK Telecom Co., Ltd. SK Telecom China Holding Co., Ltd. SK Telecom Co., Ltd. SK Telecom Co., Ltd. Common Stock SHAREHOLDERS’ MEETING 11, Euljiro 2-ga, Jung-gu 25th Floor, SK Tower, Tokyo Office 11, Euljiro 2-ga, Jung-gu Kookmin Bank Friday, March 12, 2010, at 9 AM Seoul 100-999, Korea No.6 Jia, Jian guo men wai Avenue, Yamato Seimei Bldg., 8F, 1-1-7 Seoul 100-999, Korea Securities Agency Business Department SK Telecom Boramae Building, Chao yang District, Beijing 100022, China Uchisaiwai-cho, Chiyoda-ku Tel: 82-2-6100-2114 34, Yeoido-dong, Yeongdeungpo-gu 58 Boramae-gil, Gwanak-gu Tel: 82-2-6100-2114 Tokyo 100-0011, Japan Seoul, Korea Seoul, Korea Tel: 86-10-5928-0105 DATE OF ESTABLISHMENT Tel: 82-2-2073-8110 Fax: 86-10-5928-0060 Tel: 81-3-3591-3800 March 29, 1984 Fax: 82-2-2073-8111 COMPANY WEBSITE SUNNYVALE Fax: 81-3-3591-3807 www.sktelecom.com/eng/ SK Telecom Americas, Inc. PAID IN CAPITAL AMERICAN DEPOSITARY SHARES 100 Mathilda Place, Suite 230 HO CHI MINH KRW 44,639 million Citibank, N.A. INVESTOR RELATIONS

Sunnyvale, CA 94086, USA SKT Vietnam Pte., Ltd. JAKARTA G lobal N etwork / I nvestor nformation 2009 SK TELECOM ANNUAL REPORT as of December 31, 2009 388 Greenwich St., 14th Floor For investor inquiries, 10th Floor, Bitxco Office Building, SK Telecom Co., Ltd. New York, NY 10013, USA Email: [email protected] Tel: 1-408-328-2900 19-25 Nguyen Hue Street Jakarta Office NUMBER OF COMMON SHARES Tel: 1-212-816-6859 Or mail to: IR Office, SK Telecom Fax: 1-408-328-2931 District 1 HCMC, Vietnam Bursa Efek Jakarta Tower-1, 15th Fl. 062 063 80,745,712 Shares Fax: 1-212-816-6865 11, Euljiro 2-ga, Jung-gu, JI. Jend Sudirman Kav. 52-53 as of December 31, 2009 Seoul 100-999, Korea Tel: 84-8-3822-5882 Jakarta 12190, Indonesia AVAILABLE FILINGS LONDON Fax: 84-8-5413-6344 SECURITIES LISTINGS Form 20-F SK Telecom Europe, Ltd. Tel: 62-813-8363-3883 Korea Stock Exchange: 017670.KS Form 6-K: Quarterly Reports, 33 St. James’s Square Fax: 62-21-5140-2573 (Common Stock) Proxy Statements, and other material London, SW1Y 4JS, UK New York Stock Exchange: SKM (ADS) announcements

Tel: 44-207-661-9654 Fax: 44-207-661-9140 064 sustainability management

065 SK TELECOM ANNUAL REPORT 2009

At SK Telecom, we realize that we would not be the success we are today without loyal customers, dedicated employees, innovative partners, and committed investors. It is our highest ambition to earn the trust and admiration of all of our stakeholders as we practice sustainability in every aspect of our operations to help make our world a better, brighter place to live. Sustainability Management

Building on a solid foundation the board, and help identify new business In 2009, we created a consultative group to Our philosophy—the SK Management opportunities. As part of our commitment to support the committee in its mission and our customer- System—is the foundation of our sustainability transparency, we publish the results of our established key performance indicators for our oriented management commitment. At its core, the SKMS embraces activities and plans for the coming year in our CSR activities as we continued to strengthen our a vision of making the world a better place by annual sustainability report published at commitment to sustainability. philosophy and creating value for all stakeholders. Today, we the beginning of each year. continue our mission to achieve this vision in Earning global recognition commitment to harmony with our profitability mandate through Leading from the top Our inclusion on the Dow Jones Sustainability creative, strategic CSR initiatives that promote Backed by unanimous board approval, Indexes for a second straight year in 2009 creating greater our values of integrity, community involvement, we became the first signatory of the UN Global is raising our profile in global markets. and environmental responsibility. Compact from Korea’s top-four business groups Our international profile as Korea’s top CSR value for all in May 2007. In May 2008, we established champion got an additional boost in 2009 as Pursuing transparency in the Corporate Citizenship Committee, one of SK Chairman Chey Tae-won became the nation’s stakeholders sustainability our board’s five committees, to take the lead first corporate executive to be appointed is laying a solid Our sustainability strategy focuses on five major in our corporate-wide implementation of the to the UN Global Compact Board. As we look areas: the environment, win-win partnerships, compact’s ten principles in the areas of labor, to the future, we are confident that our sound foundation for customer protection, community involvement, human rights, the environment, and anti- business practices will continue to enhance and ethics. Shaped by both internal and external corruption. Composed of one inside and three our ability to respond to the rapidly changing sustainability. expectations of our role in the community as outside directors, this four-member committee business environment as well as our reputation Korea’s leading mobile operator, our strategy is tasked with evaluating the direction and as a global ICT leader. is designed to minimize risk exposure to major performance of our sustainability strategy and issues, enhance competitiveness across advising on external communications matters.

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067 SK TELECOM ANNUAL REPORT 2009

Environmental Preservation

1 green green technology awareness

green customer service

Growing with green technology raise awareness of the importance of environmental Delivering greener customer service Information and communications companies have management with the widest possible audience. In recent years, we have found numerous ways to we are thinking an increasingly important role to play on the road to On a more practical level, we continue to progressively deliver better customer service with fewer resources green growth. Our comprehensive strategy for green adopt and expand systems that will conserve such as paperless billing, remote equipment green to deliver growth encompasses the greening of our operations, resources and energy as we bring green thinking diagnostics, and online customer care. In 2009, supply chain, and consumer lifestyles as well as into the workplace. In 2009, we took measures such we installed environment-friendly repeaters powered sustainable value the development of new businesses with the potential as the removal of single-use disposable products by solar and wind at two coastal locations in the Jeju to spur the greening of all industries. We gave our in office areas, leading to a 10% reduction in solid and Gunsan regions, expanding our service coverage to our local company-wide environmental management strategy waste generation. We plan to install LED lighting in in marine areas as well as providing an emergency a major boost in 2009 by establishing the Green ICT operational facilities after trials showed a 30% savings communications network. communities. Committee. Composed of executives representing all in energy consumption. We also reduced energy business areas, the committee is expected to play consumption by upgrading over 1,500 base stations Making everyday life greener a leading role in helping each business develop with water-based natural cooling systems as well as We are helping raise environmental consciousness the ability to manage its own carbon footprint as virtualizing servers and upgrading to high-efficiency and enhance sustainability in local communities with well as drive the development of new business cooling equipment at our data centers. In 2010, we a variety of solutions ranging from remote opportunities in the field of enterprise productivity. intend to complete a greenhouse gas inventory to management of public infrastructure such as guide us in setting reduction targets for each area of streetlights to bus information systems that enhance Increasing green awareness our operations and bring environmental themes into commuter convenience. We also offer a wide In 2009, we launched an online introductory course our community volunteer programs as we continue selection of handy mobile solutions that help on environmental management to increase employee to look for new ways to do our part for a sustainable customers conserve time and resources such as our and business partner awareness and adoption of eco- future. T Map phone-based navigation service. friendly practices in their daily jobs. Also offered to our business partners, we plan to extend this course to investee companies and other SK Group affiliates to Win-Win Partnerships 2

enhancing collaborating

strengthening

Enhancing partner competitiveness Raising the bar for responsibility Idea+ Festival, focusing on business opportunities As part of our commitment to helping our business Upholding high CSR standards across the value in China as well as mobile content and applications We are working partners strengthen their competitiveness, we offer chain is an important mission as we strive to in 2009. Starting in 2010, we will begin providing various R&D and financial assistance programs. improve our own CSR performance. We offer our overseas public relations and marketing support for ever closer with In 2009, we relocated and expanded our Mobile partners a number of online education programs our business partners with world-class technology Device Test Center, doubling the capacity of this covering sexual harassment prevention and ethics to help them get a foothold in global markets. our business no-cost test-bed and technical support facility to management to help raise awareness of human 200,000 partner employees annually. In addition to rights, labor standards, and corruption issues. During Building winning partnerships partners as we providing developers with loans totaling KRW 105.4 partner evaluations, we apply our internal CSR We are working hard to create win-win partnerships billion during the year through a number of support standards covering the environment, labor practices, built on fair and transparent business relationships. strive to create and incentive programs, we also participated in the and human rights. Backed by a survey of the level Since 2007, our Business Partner Satisfaction Index group-wide SK Win-Win Internship program, placing of CSR performance at all business partners in late survey has helped us track partner satisfaction and open, collaborative 516 outstanding applicants at fully paid one-year 2009, we are now in the process of expanding our progressively identify and remedy areas of weakness. internships at partner companies. support programs to help our partners raise their In addition to fully complying with Korea Fair Trade relationships. Comprehensive training programs are frequently CSR performance across the board. Commission guidelines, we continue to manage beyond the resources of small and medium and improve our partner support infrastructure by businesses. We currently offer more than 100 online Strengthening open collaboration expanding channels of communication and our training courses covering technical and marketing We are embracing the Web 2.0 values of openness, partner relationship management system as we build fields, serving over 24,000 partner employees in collaboration, and sharing to create more win-win strong relationships of trust with each partner. 2009. We also offer over ten offline training courses business opportunities for all. We have solicited on IT and general business issues for our most ideas via our partner support site since 2008 to stay valuable partners. We plan to establish a mobile in tune with what our partners are thinking. Over the technology training center in 2010 to provide our past two years, we have received over 300 ideas partners with access to the latest, most-advanced annually, four of which debuted as commercial technologies at no additional charge. products in 2009. We also continue to hold our Open

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069 SK TELECOM ANNUAL REPORT 2009

Customer Protection 3

SOCIAL RESPONSIBILITIES serving

LEGAL RESPONSIBILITIES

satisfying protecting

Major Customer Protection Activities cancellation Registration notification Information Protection Protection Prevention False name DATA usag e Customer Customer Spam Teen

Managing the customer experience to prevent spam and voice phishing, dramatically help parents protect their children from inappropriate With the Korean mobile communications market now reducing the volume of related customer complaints. content, blocking direct access to adult content we are working at the saturation point and technologically mature, We practice customer-oriented product life-cycle in 2006 and adding a filtering service for harmful delivering a compelling and unique customer management from concept to retirement to ensure content in 2008. We also help parents manage their to make mobile experience is becoming even more essential to the highest possible level of customer satisfaction. children’s phone usage by including limits on data continued growth. In 2009, we took our customer- In 2009, we significantly tightened our screening usage in flat-rate plans and providing them with lifestyles more oriented business philosophy and strategy to the requirements. All products must now pass an regular billing updates via SMS. The disabled and next level by adopting and implementing a customer internal screening process as part of our efforts to elderly are another customer segment we have enjoyable, secure, experience management (CEM) strategy. Focused ensure the best possible customer experience at focused on serving with special rate plans and on eliminating poor customer experiences and launch. customer service. Last, but not least, we are working and affordable maximizing good ones, the strategy helped us to make communication more affordable for low- once again top the National Customer Satisfaction Ensuring customer privacy income customers by waiving subscription fees and for all. Index (NCSI) for a remarkable 13th straight year. We With rising public awareness of consumer privacy reducing basic service and call rates. believe CEM is the key to driving growth in today’s issues, we took our privacy commitment to the saturated and competitive marketplace. next level in 2009 by announcing a master plan to ensure customer privacy and creating the position Satisfying our customers of Chief Privacy Officer (CPO). We also adopted an In addition to offering a number of flat-rate data authentication system for customer data requests as plans that free our customers from worrying about we stepped up both ongoing training and monitoring metered data charges, we provide regular SMS in pursuit of our goal of zero customer data updates on data usage to help customers keep track breaches. of their usage and avoid surprises on their phone bills. We also offer seven complementary value- Protecting and serving the vulnerable added text and voice filtering and blocking services In recent years, we have taken a number of steps to Community happy change Involvement happy 4 participation

happy together

Serving local communities Expanding the social safety net Serving the world Public expectations of corporations have grown far Our mobile communications technology and Wherever we do business, we are involved in we are using mobile beyond simply generating profits and jobs. Based on infrastructure is doing a world of good. The Mobile making local communities better places to live. In three mottos—Happy Change, Happy Together, and Search for Missing Persons service has helped reunite January 2008, we created the SK Fund with the technology to make Happy Participation—our community commitment is 21 lost or missing persons with their families since Communist Youth League of China to sponsor playing a key role in helping resolve some of today’s 2004, while our mobile charity fundraising platform educational programs such as “KAB” (Knowledge the world a better, fundamental social issues. In 2009, we continued to has raised over KRW 340 million for nongovernmental about Business) for young adults. In September leverage our resources to help make our communities organizations since 2005. Our 24-hour text-counseling 2009, we joined local residents of the city of brighter place. and the world a better place to live, bridging the service helps troubled teens all over the country, Pengzhou for the opening of the Sichuan SK Happy digital divide, expanding the social safety net, and and our emergency alert service informs subscribers School, giving new hope to children and families that empowering the underprivileged to live and support of major disasters at home or abroad. In 2009, survived the deadly earthquake that stuck China’s themselves with dignity. we launched the T-together portal to publicize our Sichuan province in May 2008. community involvement programs, and invite our We have also been very active in Vietnam over Making the most of mobile technology customers to participate. the years. In 2007, we established the SK Telecom We sponsor a variety of educational programs and IT Center in Ho Chi Minh City to help foster events to help seniors, the disabled, North Korean Helping the underprivileged help tomorrow’s IT professionals. We have also set up defectors, and teens to make the best use of themselves SK Telecom Libraries at major universities nationwide mobile technology. We have worked with the Korea Back in 2005, we established the SK Nanum to provide a learning resource center for Vietnam’s Association of Senior Welfare Centers since 2007 to Foundation to help the underprivileged live and next generation since 2006. Last, but not least, our help seniors learn to use their phones, serving over support themselves with dignity. Our SK Happy Meal signature community involvement program— 3,000 seniors through 2009. We have also partnered Box program not only provides nutritious meals free free corrective surgeries of congenital facial with the Beautiful School Movement to promote of charge to the needy, but has also created job deformities—has helped put smiles back on the faces constructive mobile phone use among teens. opportunities in 29 centers nationwide. Our SK of a total of 2,702 Vietnamese children since 1996. Happy School programs offer underprivileged teens opportunities to learn vocational skills in the fields of cooking, music, theater, and auto repair. We also partner with government and NGOs to provide educational, work, and cultural opportunities to teens through the 1318 Happy Zone project. Together, these efforts have resulted in the creation of more than 7,300 jobs for the underprivileged to date.

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071 SK TELECOM ANNUAL REPORT 2009

Ethics Management 5

trust

IMPLEMENTATION CODE OF ETHICS GUIDELINES responsibility

Ethics Management

integrity

Issues & Answers

Managing with integrity which embodies the SK Management System empowering them to define their ethical issues and The most fundamental role and responsibility (SKMS). We strive to instill a firm commitment to critically evaluate performance to raise the level of we are building businesses have to society is the ethical pursuit of ethical excellence at all levels of management internal discipline as we aim to take our commitment profitability that leads to sustainable growth and through education and dialogue as well as to integrity to the next level. the foundation development. Since establishing a comprehensive consistently communicating the importance of organizational framework for ethics management in integrity to all employees through our in-house TV Enhancing ethical oversight for trust and 2004 and joining the UN Global Compact in 2007, we channel, webzines, and other mediums. We also Our internal control system fully complies with have steadily and systematically fostered a culture of provide practical, concrete guidelines for handling US Sarbanes-Oxley Act requirements. In addition sustainable integrity that measures up to global standards. Over various ethical issues through compilations of to providing ethics counseling to employees, we the past few years, we have continued to strengthen common ethical issues and answers. operate a direct reporting system that forwards all growth with monitoring of ethical issues, raise our standards reports of unfair trade or solicitation to the Audit of conduct, and improve guidance. Starting in Education with integrity Committee and Ethical Counseling Center for integrity. 2009, we have revamped our ethics education Ongoing education plays a key role of our ethics review. In 2010, we will step up publicity of ethical program to provide position-relevant training as our management system. We offer online and offline counseling and reporting channels as well as activities focus on the workplace, shifting authority education programs for our employees and business improve whistleblower protections as we aim for a and responsibility downward to the individual partners. Since the completion of ethics education higher level of ethical excellence. organizational unit level. for our entire workforce in 2007, we have shifted our focus to the organizational unit level to tackle Practicing excellence in ethics the unique issues each unit faces, and increase Since adopting our code of ethics in 2002, we have employee buy-in. We are now operating education implemented a code of conduct and decision- programs tailored specifically for executives, making guidelines to help our employees avoid incoming team leaders, group leaders, and new unethical behavior. All employees begin each year hires. Beginning in 2010, we will be evaluating and by pledging to follow the SK Telecom code of ethics, giving feedback on ethical performance to each unit, DISCLAIMER All SK Telecom products and services mentioned The information in this annual report does not constitute an offer to sell or the solicitation of an offer to buy any securities and should not be relied in this publication are the property of SK Telecom. upon in connection with any investment decision. With the exception of historical information, the matters discussed in the materials and documents of this annual report contain assumptions and forward-looking statements regarding the future prospects of SK Telecom, involving growth initiatives, Published by SK Telecom profit figures, strategies and objectives. The risks and uncertainties inherent in all statements regarding the future can lead to actual profits and Coordinated by Hosook Hwang, Hyunyoung Jung Paper: The SK Telecom 2009 Annual Report is printed on Eco-plus and Garda, which are development deviating substantially from what has been expressed or implied. For a more detailed description of these risks, uncertainties and other Created by S/O Project: www.soproject.com factors, see SK Telecom’s filings with the U.S. Securities and Exchange Commission (and in particular its most recent annual report on Form 20-F). ECF (element chlorine free) paper. All paper used in this document is acid-free and FSC- Planned by INCA Communications certified. The FSC logo identifies products that contain wood from well-managed forests SK Telecom disclaims any intention or obligation to update or revise any forward-looking statements. Moreover, SK Telecom in no way guarantees that Written by Kevin Newhart and other controlled sources certified in accordance with the rules of the Forest Stewardship the information made available here is complete, accurate or up-to-date in all cases. Photography by Leem Studio Council. Printer holds FSC Chain of Custody [Certificate number DNV-COC-000176]. PRoductivity rising