On Oct 7, we upgraded the stock of
SK Telecom Co. Ltd.
) to Outperform. In the recently concluded second quarter, both
its top and bottom lines outpaced the Zacks Consensus Estimate.
Apart from strong financial results, solid subscriber growth and
aggressive deployment of LTE and the new LTE-Advanced services
have resulted in such upgrades.
Why the Upgrade?
SK Telecom continues to maintain its leading position in the
Korean wireless market. We believe that strong smartphone
offerings, 3G network, 4G LTE network expansions and the cloud
computing business will fuel the company's future growth. The
demand for smartphones and high-speed data services is growing
rapidly, leading to a growing requirement for wireless data
Additionally, SK Telecom's Apple iPhone 4 and iPad offerings
are gaining traction in the Korean market, driving revenues. Such
robust LTE customer growth will will facilitate the achievement
of the company's LTE subscriber target of 15 million by 2013.
SK Telecom unveiled the world's first LTE-Advanced (LTE-A)
network that renders speeds of up to 150 Mbps, which is twice as
fast as LTE and 10 times swifter than 3G network. Management has
already commercialized the newly launched network across the
Seoul region and the central cities of Gyeonggi-do and
Chungcheong-do, with plans to extend the coverage to 84 cities
across the nation.
Along with network expansion, the company is also offering
LTE-A friendly handset - Samsung Galaxy S4 LTE-A - and aims to
bring in seven more smartphones in the later half of 2013.
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The company is also investing heavily in high-speed Wi-Fi and
data femtocell to boost network capacity in small areas.
Additionally, SK Telecom is concentrating on deploying 5G Wi-Fi
hotspot routers in Korea. The company collaborated with the
leading semi-conductor solutions provider -
) - to launch the first 5G Wi-Fi hotspot router to ensure
reliable and faster connectivity.
Currently, SK Telecom carries a Zacks Rank #1 (Strong Buy).
Other Stocks Outlook in Related
Related stocks belonging to the same industry are
Cellcom Israel Ltd.
NTT DOCOMO, Inc.
). Both, KT Corp. and NTT DOCOMO carry a Zacks Rank #2 (Buy)
while Cellcom Israel carries a Zacks Rank #1 (Strong Buy).