20-F

As filed with the Securities and Exchange Commission on April 29, 2024

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 20-F

(Mark One)

☐	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended <br><br>December 31, 2023
---

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

For the transition period from to

Commission file number 1-14418

SK Telecom Co., Ltd.

(Exact name of Registrant as specified in its charter)

SK Telecom Co., Ltd.

(Translation of Registrant’s name into English)

The Republic of Korea

(Jurisdiction of incorporation or organization)

SK T-Tower

6 5, Eulji-ro

, Jung-gu, Seoul 04539, Korea

(Address of principal executive offices)

Ms. Haejo Chae

65, Eulji-ro, Jung-gu, Seoul 04539, Korea

Telephone No.: +82-2-6100-2114

Facsimile No.: +82-2-6100-7830

(Name, telephone, email and/or facsimile number and address of company contact person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
American Depositary Shares, each representing<br><br>five-ninths<br> of one share of Common Stock	SKM	New York Stock Exchange
Common Stock, par value<br><br>W<br><br><br><br>100 per share	SKM	New York Stock Exchange*
*	Not for trading, but only in connection with the registration of the American Depositary Shares.
---	---

Securities registered or to be registered pursuant to Section 12(g) of the Act.

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

212,699,730 shares of common stock, par value

100 per share (not including 6,133,414 shares of common stock held by the company as treasury shares).

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes

☒

☐

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes

☐

☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

☒

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T ((§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes

☒

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Emerging growth company ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☐

International Financial Reporting Standards as issued by the International Accounting Standards Board ☒

Other ☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

☐

☒

Auditor Name: Ernst & Young Han Young	Auditor Location: Seoul, Korea	Auditor Firm ID: 1437

CERTAIN DEFINED TERMS AND CONVENTIONS USED IN THIS ANNUAL REPORT	1
FORWARD-LOOKING STATEMENTS	2
Part I	4
Item 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	4
Item 1.A. Directors and Senior Management	4
Item 1.B. Advisers	4
Item 1.C. Auditors	4
Item 2. OFFER STATISTICS AND EXPECTED TIMETABLE	4
Item 3. KEY INFORMATION	4
Item 3.A. [Reserved]	4
Item 3.B. Capitalization and Indebtedness	4
Item 3.C. Reasons for the Offer and Use of Proceeds	4
Item 3.D. Risk Factors	4
Item 4. INFORMATION ON THE COMPANY	22
Item 4.A. History and Development of the Company	22
Item 4.B. Business Overview	25
Item 4.C. Organizational Structure	49
Item 4.D. Property, Plants and Equipment	49
Item 4A. UNRESOLVED STAFF COMMENTS	50
Item 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS	50
Item 5.A. Operating Results	50
Item 5.B. Liquidity and Capital Resources	63
Item 5.C. Research and Development, Patents and Licenses, etc	69
Item 5.D. Trend Information	70
Item 5.E. Critical Accounting Estimates	70
Item 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	70
Item 6.A. Directors and Senior Management	70
Item 6.B. Compensation	76
Item 6.C. Board Practices	79
Item 6.D. Employees	81
Item 6.E. Share Ownership	82
Item 6.F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation	84
Item 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	84
Item 7.A. Major Shareholders	84
Item 7.B. Related Party Transactions	85
Item 7.C. Interests of Experts and Counsel	86
Item 8. FINANCIAL INFORMATION	86
Item 8.A. Consolidated Statements and Other Financial Information	86
Item 8.B. Significant Changes	88
Item 9. THE OFFER AND LISTING	88
Item 9.A. Offering and Listing Details	88
Item 9.B. Plan of Distribution	88
Item 9.C. Markets	89
Item 9.D. Selling Shareholders	89
Item 9.E. Dilution	89
Item 9.F. Expenses of the Issue	89
Item 10. ADDITIONAL INFORMATION	89
Item 10.A. Share Capital	89
Item 10.B. Memorandum and Articles of Association	89

(i)

Item 10.C. Material Contracts	95
Item 10.D. Exchange Controls	96
Item 10.E. Taxation	101
Item 10.F. Dividends and Paying Agents	107
Item 10.G. Statements by Experts	107
Item 10.H. Documents on Display	107
Item 10.I. Subsidiary Information	108
Item 10.J. Annual Report to Security Holders	108
Item 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	108
Item 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	110
Item 12.A. Debt Securities	110
Item 12.B. Warrants and Rights	110
Item 12.C. Other Securities	110
Item 12.D. American Depositary Shares	110
Part II	111
Item 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	111
Item 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	111
Item 15. CONTROLS AND PROCEDURES	111
Item 16. RESERVED	112
Item 16A. AUDIT COMMITTEE FINANCIAL EXPERT	112
Item 16B. CODE OF ETHICS	112
Item 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES	112
Item 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES	113
Item 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS	113
Item 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT	113
Item 16G. CORPORATE GOVERNANCE	114
Item 16H. MINE SAFETY DISCLOSURE	115
Item 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS	115
Item 16J. INSIDER TRADING POLICIES	115
Item 16K. CYBERSECURITY	116
Part III	118
Item 17. FINANCIAL STATEMENTS	118
Item 18. FINANCIAL STATEMENTS	118
Item 19. EXHIBITS	119

(ii)

CERTAIN DEFINED TERMS AND CONVENTIONS USED IN THIS ANNUAL REPORT

All references to “Korea” contained in this annual report shall mean The Republic of Korea. All references to the “Government” shall mean the government of The Republic of Korea. All references to “we,” “us,” or “our” shall mean SK Telecom Co., Ltd. and, unless the context otherwise requires, its consolidated subsidiaries. References to “SK Telecom” shall mean SK Telecom Co., Ltd., but shall not include its consolidated subsidiaries. All references to “U.S.” shall mean the United States of America.

All references to “MHz” contained in this annual report shall mean megahertz, a unit of frequency denoting one million cycles per second. All references to “GHz” shall mean gigahertz, a unit of frequency denoting one billion cycles per second. All references to “Kbps” shall mean one thousand bits per second, all references to “Mbps” shall mean one million bits per second and all references to “Gbps” shall mean one billion bits per second. All references to “GB” shall mean gigabytes, which is one billion bytes. Any discrepancies in any table between totals and the sums of the amounts listed are due to rounding.

All references to “Won,” or “W” in this annual report are to the currency of Korea and all references to “Dollars,” “U.S. dollar” or “US$” are to the currency of the United States of America.

The Ministry of Science and ICT (the “MSIT”) is charged with regulating information and telecommunications, and the Korea Communications Commission (the “KCC”) is charged with regulating the public interest aspects of and fairness in broadcasting. Subscriber information for the wireless and fixed-line telecommunications industry set forth in this annual report are derived from information published by the MSIT unless expressly stated otherwise.

The consolidated financial statements included in this annual report are prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (the “IASB”). As such, we make an explicit and unreserved statement of compliance with IFRS, as issued by the IASB, with respect to our consolidated financial statements as of December 31, 2023 and 2022, and for the years ended December 31, 2023, 2022 and 2021, included in this annual report.

Unless expressly stated otherwise, all financial data included in this annual report are presented on a consolidated basis.

Effective as of November 1, 2021, we conducted a horizontal spin-off (the “Spin-off”) of our businesses related to the management of our equity interests in certain subsidiaries and investees (the “Spin-off Portfolio Companies”) engaged in the semiconductor and certain other non-telecommunications businesses, including security, e-commerce and other new information and communications technologies (“ICT”) businesses (the “Spin-off Businesses”). The Spin-off was accomplished through the establishment of a new company named SK square Co., Ltd. (“SK Square”), to which our equity interests in the Spin-off Portfolio Companies were transferred, and we distributed SK Square’s shares of common stock on a pro rata basis to the holders of our common stock. As a result of the Spin-off, our business operations relating to the Spin-off Businesses have been accounted for as discontinued operations in our consolidated financial statements for the years ended December 31, 2023, 2022 and 2021, included in this annual report.

As part of the Spin-off, all of our equity interests in SK hynix Inc. (“SK Hynix”) were transferred to SK Square, effective as of November 1, 2021. As a result, the consolidated financial statements of SK Hynix incorporated by reference in this annual report are as of and for the ten months ended October 31, 2021, pursuant to, and in accordance with, the requirements of Rule 3.09 of Regulation S-X of the U.S. Securities Act of 1933, as amended (the “Securities Act”).

FORWARD-LOOKING STATEMENTS

This report contains “forward-looking statements,” as defined in Section 27A of the Securities Act, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are based on our current expectations, assumptions, estimates and projections about our company and our industry. The forward-looking statements are subject to various risks and uncertainties. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “anticipate,” “believe,” “considering,” “depends,” “estimate,” “expect,” “intend,” “plan,” “planning,” “planned,” “project” and similar expressions, or that certain events, actions or results “may,” “might,” “should” or “could” occur, be taken or be achieved.

Forward-looking statements in this annual report include, but are not limited to, statements about the following:

•	our ability to anticipate and respond to various competitive factors affecting the telecommunications industry, including new services that may be introduced, changes in consumer preferences, economic conditions and discount pricing strategies by competitors;
•	our continued implementation of fifth generation wireless technology, which we refer to as “5G” technology;
---	---
•	our plans for capital expenditures in 2024 for a range of projects, including investments to further expand and improve our 5G network, investments to maintain our fourth generation long-term evolution (“LTE”) network and related services, investments to improve and expand our Wi-Fi network, investments to develop our Internet of Things (“IoT”) solutions and platform services business portfolio, including artificial intelligence (“AI”) solutions, investments in data infrastructure, investments in further research and development of 5G technology, investments in businesses that can potentially leverage our 5G network, and funding for mid- to long-term research and development projects, as well as other initiatives related to the development of new growth businesses and our ongoing businesses in the ordinary course, in each case with an emphasis on incorporating AI technology into our various existing and new business areas;
---	---
•	our efforts to make significant investments to build, develop and broaden our businesses, including our next-generation growth businesses in cloud computing, data centers, smart factories, subscription services, metaverse, media, platform, AI solutions, enterprise AI services and other innovative products and services, as well as to actively integrate AI technology generally into, and create synergies among, our various businesses;
---	---
•	our ability to comply with governmental rules and regulations, including the regulations of the Government related to telecommunications providers, rules related to our status as a “market-dominating business entity” under the Korean Monopoly Regulation and Fair Trade Act (the “Fair Trade Act”) and the effectiveness of steps we have taken to comply with such regulations;
---	---
•	our ability to effectively manage our bandwidth and to timely and efficiently implement new bandwidth-efficient technologies and our intention to participate in, and acquire additional bandwidth pursuant to, frequency bandwidth auctions held, or other allocations of bandwidth, by the MSIT;
---	---
•	our expectations and estimates related to interconnection fees, rates charged by our competitors, regulatory fees, operating costs and expenditures, working capital requirements, principal repayment obligations with respect to long-term borrowings, bonds and short-term borrowings, and research and development expenditures and other financial estimates;
---	---
•	the success of our various joint ventures, investments, strategic alliances and cooperation efforts as well as other corporate restructuring activities, including the Spin-off;
---	---
•	our ability to successfully attract and retain subscribers of our telecommunications-related businesses and customers of our other businesses; and
---	---

•	the growth of the telecommunications and other industries in which we operate in Korea and other markets and the effect that economic, political or social conditions have on our number of subscribers and customers and results of operations.

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, as a result, the forward-looking statements based on those assumptions could be incorrect. Risks and uncertainties associated with our business include, but are not limited to, risks related to changes in the regulatory environment, technology changes, potential litigation and governmental actions, changes in the competitive environment, political changes, foreign exchange currency risks, foreign ownership limitations, credit risks and other risks and uncertainties that are more fully described under the heading “Item 3.D. Risk Factors” and elsewhere in this annual report. 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 forward-looking statements. We do not undertake to release the results of any revisions of these forward-looking statements to reflect future events or circumstances.

PART I

Item 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Item 1.A.	Directors and Senior Management
---	---

Not applicable.

Item 1.B.	Advisers

Not applicable.

Item 1.C.	Auditors

Not applicable.

Item 2.	OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

Item 3.	KEY INFORMATION
Item 3.A.	[Reserved]
---	---
Item 3.B.	Capitalization and Indebtedness
---	---

Not applicable.

Item 3.C.	Reasons for the Offer and Use of Proceeds

Not applicable.

Item 3.D.	Risk Factors

Risks Relating to Our Business

Competition may reduce our market share and harm our business, financial condition and results of operations.

We face substantial competition across all of our businesses, including our wireless telecommunications business. We expect competition to remain intense as new technologies, products and services are developed and introduced by us and our competitors. We expect that such trends will continue to put downward pressure on the rates we can charge our subscribers.

Historically, there has been considerable consolidation in the telecommunications industry, resulting in the current competitive landscape comprising three mobile and fixed network operators in the Korean market, us, KT Corporation (“KT”) and LG Uplus Corp. (“LG U+”). Each of our competitors has substantial financial, technical, marketing and other resources to respond to our business offerings. As of December 31, 2023, the collective market share of KT and LG U+ amounted to approximately 59.3% in terms of number of wireless subscribers (including an aggregate of 16.3% attributable to mobile virtual network operators (“MVNOs”) that lease KT’s and LG U+’s respective networks) compared to 56.8% (including an aggregate of 13.8% attributable to MVNOs) as of December 31, 2022. Such increase in the collective market share of KT and LG U+ was mainly attributable to an increase in the market share of MVNOs that lease LG U+’s network.

Our competitors for subscriber activations include MVNOs, including MVNOs that lease our networks. MVNOs generally provide rate plans that are relatively cheaper than similar rate plans of the wireless network providers from which they lease their networks, including us. In recent years, a number of new entrants have entered the MVNO business, including affiliates of leading financial institutions in Korea. Some of these new entrants have engaged in aggressive marketing campaigns and promotional discounts while leveraging the brand power of their affiliates as part of their efforts to gain subscribers. Partly as a result of such efforts, the combined market share of MVNOs has increased in recent years from 14.4% as of December 31, 2021 to 16.9% as of December 31, 2022 and 19.2% as of December 31, 2023, in terms of number of subscribers. In addition, other companies may enter the wireless network services market. For example, in January 2024, the Government allocated 800 MHz of bandwidth in the 28 GHz spectrum to Stage X, a consortium led by Stage Five, an MVNO, to provide nationwide wireless network services. Stage X is required, among other things, to install 6,000 base stations across Korea that use the 28 GHz spectrum by 2027.

We believe that a continued increase in the market share of MVNOs (including through the entrance of new MVNOs, if any) and the entrance of new mobile network operators (including in connection with the allocation of 800 MHz of bandwidth in the 28 GHz spectrum in January 2024 to Stage X), if any, in the wireless telecommunications market may further increase competition in the telecommunications sector, as well as cause downward price pressure on the fees we charge for our services, which, in turn, may have a material adverse effect on our business, financial position and results of operations. See “— Our business, financial condition and results of operations may be adversely affected if we fail to acquire adequate additional frequency usage rights or use our bandwidth efficiently to accommodate subscriber growth and subscriber usage” and “— Our businesses are subject to various types of Government regulation, and any change in Government policy relating to the telecommunications industry could have an adverse effect on our business, financial condition and results of operations.”

Our fixed-line telephone service competes with KT and LG U+, as well as other providers of voice over Internet protocol (“VoIP”) services. As of December 31, 2023, our market share of the fixed-line telephone and VoIP service market was 15.7% (including the services provided by SK Broadband Co., Ltd. (“SK Broadband”)) in terms of number of subscribers compared to KT with 54.2% and LG U+ with 18.7%. In addition, our broadband Internet access, Internet protocol TV (“IPTV”) and cable TV services provided through SK Broadband compete with other providers of such services, including KT, LG U+ and cable companies. Furthermore, our IPTV and cable TV services are facing an increasing level of competition from global operators of online video streaming platforms, such as YouTube, Netflix, Disney Plus and Apple TV, leading domestic video streaming platforms such as TVING, Wavve (which is seeking to merge with TVING pursuant to a memorandum of understanding entered into in December 2023), Coupang Play and Watcha, and the video services offered by leading domestic online and mobile search and communications platforms including NAVER and Kakao, as such services continue to become increasingly popular to serve as a substitute to traditional television programming. As of December 31, 2023, our market share of the broadband Internet market was 28.7% in terms of number of subscribers compared to KT with 40.8% and LG U+ with 21.4%. As of December 31, 2023, our market share of the pay TV market (which includes IPTV, cable TV and satellite TV) was 26.1% compared to KT with 36.5% (including its IPTV, cable TV and satellite TV services) and LG U+ with 24.7% (including its IPTV and cable TV services), and the collective market share of other pay TV providers was 12.8%.

Over the past few years, the Korean fixed-line telecommunications industry has gone through significant consolidation involving major pay television service providers. In April 2020, we completed the merger of Tbroad Co., Ltd., a former leading cable television and other fixed-line telecommunications services provider in Korea, and two of its subsidiaries, Tbroad Dongdaemun Broadcasting Co., Ltd. and Korea Digital Cable Media Center Co. Ltd. (collectively, “Tbroad”), with and into SK Broadband. In the same month, SK Telecom acquired a 55.0% equity interest in Broadband Nowon Co., Ltd. (formerly known as Tbroad Nowon Broadcasting Co., Ltd.), another subsidiary of Tbroad Co., Ltd., which was subsequently merged with and into SK Broadband in October 2022. Following such transactions (the “Tbroad Merger”), we owned approximately 74.4% of SK

Broadband’s total outstanding shares as of December 31, 2023 and were the second-largest pay TV provider in Korea in terms of number of subscribers as of December 31, 2023. In December 2019, LG U+ acquired a majority equity stake in CJ Hello Co., Ltd. and changed the acquired company’s name to LG HelloVision Co., Ltd. (“LG HelloVision”). In August 2021, KT acquired HCN Co., Ltd. (“HCN”), a major Korean cable TV service provider, through its subsidiary KT Skylife Co., Ltd. (“KT Skylife”). Such transactions, as well as further consolidation in the fixed-line telecommunications industry, may result in increased competition, as the entities emerging from such consolidation and other remaining players in the industry may actively pursue expanding or protecting their respective market shares.

Furthermore, the Government has historically enforced regulations on cable TV and IPTV service providers that prohibited them from having a market share of more than one-third of the total number of subscribers in the relevant pay TV market on each of their respective platforms. In June 2015, the Government amended the regulation to impose the same limit on the market share of the entire pay TV market, including satellite TV service providers as well. Such amended regulation, however, expired in June 2018.

Continued competition from other wireless and fixed-line telecommunications service providers has also resulted in, and may continue to result in, deactivations among our subscribers. A substantial level of subscriber deactivations, or churn, may significantly harm our business, financial condition and results of operations. In 2023, the monthly churn rate in our wireless telecommunications business ranged from 0.7% to 0.9%, with an average monthly churn rate of 0.8%, which remained unchanged compared to 2022. Intensification of competition in the future may cause our churn rates to increase, which in turn may cause us to increase our marketing expenses as a percentage of sales to attract and retain subscribers.

As we continue to expand our business into areas beyond the traditional wireless and fixed-line telecommunications businesses, we also face competition from major players in the relevant sectors, such as cloud services, data center services, smart factories, metaverse, online commerce and television shopping (“T-commerce”). Some of our competitors may have stronger brand recognition, more robust technological capabilities and/or more significant financial resources than us in their respective areas of business.

Our ability to compete successfully in all of the businesses in which we operate will depend on our ability to anticipate and respond to various competitive factors affecting the respective industries, including new services that may be introduced, changes in consumer preferences, economic conditions and discount pricing strategies by competitors.

Inability to successfully implement or adapt our network and technology to meet the continuing technological advancements affecting the wireless telecommunications industry will likely have a material adverse effect on our business, financial condition and results of operations.

The telecommunications industry has been characterized by continual improvements and advances in technology, and this trend is expected to continue. We and our competitors have continually implemented technology upgrades from our basic code division multiple access (“CDMA”) network to our wideband code division multiple access (“WCDMA”) network, and subsequently to the currently dominant LTE and 5G technologies. Our business could be harmed if we fail to implement, or adapt to, future technological advancements in the telecommunications sector in a timely manner, such as the continued implementation and enhancement of 5G technology and the eventual development and implementation of a successor technology to 5G technology. We launched wireless service plans using the 5G network in April 2019 following the commencement of sales of the first 5G-compatible smartphones, and we are in the process of further expanding our 5G network coverage. Our 5G network coverage currently includes all of the major metropolitan and other urban areas, as well as subway lines, in Korea, and we have been expanding our 5G network coverage in rural areas by constructing 5G networks that are shared with other mobile network operators in such areas. We expect to be able to provide full nationwide outdoor terrestrial coverage and substantially full nationwide coverage in large buildings by the end of 2024. KT and LG U+ also rolled out their respective 5G wireless service plans in

April 2019. The more successful operation of a 5G network or development of improved 5G technology by a competitor, including better market acceptance or network quality of a competitor’s 5G services, could materially and adversely affect our existing wireless telecommunications businesses as well as the returns on future investments we may make in our 5G network or our other businesses.

In addition to introducing new technologies and offerings, we must phase out outdated and unprofitable technologies and services. For example, we discontinued our wireless broadband Internet access (“WiBro”) services in January 2019 and our second generation CDMA wireless services in July 2020. If we are unable to introduce new technologies and offerings on a cost-effective and timely basis, our business, financial condition and results of operations could be adversely affected.

Implementation of new wireless technology and enhancement of existing wireless technology have required, and may continue to require, significant capital and other expenditures, which we may not recoup.

We have made, and intend to continue to make, capital investments to develop, launch and enhance our wireless service. In 2023, 2022 and 2021, we spent Won 1,380.6 billion, Won 1,833.4 billion and Won 1,850.9 billion, respectively, in capital expenditures to build and enhance our wireless networks. We plan to make further capital investments related to our wireless services in the future, including services that can potentially leverage our 5G network and enhance the service quality of our 5G network, including through the development and application of AI technology. In addition, we plan to continue expanding and maintaining our 5G network as described above, while also maintaining our LTE network, which we expect will continue to be used by a significant portion of our subscriber base in the near future, despite the ongoing expansion of the 5G network and gradual migration of wireless service users to the 5G network over time. Our wireless technology-related investment plans are subject to change, and will depend, in part, on market demand for 5G and LTE services, the competitive landscape for provision of such services and the development of competing technologies. There may not be sufficient demand for services based on our latest wireless technologies, as a result of competition or otherwise, to permit us to recoup or profit from our wireless technology-related capital investments.

Our businesses are subject to various types of Government regulation, and any change in Government policy relating to the telecommunications industry could have an adverse effect on our business, financial condition and results of operations.

Our businesses are generally subject to governmental supervision and various types of regulation.

Rate Regulation. The Government has periodically reviewed the rates charged by wireless telecommunications service providers and has, from time to time, released public policy guidelines or suggested rate reductions. Although these guidelines or suggestions were not binding, we have implemented some rate reductions in response to them. For example, under the Mobile Device Distribution Improvement Act (“MDDIA”), wireless telecommunications service providers are obliged to provide certain benefits, such as discounted rates, to subscribers who subscribe to their service without receiving subsidies. In June 2017, the State Affairs Planning Advisory Committee of Korea announced that it would encourage wireless telecommunications service providers, including us, to increase the applicable discount rate offered to subscribers from 20% to 25%, which we adopted in September 2017, and to offer additional discounts to low income customers, including those on government welfare programs and senior citizen recipients of the basic pension, which we implemented in December 2017 and July 2018, respectively. While the Government indicated in January 2024 that it will seek to abolish the MDDIA in order to encourage wireless service providers to offer more differentiated customer benefits to consumers, it has also suggested that such discounted rates may be retained through a related amendment to the Telecommunications Business Act. In connection with such policy objectives, the Government amended the Enforcement Decree of the MDDIA in March 2024, pursuant to which wireless telecommunications service providers may provide more liberal subsidies to subscribers that are switching their wireless telecommunications providers based on certain criteria specified by the KCC, including

the expected profits to the wireless telecommunications service providers and subscribers’ costs of switching wireless telecommunications service providers. See “Item 4.B. Business Overview — Law and Regulation — Rate Regulation” and “Item 5.A. Operating Results — Overview — Rate Regulations.” Such discounts have contributed to a general decrease in the monthly revenue per subscriber of our wireless telecommunications services. See “Item 5.A. Operating Results — Overview — Decrease in Monthly Revenue per Subscriber.” In July 2022, the MSIT requested wireless telecommunications service providers, including us, to introduce additional mid-tier 5G rate plans to provide 5G subscribers with more diverse and affordable rate plans that better meet their data usage patterns. We have since introduced several types of such new plans in 2022 and 2023. In November 2023, the MSIT requested wireless telecommunications service providers, including us, to provide 5G smartphone users with the option to subscribe to LTE plans, which we implemented in the same month. In addition, in January 2024, the MSIT requested wireless telecommunications service providers, including us, to introduce low-tier 5G rate plans priced under Won 40,000 per month, which we implemented in March 2024. The Government may suggest other policy initiatives relating to rate plans of wireless telecommunications service providers in the future and any further changes to our rate plans we make in response to such suggestion may adversely affect our profitability and results of operations.

Technology Standards. The Government also plays an active role in setting the timetable and quality standards for the adoption and implementation of new technologies to be used by telecommunications operators in Korea. For example, the Government provided such guidance in connection with the introduction of LTE and 5G technologies in the past. The Government may provide similar guidance or recommendations in connection with the adoption and implementation of technologies to be used in future telecommunications services, and it is possible that adherence to such guidance or recommendations promoted by the Government in the future may not provide us with the best commercial returns.

Frequency Allocation. The Government sets the policies regarding the use of frequencies and allocates the spectrum of frequencies used for wireless telecommunications. See “Item 4.B. Business Overview — Law and Regulation — Frequency Allocation.” The reallocation of the spectrum to our existing competitors or a new entrant to the wireless telecommunications business could increase competition among wireless telecommunications service providers, which may have an adverse effect on our business, financial condition and results of operations. See “— Our business, financial condition and results of operations may be adversely affected if we fail to acquire adequate additional frequency usage rights or use our bandwidth efficiently to accommodate subscriber growth and subscriber usage.”

MVNOs. Pursuant to the Telecommunications Business Act, certain wireless telecommunications service providers designated by the MSIT, which included only us, were required to lease their networks or allow use of their networks (collectively, a “wholesale lease”) by other network service providers, such as an MVNO, that have requested such a wholesale lease in order to provide their own services using the leased networks until September 2022. While such regulatory requirement expired in September 2022, we have continued to comply with such requirement pending future regulatory development, and in December 2023, a bill indefinitely extending such requirement was passed by the National Assembly. Currently, 14 MVNOs provide wireless telecommunications services using the networks leased from us. We believe that leasing a portion of our bandwidth capacity to an MVNO impairs our ability to use our bandwidth in ways that would generate maximum revenues and strengthens our MVNO competitors by granting them access and lowering their costs to enter into and operate in our markets. Accordingly, our profitability has been, and may continue to be, adversely affected.

Interconnection. Our wireless telecommunications services depend, in part, on our interconnection arrangements with domestic and international fixed-line and other wireless networks. Our interconnection arrangements, including the interconnection rates we pay and interconnection rates we charge, affect our revenues and operating results. The MSIT determines the basic framework for interconnection arrangements, including policies relating to interconnection rates in Korea. Such basic framework for interconnection arrangements has been changed several times in the past, and we cannot assure you that we will not be adversely affected by the MSIT’s interconnection policies and future changes to such policies. See “Item 4.B. Business Overview — Interconnection — Domestic Calls.”

Regulatory Action. The MSIT may revoke our licenses or suspend any of our businesses if we fail to comply with its rules, regulations and corrective orders, including the rules restricting beneficial ownership and control or any violation of the conditions of our licenses. Alternatively, in lieu of suspension of our business, the MSIT or, depending on the subject matter of the violation, the KCC may levy a monetary penalty of up to 3.0% of the average of our annual revenue for the preceding three fiscal years. Such penalties, which may include the revocation of cellular licenses, suspension of business or imposition of monetary penalties by the KCC, could have a material adverse effect on our business. We believe that we are currently in compliance with the material terms of all of our cellular licenses.

In addition, the Fair Trade Act provides for various regulations and restrictions enforced by the Korea Fair Trade Commission (the “KFTC”) to prohibit or restrict actions that impede competition and fair trade. From time to time, we have been, and may in the future be, subject to investigations by the KFTC relating to potential violations of such laws and regulations. See “Item 8.A. — Consolidated Statements and Other Financial Information — Legal Proceedings — KFTC Proceedings.” Any future determination by the KFTC that we have engaged in transactions that violate the fair trade laws and regulations may result in fines or other punitive measures and may have a material adverse effect on our business.

We are subject to additional regulations as a result of our dominant market position in the wireless telecommunications sector, which could harm our ability to compete effectively.

The Government endeavors to promote competition in the Korean telecommunications markets through measures designed to prevent a dominant service provider from exercising its market power and deterring the emergence and development of viable competitors. We have been designated by the MSIT as the “dominant network service provider” in respect of our wireless telecommunications business. As such, we are subject to additional regulations to which certain of our competitors are not subject. For example, the MSIT has fifteen days to object to any new rates and terms of service reported by us. See “Item 4.B. Business Overview — Law and Regulation — Rate Regulation.” The MSIT could also require us to charge higher usage rates than our competitors for future services or to take certain actions earlier than our competitors, as when the KCC required us to introduce number portability earlier than our competitors, KT and LG U+.

We also qualify as a “market-dominating business entity” under the Fair Trade Act, which subjects us to additional regulations and we are prohibited from engaging in any act of abusing our position as a market-dominating entity. See “Item 4.B. Business Overview — Law and Regulation — Competition Regulation.” The additional regulations to which we are subject have affected our competitiveness in the past and may materially hurt our profitability and impede our ability to compete effectively against our competitors in the future.

Occurrences of widespread infectious diseases, including any possible recurrence of COVID-19, may materially and adversely affect our business, financial condition and results of operations.

“COVID-19,” an infectious disease caused by severe acute respiratory syndrome coronavirus 2, was declared a “pandemic” by the World Health Organization in March 2020. In recent years, the global outbreak of COVID-19 had led to global economic and financial disruptions and had from time to time disrupted our business operations. While we do not believe that the COVID-19 pandemic has had a material adverse impact on our overall business to date, a future exacerbation of the COVID-19 pandemic or other types of widespread infectious diseases may result in disruption in the normal operations of our business.

We are subject to a number of risks, including but not limited to:

•	an increase in unemployment among, and/or a decrease in disposable income of, our customers, who may not be able to meet payment obligations or otherwise choose to decrease their spending levels, which in turn may decrease demand for some of our products and services or cause an increase in delinquent subscriber accounts;
•	a slowdown in the rate of subscriber migration to our 5G service, which generally entails higher-priced subscription plans and wireless devices;
---	---

•	disruptions in operations, and/or a decrease in the demand for products and services, of our corporate customers, which in turn may decrease such customers’ demand for our services and products;
•	service disruptions, outages and performance problems due to capacity constraints caused by an overwhelming number of people accessing our services simultaneously;
---	---
•	disruptions in the supply of mobile handsets or telecommunications equipment from our vendors (or components of such mobile handsets and equipment such as semiconductors) as well as in the installation of our network infrastructure;
---	---
•	continued instability in global and Korean financial markets, which may adversely affect our ability to meet capital funding needs on a timely and cost-effective basis;
---	---
•	a decrease in the fair value of our investments in companies that may be adversely affected by the pandemic; and
---	---
•	depreciation of the Won against major foreign currencies, which in turn may increase the cost of imported equipment necessary for expansion and enhancement of our telecommunications infrastructure.
---	---

In the event that a future recurrence of COVID-19 or other types of widespread infectious diseases cannot be effectively and timely contained, our business, financial condition and results of operations may be adversely affected.

We may fail to successfully complete, integrate or realize the anticipated benefits of our new acquisitions, joint ventures or other strategic alternatives or corporate reorganizations, including the Spin-off, and such transactions may negatively impact our business.

We continue to seek opportunities to develop new businesses that we believe are complementary to our existing product and service portfolio and expand our global business through selective acquisitions. We also continue to seek ways to optimize our corporate structure to maximize the value of our traditional businesses on the one hand and newly developed businesses on the other hand. Accordingly, we are often engaged in evaluating potential transactions and other strategic alternatives as well as corporate reorganizations, some of which may be significant in size.

For example, we completed the Tbroad Merger in April 2020, following which we became the second-largest pay TV provider in Korea in terms of number of subscribers as of December 31, 2023. Moreover, in February 2022, in order to strengthen our online distribution capabilities and explore synergies with our other businesses in the ICT sector, we indirectly re-acquired a 100.0% equity interest in SK m&service Co., Ltd. (“SK M&Service”), which provides online corporate employee benefits management and training services to Korean businesses and public institutions, through our wholly-owned subsidiary PS&Marketing Corporation (“PS&Marketing”), for Won 72.9 billion from SK Planet.

We have also pursued other strategic alternatives, such as forming a strategic alliance in October 2019 with Kakao Corp. (“Kakao”), a Korean Internet company and the operator of Korea’s most popular mobile messaging application, to collaborate in the ICT sector through the sale of 1,266,620 of our treasury shares to Kakao, representing a 1.6% interest, for Won 300.0 billion and a concurrent issuance by Kakao of 2,177,401 of its shares, representing a 2.5% interest, to us for Won 302.3 billion. In addition, in July 2022, we entered into a strategic alliance with Hana Financial Group Inc. (“Hana Financial Group”), a leading financial holding company in Korea with subsidiaries having significant presences in commercial banking, credit card business, securities brokerage and insurance, among others, to seek synergies through convergence between finance and ICT technology. As part of such strategic alliance, we transferred the entirety of our 15.0% interest in HanaCard Co., Ltd. (“HanaCard”), a leading credit card company in Korea and a subsidiary of Hana Financial Group, for Won 330.0 billion in July 2022 and acquired 8,630,949 shares of Hana Financial Group (representing a 2.9% interest) for Won 330.0 billion between July and November 2022, and HanaCard acquired 1,307,471 common shares of us (representing a 0.6% interest) for Won 68.4 billion between July and September 2022.

In order to pursue enhancement of shareholder value and acceleration of growth of the Spin-off Businesses, we effected the Spin-off in November 2021. Following the Spin-off, we have become primarily focused on our core wireless and fixed-line telecommunications businesses, as our equity interests in the Spin-off Portfolio Companies (including our interest in, among others, SK Hynix, SK shieldus Co., Ltd. (a leading provider of physical security, cybersecurity and converged security services in Korea), Eleven Street (an e-commerce platform in Korea), T map Mobility Co., Ltd. (a leading provider of mobility services in Korea) and Content Wavve Co., Ltd. (which operates Wavve, a leading online contents platform in Korea)) comprising our previous semiconductor and new ICT businesses were transferred to SK Square pursuant to the Spin-off. Our business operations relating to the Spin-off Businesses have been accounted for as discontinued operations in our consolidated financial statements for the years ended December 31, 2023, 2022 and 2021 included elsewhere in this annual report.

In line with our strategic emphasis on AI technology, we announced our updated vision of transforming into an “AI Company” that combines AI technology with connectivity technologies of our core telecommunications business as well as the underlying technologies of our other new growth businesses in November 2022 and our “AI Pyramid” strategy in September 2023, which focuses on the three key aspects of (i) developing and expanding our AI infrastructure, (ii) applying AI technology to innovate our existing core business lines and promote the growth of our new growth businesses, and (iii) developing and expanding innovative AI services. See “Item 4.B. Business Overview — Our Business Strategy.” We have also been collaborating with leading Korean AI technology companies as well as other global telecommunications companies in order to accelerate our ongoing transformation to become an AI Company, including by forming the Global Telco AI Alliance (the “GTAA”) in July 2023 with Deutsche Telecom of Germany, e& of the United Arab Emirates and Singtel of Singapore, which was later joined by Softbank of Japan in February 2024. The members of the GTAA have agreed to establish a joint venture dedicated to the development of large-language models that are specifically tailored to the needs of telecommunications companies, and also seek business opportunities in AI-related business areas. In addition, we made a minority equity investment of US$100 million in Anthropic, a generative AI technology company based in San Francisco, in August 2023. We are working with Anthropic and other technology companies to jointly develop a multilingual large-language model customized for telecommunications companies.

For a more detailed description of our recent investments in new businesses, see “Item 5.B. Liquidity and Capital Resources — Capital Requirements — Investments in New Growth Businesses.”

While we are hoping to benefit from a range of synergies and efficiencies from the Spin-off and our other recent or future acquisitions and corporate reorganizations as well as develop new businesses, we may not be able to successfully complete or integrate such acquisitions, new businesses or reorganized entities and may fail to realize the expected benefits in the near term, or at all. In addition, when we enter into new businesses with partners through joint ventures or other strategic alliances, we and those partners may have disagreements with respect to strategic directions or other aspects of business, or may otherwise be unable to coordinate or cooperate with each other, any of which could materially and adversely affect our operations in such businesses. Our business may be negatively impacted if we fail to successfully integrate or realize the anticipated benefits of such transactions.

Due to the existing high penetration rate of wireless telecommunications services in Korea, we are unlikely to maintain our subscriber growth rate, which could adversely affect our business, financial condition and results of operations.

According to data published by the MSIT and the historical population data published by the Ministry of the Interior and Safety, the penetration rate for the Korean wireless telecommunications industry as of December 31, 2023 was approximately 161.3%, which was relatively high compared to many industrialized countries. Therefore, we expect that the penetration rate for wireless telecommunications service in Korea will remain relatively stable. As a result of the already high penetration rate in Korea for wireless telecommunications services coupled with our leading market share, we expect our subscriber growth rate to decrease. Slowed growth in the penetration rate without a commensurate increase in revenues through the introduction of new services and

increased use of our services by existing subscribers would likely have a material adverse effect on our business, financial condition and results of operations.

Our business, financial condition and results of operations may be adversely affected if we fail to acquire adequate additional frequency usage rights or use our bandwidth efficiently to accommodate subscriber growth and subscriber usage.

One of the principal limitations on a wireless network’s subscriber capacity is the amount of frequency spectrum available for use by the network. We have acquired a number of frequency usage rights to secure bandwidth capacity to provide our broad range of services, for which we typically make an initial payment as well as pay usage fees during the license period. We made frequency usage right fee payments of Won 102.5 billion in 2023, Won 103.9 billion in 2022 and Won 120.8 billion in 2021. For more information regarding the various bandwidths that we use and the usage right fees for such bandwidths, see “Item 4.B. Business Overview — Law and Regulation — Frequency Allocation,” “Item 5.B. Liquidity and Capital Resources — Capital Requirements — Capital Expenditures” and note 17 of the notes to our consolidated financial statements.

The growth of our wireless data businesses has been a significant factor in the increased utilization of our bandwidth, since wireless data applications are generally more bandwidth-intensive than voice services. In particular, the continued increase in popularity of smartphones and data intensive applications among smartphone users has been a major factor for the high utilization of our bandwidth in recent years. Although such trend has been offset in part by the implementation of new technologies that enable more efficient usage of our bandwidth, we expect that the current trend of increased data transmission use by our subscribers will continue to accelerate in the near future as more subscribers migrate to our 5G network and the volume and sophistication of the multimedia content we offer through our wireless data services continue to grow in the 5G environment. While we believe that we can address the capacity constraint issue through system upgrades and efficient allocation of bandwidth, inability to address such capacity constraints in a timely manner may adversely affect our business, financial condition and results of operations. In the event we are unable to maintain sufficient bandwidth capacity, our subscribers may perceive a general slowdown of wireless telecommunications services. Growth of our wireless telecommunications business will depend in part upon our ability to effectively manage our bandwidth capacity and to implement efficiently and in a timely manner new bandwidth-efficient technologies if they become available. We cannot assure you that bandwidth constraints will not adversely affect the growth of our wireless telecommunications business.

In 2021, the MSIT reallocated a total of 310 MHz of frequency bandwidths to KT, LG U+ and us, 95 MHz (in the 800 MHz, 2.1 GHz and 2.6 GHz spectrums) of which was allocated to us. See “Item 5.B. Liquidity and Capital Resources — Capital Requirements.” In December 2022, citing the lack of progress made to date with respect to the implementation of 5G infrastructure for our use of the 28 GHz spectrum (800 MHz of bandwidth which was allocated to us in December 2018 for a period of five years until November 2023), the MSIT reduced the duration of our license for the use of such bandwidth by six months and asked us to install 15,000 base stations that use the 28 GHz spectrum by the end of May 2023, which we were not able to do within the Government’s requested timetable. While we do not believe that the loss of such allocated bandwidth have had or will have a material adverse effect on our business, we cannot assure you that we will be able to reacquire such bandwidth in the future or that the failure to reacquire such bandwidth will not adversely affect our future prospects. Furthermore, in December 2022, the Government cancelled the allocations of bandwidth in the 28 GHz spectrum that had been provided to KT and LG U+, also citing the lack of progress made by these companies. In January 2024, the Government allocated 800 MHz of bandwidth in the 28 GHz spectrum to Stage X to provide nationwide wireless network services. Stage X is required, among other things, to install 6,000 base stations across Korea that use the 28 GHz spectrum by 2027.

We may be required to pay a substantial amount to acquire additional bandwidth capacity in the future in order to meet increasing bandwidth demand or renew the rights to use our existing bandwidth, and we may not be successful in acquiring the necessary bandwidth to meet such demand at commercially attractive terms or at all, which may adversely affect our business, financial condition and results of operations.

We rely on key technology professionals and senior management, and the loss of the services of any such personnel or the inability to attract and retain them may negatively affect our business.

Our success depends to a significant extent on the continued service of our research and development and engineering personnel, and our ability to continue to attract, retain and motivate qualified technology professionals including researchers and engineers. In particular, our focus on leading the market in introducing new services has meant that we must aggressively recruit technology professionals with expertise in cutting-edge technologies. Such employees are in high demand, and we devote significant resources to identifying, hiring, training, successfully integrating and retaining these employees. Competition for these individuals could cause us to offer higher compensation and other benefits to attract and retain them. We also depend on the services of experienced key senior management, and if we lose their services, it would be difficult to find and integrate replacement personnel in a timely manner, or at all.

The loss of the services of any of our key technology professionals or senior management without adequate replacement, or the inability to attract new qualified personnel, would have a material adverse effect on our results of operations.

We need to observe certain financial and other covenants under the terms of our debt instruments, the failure to comply with which would put us in default under those instruments.

Certain of our debt instruments contain financial and other covenants with which we are required to comply on an annual and semi-annual basis. The financial covenants with respect to SK Telecom’s debt instruments include, but are not limited to, a maximum net debt-to-EBITDA ratio of 3.50 and a minimum EBITDA-to-total interest expense ratio of 4.00, each as determined on a separate financial statement basis. The debt arrangements also contain negative pledge provisions limiting our ability to provide liens on our assets as well as cross-default and cross-acceleration clauses, which give related creditors the right to accelerate the amounts due under such debt if an event of default or acceleration has occurred with respect to our existing or future indebtedness, or if any material part of our indebtedness or indebtedness of our subsidiaries is capable of being declared payable before the stated maturity date. In addition, such covenants restrict our ability to raise future debt financing.

If we breach our financial or other covenants, our financial condition will be adversely affected to the extent we are not able to cure such breaches or repay the relevant debt.

We may have to make further financing arrangements to meet our capital expenditure requirements and debt payment obligations.

We have had, and expect to continue to have, significant capital expenditure requirements as we continue to build out, maintain and upgrade our networks and invest in businesses that complement our wireless and fixed-line telecommunications businesses. We spent Won 2,973.9 billion for capital expenditures in 2023. We currently expect to spend a similar amount for capital expenditures in 2024 compared to 2023 for a range of projects, including investments to further expand and improve our 5G network, investments to maintain our LTE network and related services, investments to improve and expand our Wi-Fi network, investments to develop our IoT solutions and platform services business portfolio, including AI solutions, investments in data infrastructure, investments in further research and development of 5G technology, investments in businesses that can potentially leverage our 5G network, and investments in funding for mid- to long-term research and development projects. Such projects also include other initiatives related to the development of new growth businesses and our ongoing businesses in the ordinary course, in each case with an emphasis on incorporating AI technology into our various existing and new business areas. In 2021, the MSIT reallocated a total of 310 MHz of frequency bandwidths to KT, LG U+ and us, 95 MHz (in the 800 MHz, 2.1 GHz and 2.6 GHz spectrums) of which was allocated to us. See “Item 5.B. Liquidity and Capital Resources — Capital Requirements.” We would be required to spend additional amounts on capital expenditures in connection with our continued efforts to build out our networks on such reallocated bandwidths. We may increase, reduce or suspend our planned capital expenditures for 2024 or

change the timing and area of our capital expenditure spending from the estimates described above in response to market conditions or for other reasons. We may also make additional capital expenditures and other investments beyond our currently anticipated level as opportunities arise, including in relation to any acquisitions of additional frequency usage rights or execution of additional AI-related investments.

In particular, we continue to make significant capital investments to expand and upgrade our wireless networks in response to growing bandwidth demand by our subscribers. Bandwidth usage by our subscribers has rapidly increased in recent years primarily due to the increasing number of data intensive mobile applications and use of such applications by smartphone users. If heavy usage of bandwidth-intensive services grows beyond our current expectations, we may need to invest more capital than is currently anticipated to expand the bandwidth capacity of our networks or our customers may experience suboptimal performance when using our services. Any of these events could adversely affect our competitive position and have a material adverse effect on our business, financial condition and results of operations. For a more detailed discussion of our capital expenditure plans and a discussion of other factors that may affect our future capital expenditures, see “Item 5.B. Liquidity and Capital Resources — Capital Requirements — Capital Expenditures.”

As of December 31, 2023, we had Won 2,707.2 billion in contractual payment obligations (excluding short-term leases and leases of low-value assets) due in 2024, which mostly involved repayment of debt obligations and payments related to lease liabilities and frequency licenses. See “Item 5.B. Liquidity and Capital Resources — Contractual Obligations and Commitments.”

We have not arranged firm financing for all of our current or future capital expenditure plans and contractual payment obligations. We have, in the past, obtained funds for our proposed capital expenditure and payment obligations from various sources, including our cash flow from operations as well as from financings, primarily debt and equity financings. Any material adverse change in our operational or financial condition could impact our ability to fund our capital expenditure plans and contractual payment obligations. Volatile financial market conditions and an increasing interest rate environment may also curtail our ability to obtain adequate funding and/or increase our cost of borrowings, which would have an adverse effect on our liquidity and financial position. Inability to fund such capital expenditure requirements may have a material adverse effect on our business, financial condition and results of operations. In addition, although we currently anticipate that the capital expenditure levels estimated by us will be adequate to meet our business needs, such estimates may need to be adjusted based on developments in technology and markets. Failure to meet any such increased expenditure requirements or to obtain adequate financing for such requirements on terms acceptable to us, or at all, may have a material adverse effect on our business, financial condition and results of operations.

Termination or impairment of our relationship with a small number of key suppliers for network equipment and for leased lines could adversely affect our business, financial condition and results of operations.

We purchase wireless network equipment from a small number of suppliers. To date, we have purchased substantially all of the equipment for our networks from Samsung Electronics Co., Ltd. (“Samsung Electronics”), Ericsson-LG Co., Ltd. (“Ericsson-LG”) and Nokia Corporation (“Nokia”). In addition, we purchase a substantial majority of our wireless devices from Samsung Electronics and Apple. Although other manufacturers sell the equipment we require, sourcing such equipment from other manufacturers could result in unanticipated costs in the maintenance and enhancement of our wireless networks. Inability to obtain the equipment needed for our networks in a timely manner may have an adverse effect on our business, financial condition and results of operations.

We cannot assure you that we will be able to continue to obtain the necessary equipment from one or more of our suppliers. Any discontinuation or interruption in the availability of equipment from our suppliers for any reason could have an adverse effect on our business, financial condition and results of operations. In addition, inability to lease adequate lines at commercially reasonable rates may impact the quality of the services we offer and may also damage our reputation and our business.

Our business relies on technology developed by us, and our business will suffer if we are unable to protect our proprietary rights.

We own numerous patents and trademarks worldwide, and have applications for patents pending in many countries. In addition to active research and development efforts, our success depends in part on our ability to obtain patents and other intellectual property rights covering our services.

We may be required to defend against charges of infringement of patent or other proprietary rights of third parties. Although we have not experienced any significant patent or other intellectual property disputes, we cannot be certain that any significant patent or other intellectual property disputes will not occur in the future. Defending our patent and other proprietary rights could require us to incur substantial expense and to divert significant resources of our technical and management personnel, and could result in our loss of rights to employ certain technologies to provide services.

Malicious and abusive Internet practices could impair our services and we may be subject to significant legal and financial exposure, damage to our reputation and a loss of confidence of our customers.

Our business involves the storage and transmission of large amounts of confidential information, and cybersecurity breaches expose us to a risk of loss of this information, which may lead to improper use or disclosure of such information, ensuing potential liability and litigation, any of which could harm our reputation and adversely affect our business.

We maintain a comprehensive process for assessing, identifying and managing material risks from cybersecurity threats as part of our overall risk management system and processes. See “Item 16K. Cybersecurity.” Our cybersecurity measures may be breached due to employee error, malfeasance or otherwise. Instituting appropriate access controls and safeguards across all of our information technology infrastructure is challenging. Furthermore, outside parties may attempt to fraudulently induce employees to disclose sensitive information in order to gain access to our data or our customers’ data or accounts, or may otherwise obtain access to such data or accounts. Because the techniques used to obtain unauthorized access, disable or degrade service or sabotage systems change frequently and often are not recognized until attacks are launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. While we have experienced minor isolated cybersecurity incidents in the past, we do not believe that any such incidents had a material adverse effect on our business, financial condition or results of operations. If an actual or perceived breach of our cybersecurity of a material nature occurs or the market perception of the effectiveness of our cybersecurity measures is materially harmed, we may incur significant legal and financial exposure, including legal claims and regulatory fines and penalties, damage to our reputation and a loss of confidence of our customers, which could have an adverse effect on our business, financial condition and results of operations.

In addition, our wireless and fixed-line subscribers utilize our network to access the Internet and, as a consequence, we or they may become victim to common malicious and abusive Internet activities, such as unsolicited mass advertising (i.e., “spam”), hacking of personal information, distributed denial-of-service attacks and dissemination of viruses, worms and other destructive or disruptive software. These activities could have adverse consequences on our network and our customers, including degradation of service, excessive call volume to call centers and damage to our or our customers’ equipment and data. Significant incidents could lead to customer dissatisfaction and, ultimately, loss of customers or revenue, in addition to increased costs to us to service our customers and protect our network. Any significant loss of our subscribers or revenue due to incidents of malicious and abusive Internet practices or significant increase in costs of serving those subscribers could adversely affect our business, financial condition and results of operations.

Labor disputes may disrupt our operations.

Although we have never experienced any significant labor disputes, there can be no assurance that we will not experience labor disputes in the future, including protests and strikes, which could have an adverse effect on our business, financial condition and results of operations.

Every two years, the union and management negotiate and enter into a new collective bargaining agreement that has a two-year duration, which is focused on employee benefits and welfare. Employee wages are separately negotiated on an annual basis. Although we consider our relationship with our employees to be good, there can be no assurance that we will be able to maintain such a working relationship with our employees and will not experience labor disputes resulting from disagreements with the labor union in the future.

Concerns that radio frequency emissions may be linked to various health concerns could adversely affect our business and we could be subject to litigation relating to these health concerns.

In the past, allegations that serious health risks may result from the use of wireless telecommunications devices or other transmission equipment have adversely affected share prices of some wireless telecommunications companies in the United States. In May 2011, the International Agency for Research on Cancer (the “IARC”), a part of the World Health Organization, announced that it has classified radiofrequency electromagnetic fields associated with wireless phone use as possibly carcinogenic to humans, based on an increased risk for glioma, a malignant type of brain cancer. The IARC conducts research on the causes of human cancer and the mechanisms of carcinogenesis and aims to develop scientific strategies for cancer control. We cannot assure you that these health concerns will not adversely affect our business. Several class action and personal injury lawsuits have been filed in the United States against several wireless phone manufacturers and carriers, asserting product liability, breach of warranty and other claims relating to radio transmissions to and from wireless phones. Certain of these lawsuits have been dismissed. We could be subject to liability or incur significant costs defending lawsuits brought by our subscribers or other parties who claim to have been harmed by or as a result of our services. In addition, the actual or perceived risk of wireless telecommunications devices could have an adverse effect on our business by reducing the number of our subscribers or the usage per subscriber.

Our ability to deliver services may be disrupted due to a systems failure, shutdown in our networks or natural disaster.

Our services are currently carried through our wireless and fixed-line networks, which could be vulnerable to damage or interruptions in operations due to fires, floods, earthquakes, power losses, telecommunication failures, network software flaws, unauthorized access, computer viruses and similar events, which may occur from time to time. The occurrence of any of these events could impact our ability to deliver services, we may be liable for damages to our customers caused by such interruptions, our reputation may be damaged and our customers may lose confidence in us, which could have a negative effect on our business, financial condition and results of operations.

Depreciation of the value of the Won against the Dollar and other major foreign currencies may have a material adverse effect on our results of operations and the market value of our common shares and ADSs.

Substantially all of our revenues are denominated in Won. Depreciation of the Won may materially affect our results of operations because, among other things, it causes:

•	an increase in the amount of Won required by us to make interest and principal payments on our foreign currency-denominated debt; and
•	an increase, in Won terms, of the costs of equipment that we purchase from overseas sources which we pay for in Dollars or other foreign currencies.
---	---

Fluctuations in the exchange rate between the Won and the Dollar will affect the Dollar equivalent of the Won price of the our common shares on the KRX KOSPI Market. These fluctuations will also affect:

•	the amounts a registered holder or beneficial owner of ADSs will receive from the American Depositary Receipt (“ADR”) depositary in respect of dividends, which will be paid in Won to the ADR depositary and converted by the ADR depositary into Dollars;

•	the Dollar value of the proceeds that a holder will receive upon sale in Korea of our common shares; and
•	the secondary market price of our ADSs.
---	---

If SK Inc. causes us to breach the foreign ownership limitations on our common shares by being deemed to be a foreign entity, we may experience a change of control.

The Telecommunications Business Act currently sets a 49.0% limit on the aggregate foreign ownership of our issued shares. Under the Telecommunications Business Act, as amended, a Korean entity, such as SK Inc., is deemed to be a foreign entity if its largest shareholder (determined by aggregating the shareholdings of such shareholder and its related parties) is a foreigner and such shareholder (together with the shareholdings of its related parties) holds 15.0% or more of the issued voting stock of the Korean entity. While there is currently a pending bill before the National Assembly which proposes to eliminate such limitation on the aggregate foreign ownership, it remains uncertain as to whether the National Assembly will vote in favor of passing such bill or when such vote will take place.

Notwithstanding the above, pursuant to an amendment to the Telecommunications Business Act which became effective in April 2022, a Korean entity, so long as (i) such entity’s largest shareholder (determined by aggregating the shareholdings of such shareholder and its related parties) is a foreign entity specifically designated by the MSIT incorporated in a country that has entered into a bilateral or multilateral free trade agreement with Korea, and (ii) such shareholder (together with the shareholdings of its related parties) owns 15.0% or more of the issued voting stock of such entity, may own more than 49.0% of our issued shares but may not exercise its voting rights with respect to the shares held in excess of the 49% ceiling until the end of the MSIT’s Public Interest Review (see “Item 4.B. Business Overview — Foreign Ownership and Investment Restrictions and Requirements”).

As of December 31, 2023, SK Inc. owned 65,668,397 shares of our common stock, or 30.0%, of our issued shares. SK Inc. is currently not deemed to be a foreign entity. However, should SK Inc. be considered to be a foreign shareholder in the future, then its shareholding in us would be included in the calculation of our aggregate foreign shareholding and our aggregate foreign shareholding (based on our foreign ownership level as of December 31, 2023, which we believe was 41.0%) would exceed the 49.0% ceiling on foreign shareholding. As of December 31, 2023, the two largest foreign shareholders of SK Inc. each held a 3.3% stake therein.

If our aggregate foreign shareholding limit is exceeded, the MSIT may issue a corrective order to us, the breaching shareholder (including SK Inc. if the breach is caused by an increase in foreign ownership of SK Inc.) and the foreign shareholder which owns in the aggregate 15.0% or more of SK Inc. Furthermore, if SK Inc. is considered a foreign shareholder, it will be prohibited from exercising its voting rights with respect to the shares held in excess of the 49.0% ceiling, which may result in a change in control of us. In addition, the MSIT will be prohibited from granting us licenses or permits necessary for entering into new telecommunications businesses until our aggregate foreign shareholding is reduced to below 49.0%. For a description of further actions that the MSIT could take, see “Item 4.B. Business Overview — Law and Regulation — Foreign Ownership and Investment Restrictions and Requirements.”

Risks Relating to Korea

Unfavorable financial and economic developments in Korea may have an adverse effect on us.

We are incorporated in Korea, and a substantial portion of our operations and assets are located in Korea. As a result, we are subject to political, economic, legal and regulatory risks specific to Korea, and our performance and successful fulfillment of our operational strategies are dependent in large part on the overall Korean economy. Due to the debilitating effects of the COVID-19 pandemic on the Korean economy and the economies of Korea’s major trading partners, the economic indicators in Korea have shown mixed signs of deterioration and

uncertain recovery since the outbreak of the COVID-19 pandemic. See “— Risks relating to Our Business — Occurrences of widespread infectious diseases, including any possible recurrence of COVID-19, may materially and adversely affect our business, financial condition and results of operations.” As a result, future growth of the Korean economy is subject to many factors beyond our control, including developments in the global economy.

In recent years, adverse conditions and volatility in the worldwide financial markets, fluctuations in oil and commodity prices, supply chain disruptions and the increasing weakness of the global economy, which have been affected by, among others, the COVID-19 pandemic, Russia’s invasion of Ukraine and ensuing sanctions against Russia, difficulties faced by several banks in the United States and Europe, increases in policy interest rates globally (including Korea) to combat rising inflationary pressures, and more recently, escalating hostilities in the Middle East following the Israel-Hamas war, have contributed to the uncertainty of global economic prospects in general and have adversely affected, and may continue to adversely affect, the Korean economy. The value of the Won relative to major foreign currencies has fluctuated significantly and, as a result of uncertain global and Korean economic, social and political conditions, there has been significant volatility in the stock prices of Korean companies recently. Future declines in the Korea Composite Stock Price Index (the “KOSPI”), and large amounts of sales of Korean securities by foreign investors and subsequent repatriation of the proceeds of such sales may adversely affect the value of the Won, the foreign currency reserves held by financial institutions in Korea, and the ability of Korean companies to raise capital. Any future deterioration of the Korean or global economy could adversely affect our business, financial condition and results of operations.

Developments that could have an adverse impact on Korea’s economy include:

•	declines in consumer confidence and a slowdown in consumer spending, including as a result of severe health epidemics, such as COVID-19, and increases in market interest rates;
•	rising inflationary pressures leading to increases in the costs of goods and services and a decrease in purchasing power;
---	---
•	adverse changes or volatility in foreign currency reserve levels, commodity prices (including oil prices), exchange rates (including fluctuation of the Won against the U.S. dollar, Euro or Japanese Yen exchange rates or revaluation of the Chinese Yuan), interest rates, inflation rates or stock markets;
---	---
•	adverse conditions or developments in the economies of countries and regions that are important export markets for Korea, such as China, the United States, Europe and Japan, or in emerging market economies in Asia or elsewhere, including as a result of deteriorating economic and trade relations between the United States and China and increased uncertainties in the global financial markets and industry;
---	---
•	a continuing rise in the level of household debt and increasing delinquencies and credit defaults by retail or small— and medium—sized enterprise borrowers in Korea;
---	---
•	the economic impact of any pending or future free trade agreements or any changes to existing free trade agreements;
---	---
•	shortages of imported raw materials, natural resources, rare earth minerals or component parts, including semiconductors, due to disruptions to the global supply chain;
---	---
•	a deterioration in economic or diplomatic relations between Korea and its trading partners or allies, including deterioration resulting from territorial or trade disputes or disagreements in foreign policy;
---	---
•	increased sovereign default risks in select countries and the resulting adverse effects on the global financial markets;
---	---
•	a deterioration in the financial condition or performance of small- and medium-sized enterprises and other companies in Korea due to the Government’s policies to increase minimum wages and limit working hours of employees;
---	---
•	investigations of large Korean conglomerates and their senior management for possible misconduct;
---	---

•	social and labor unrest;
•	substantial changes in the market prices of Korean real estate;
---	---
•	a substantial decrease in tax revenues and a substantial increase in the Government’s expenditures for fiscal stimulus measures, unemployment compensation and other economic and social programs, in particular in light of the Government’s ongoing efforts to provide emergency relief payments to households and emergency loans to corporations in need of funding in light of the COVID-19 pandemic as well as interest rate increases, which together would likely lead to a national budget deficit as well as an increase in the Government’s debt;
---	---
•	financial problems or lack of progress in the restructuring of Korean conglomerates, other large troubled companies, their suppliers or the financial sector;
---	---
•	loss of investor confidence arising from corporate accounting irregularities and corporate governance issues concerning certain Korean conglomerates;
---	---
•	increases in social expenditures to support an aging population in Korea or decreases in economic productivity due to the declining population size in Korea;
---	---
•	geopolitical uncertainty and the risk of further attacks by terrorist groups around the world;
---	---
•	political uncertainty or increasing strife among or within political parties in Korea;
---	---
•	hostilities, political or social tensions involving Russia (including the invasion of Ukraine by Russia and the ensuing actions that the United States and other countries have taken or may take in the future, such as the imposition of sanctions against Russia) and the resulting adverse effects on the global supply of oil and other natural resources and the global financial markets;
---	---
•	hostilities or political or social tensions involving countries in the Middle East (including those resulting from escalating hostilities in the Middle East following the Israel-Hamas war) and North Africa and any material disruption in the global supply of oil or sudden increase in the price of oil;
---	---
•	natural or man-made disasters that have a significant adverse economic or other impact on Korea or its major trading partners; and
---	---
•	an increase in the level of tensions or an outbreak of hostilities between North Korea and Korea or the United States.
---	---

Escalations in tensions with North Korea could have an adverse effect on us and the market value of our common shares and ADSs.

Relations between Korea and North Korea have been tense throughout Korea’s modern history. The level of tension between the two Koreas has fluctuated and may increase abruptly as a result of future events. In particular, there have been heightened security concerns in recent years stemming from North Korea’s nuclear weapon, ballistic missile and satellite programs as well as its hostile military actions against Korea. Some of the significant incidents in recent years include the following:

•

North Korea renounced its obligations under the Nuclear Non-Proliferation Treaty in January 2003 and has conducted six rounds of nuclear tests since October 2006, including claimed detonations of hydrogen bombs and warheads that can be mounted on ballistic missiles. Over the years, North Korea has continued to conduct a series of missile tests, including ballistic missiles launched from submarines and intercontinental ballistic missiles that it claims can reach the United States mainland. North Korea has increased the frequency of such activities since the beginning of 2022, firing numerous ballistic missiles, including intercontinental ballistic missiles, and in November 2023, successfully launched its first spy satellite. In response, the Government has repeatedly condemned the provocations and flagrant violations of relevant United Nations Security Council resolutions. In February 2016, the Government also closed the inter-Korea Gaeseong Industrial Complex in response to North Korea’s fourth nuclear

<br>test in January 2016. Internationally, the United Nations Security Council has passed a series of resolutions condemning North Korea’s actions and significantly expanding the scope of sanctions applicable to North Korea. Over the years, the United States and the European Union have also expanded their sanctions applicable to North Korea.
•	In March 2010, a Korean naval vessel was destroyed by an underwater explosion, killing many of the crewmen on board. The Government formally accused North Korea of causing the sinking, while North Korea denied responsibility. Moreover, in November 2010, North Korea fired more than one hundred artillery shells that hit Korea’s Yeonpyeong Island near the Northern Limit Line, which acts as the de facto maritime boundary between Korea and North Korea on the west coast of the Korean peninsula, causing casualties and significant property damage. The Government condemned North Korea for the attack and vowed stern retaliation should there be further provocation.
---	---

test in January 2016. Internationally, the United Nations Security Council has passed a series of resolutions condemning North Korea’s actions and significantly expanding the scope of sanctions applicable to North Korea. Over the years, the United States and the European Union have also expanded their sanctions applicable to North Korea.

•

In March 2010, a Korean naval vessel was destroyed by an underwater explosion, killing many of the crewmen on board. The Government formally accused North Korea of causing the sinking, while North Korea denied responsibility. Moreover, in November 2010, North Korea fired more than one hundred artillery shells that hit Korea’s Yeonpyeong Island near the Northern Limit Line, which acts as the de facto maritime boundary between Korea and North Korea on the west coast of the Korean peninsula, causing casualties and significant property damage. The Government condemned North Korea for the attack and vowed stern retaliation should there be further provocation.

---

North Korea’s economy also faces severe challenges, which may further aggravate social and political pressures within North Korea.

Although bilateral summit meetings between Korea and North Korea were held in April, May and September 2018 and between the United States and North Korea in June 2018, February 2019 and June 2019, there can be no assurance that the level of tensions affecting the Korean peninsula will not escalate in the future. Any further increase in tensions, which may occur, for example, if North Korea experiences a leadership crisis, high-level contacts between Korea and North Korea or between the United States and North Korea break down or military hostilities occur, could have a material adverse effect on our business, financial condition and results of operations and the market value of our common shares and ADSs.

Korea’s legislation allowing class action suits related to securities transactions may expose us to additional litigation risk.

The Securities-related Class Action Act of Korea (the “Securities-related Class Action Act”), enacted in January 2004, allows class action suits to be brought by shareholders of companies (including us) listed on the KRX KOSPI Market for losses incurred in connection with purchases and sales of securities and other securities transactions arising from (1) false or inaccurate statements provided in the registration statements, prospectuses, annual reports, audit reports, and semi-annual or quarterly reports or omissions of material information in such documents, (2) insider trading, (3) market manipulation and (4) unfair trading. The Securities-related Class Action Act permits 50 or more shareholders who collectively hold 0.01% of the shares of a company to bring a class action suit against, among others, the issuer and its directors and officers. Because of the relatively recent enactment of the Securities-related Class Action Act, there is not enough judicial precedent to predict how the courts will apply the law. Litigation can be time-consuming and expensive to resolve, and can divert management time and attention from the operation of a business. We are not aware of any basis upon which such suit may be brought against us, nor are any such suits pending or threatened. Any such litigation brought against us could have a material adverse effect on our business, financial condition and results of operations.

There are special risks involved with investing in securities of Korean companies, including the possibility of restrictions being imposed by the Government in emergency circumstances.

As we are a Korean company and operate in a business and cultural environment that is different from that of other countries, there are risks associated with investing in our securities that are not typical for investments in securities of companies in other jurisdictions.

Under the Korean Foreign Exchange Transactions Act, if the Government deems that certain emergency circumstances, including a significant disruption in the international balance of payments and international financial markets or extreme difficulty in carrying out currency, exchange rate or other macroeconomic policies due to the movement of capital between Korea and other countries, are likely to occur, it may impose any

necessary restriction such as requiring Korean or foreign investors to obtain prior approval from the Ministry of Economy and Finance (the “MOEF”) for the acquisition of Korean securities or for the repatriation of interest, dividends or sales proceeds arising from Korean securities or from disposition of such securities or other transactions involving foreign exchange. See “Item 10.D. Exchange Controls — Korean Foreign Exchange Controls and Securities Regulations.”

Risks Relating to Securities

Sales of our shares by SK Inc. and/or other large shareholders may adversely affect the market value of our common shares and ADSs.

Sales of substantial amounts of our common shares, or the perception that such sales may occur, could adversely affect the prevailing market value of our common shares or ADSs or our ability to raise capital through an offering of our common shares.

As of December 31, 2023, SK Inc. owned 30.0% of our total issued common shares and has not agreed to any restrictions on its ability to dispose of our shares. See “Item 7.A. Major Shareholders.” We can make no prediction as to the timing or amount of any sales of our common shares. We cannot assure you that future sales of our common shares, or the availability of our common shares for future sale, will not adversely affect the prevailing market value of our common shares or ADSs from time to time.

If an investor surrenders his or her ADSs to withdraw the underlying shares, he or she may not be allowed to deposit the shares again to obtain ADSs.

Under the deposit agreement, holders of our common shares may deposit those shares with the ADR depositary’s custodian in Korea and obtain ADSs, and holders of ADSs may surrender ADSs to the ADR depositary and receive our common shares. However, under the terms of the deposit agreement, as amended, the depositary bank is required to obtain our prior consent to any such deposit if, after giving effect to such deposit, the total number of our common shares represented by ADSs, which was 13,512,383 shares as of March 31, 2024, exceeds a specified maximum, which was 73,861,029 shares as of March 31, 2024, subject to adjustment under certain circumstances. In addition, the depositary bank or the custodian may not accept deposits of our common shares for issuance of ADSs under certain circumstances, including (1) if it has been determined by us that we should block the deposit to prevent a violation of applicable Korean laws and regulations or our articles of incorporation or (2) if a person intending to make a deposit has been identified as a holder of at least 4.0% of our common shares. It is possible that we may not give the consent. Consequently, an investor who has surrendered his or her ADSs and withdrawn the underlying shares may not be allowed to deposit the shares again to obtain ADSs.

An investor in our ADSs may not be able to exercise preemptive rights for additional new shares and may suffer dilution of his or her equity interest in us.

The Korean Commercial Code and our articles of incorporation require us, with some exceptions, to offer shareholders the right to subscribe for new shares in proportion to their existing ownership percentage whenever new shares are issued. If we offer a right to subscribe for additional new common shares or any other rights of similar nature, the ADR depositary, after consultation with us, may make the rights available to an ADS holder or use reasonable efforts to dispose of the rights on behalf of the ADS holder and make the net proceeds available to the ADS holder. The ADR depositary, however, is not required to make available to an ADS holder any rights to purchase any additional shares unless it deems that doing so is lawful and feasible and:

•	a registration statement filed by us under the Securities Act is in effect with respect to those shares; or
•	the offering and sale of those shares is exempt from, or is not subject to, the registration requirements of the Securities Act.
---	---

We are under no obligation to file any registration statement with respect to any ADSs. If a registration statement is required for an ADS holder to exercise preemptive rights but is not filed by us, the ADS holder will not be able to exercise his or her preemptive rights for additional shares. As a result, ADS holders may suffer dilution of their equity interest in us.

Short selling of our ADSs by purchasers of securities convertible or exchangeable into our ADSs could materially adversely affect the market price of our ADSs.

SK Inc., through one or more special purpose vehicles, has engaged and may in the future engage in monetization transactions relating to its ownership interest in us. These transactions have included and may include offerings of securities that are convertible or exchangeable into our ADSs. Many investors in convertible or exchangeable securities seek to hedge their exposure in the underlying equity securities at the time of acquisition of the convertible or exchangeable securities, often through short selling of the underlying equity securities or similar transactions. Since a monetization transaction could involve debt securities linked to a significant number of our ADSs, we expect that a sufficient quantity of ADSs may not be immediately available for borrowing in the market to facilitate settlement of the likely volume of short selling activity that would accompany the commencement of a monetization transaction. This short selling and similar hedging activity could place significant downward pressure on the market price of our ADSs, thereby having a material adverse effect on the market value of ADSs owned by you.

A holder of our ADSs may not be able to enforce a judgment of a foreign court against us.

We are a corporation with limited liability organized under the laws of Korea. Substantially all of our directors and officers and other persons named in this annual report reside in Korea, and all or a significant portion of the assets of our directors and officers and other persons named in this annual report and substantially all of our assets are located in Korea. As a result, it may not be possible for holders of our ADSs to effect service of process within the United States, or to enforce against us any judgments obtained from the United States courts based on the civil liability provisions of the federal securities laws of the United States. There is doubt as to the enforceability in Korea, either in original actions or in actions for enforcement of judgments of United States courts, of civil liabilities predicated on the United States federal securities laws.

We are generally subject to Korean corporate governance and disclosure standards, which may differ from those in other countries.

Companies in Korea, including us, are subject to corporate governance standards applicable to Korean public companies, which may differ in some respects from standards applicable in other countries, including the United States. As a reporting company registered with the SEC and listed on the New York Stock Exchange (“NYSE”), we are subject to certain corporate governance standards as mandated by the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”). However, foreign private issuers, including us, are exempt from certain corporate governance requirements under the Sarbanes-Oxley Act or under the rules of the NYSE. There may also be less publicly available information about Korean companies, such as us, than is regularly made available by public or non-public companies in other countries. Such differences in corporate governance standards and less public information available could result in corporate governance practices or disclosures that are perceived as less than satisfactory by investors in certain countries.

Item 4.	INFORMATION ON THE COMPANY
Item 4.A.	History and Development of the Company
---	---

As Korea’s first wireless telecommunications service provider, we have a recognized history of leadership and innovation in the domestic telecommunications sector. Today, we remain Korea’s leading wireless telecommunications services provider and have continued to pioneer the commercial development and

implementation of state-of-the-art wireless technologies. We had 33.7 million wireless subscribers, including MVNO subscribers leasing our networks, as of December 31, 2023, representing a market share of 40.7%, the largest market share among Korean wireless telecommunications service providers. We believe we are also a leader in developing new products and services that reflect the increasing convergence of telecommunications technologies, as well as the growing synergies between the telecommunications sector and other industries.

In February 2012, we acquired an equity stake in SK Hynix, one of the world’s largest memory-chip makers by revenue, for an aggregate purchase price of Won 3.4 trillion, and became its largest shareholder. In November 2021, we transferred all of our 20.1% equity interest in SK Hynix to SK Square pursuant to the Spin-off, as further described below.

Effective as of November 1, 2021, we conducted the Spin-off, pursuant to which we spun off our equity interests in certain subsidiaries and investees (collectively comprising the Spin-off Portfolio Companies) engaged in the semiconductor and certain other non-telecommunications businesses, including our security, e-commerce and other new ICT businesses (collectively comprising the Spin-off Businesses) to SK Square, a newly established holding company, and we distributed SK Square’s shares of common stock on a pro rata basis to the holders of our common stock.

In connection with the Spin-off, we also engaged in a 5-to-1 stock split of our common stock (the “Stock Split”), pursuant to which the par value of our common stock changed from Won 500 per share to Won 100 per share and the number of issued shares of our common stock increased from 72,060,143 shares to 360,300,715 shares, in each case effective as of October 28, 2021. Immediately following, and as a result of, the Stock Split, each ADS outstanding as of October 28, 2021 represented five-ninths of one share of our common stock. On March 31, 2024, we had a market capitalization of approximately Won 11.3 trillion (US$8.4 billion) or approximately 0.5% of the total market capitalization on the KRX KOSPI Market, making us the 32nd largest company listed on the KRX KOSPI Market based on market capitalization on that date. Our ADSs, each representing five-ninths of one share of our common stock, have traded on the NYSE since June 27, 1996.

We are a corporation with limited liability organized under the laws of Korea. We established our telecommunications business in March 1984 under the name Korea Mobile Telecommunications Co., Ltd. We changed our name to SK Telecom Co., Ltd., effective March 21, 1997. In January 2002, we merged with Shinsegi Telecom Co., Ltd. (“Shinsegi”), which was then the third-largest wireless telecommunications service provider in Korea. Our registered office is at SK T-Tower, 65, Eulji-ro, Jung-gu, Seoul 04539, Korea and our telephone number is

+82-2-6100-2114.

Our website address is www.sktelecom.com.
The SEC maintains a website (www.sec.gov), which contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.

Korean Telecommunications Industry

Established in March 1984, we became the first wireless telecommunications service provider in Korea. We remained the sole provider of wireless telecommunications services until April 1996, when Shinsegi commenced cellular service. The Government began to introduce competition into the fixed-line and wireless telecommunications services markets in the early 1990’s. During this period, the Government allowed new competitors to enter the fixed-line sector, sold a controlling stake in us to the SK Group, and granted a cellular license to our first competitor, Shinsegi. In October 1997, three additional companies began providing wireless telecommunications services under Government licenses to provide wireless telecommunications services. In 2000 and 2001, the Korean wireless telecommunications market experienced significant consolidation. In January 2002, Shinsegi was merged into us. Additionally, two of the other wireless telecommunications services providers merged.

There are currently three mobile network operators in Korea: us, KT and LG U+. As of December 31, 2023, the market share of the Korean wireless telecommunications market, in terms of number of subscribers, of KT

and LG U+ was approximately 29.3% and 30.0%, respectively (compared to our market share of 40.7%), each including MVNO subscribers leasing the respective networks. As of December 31, 2023, MVNOs had a combined market share of 19.2%, of which MVNOs leasing our networks represented 2.9%, MVNOs leasing KT’s networks represented 8.6% and MVNOs leasing LG U+’s networks represented 7.6%. In January 2024, the Government allocated 800 MHz of bandwidth in the 28 GHz spectrum to Stage X to provide nationwide wireless network services. Stage X is required, among other things, to install 6,000 base stations across Korea that use the 28 GHz spectrum by 2027.

Telecommunications industry growth in Korea has been among the most rapid in the world, with fixed-line penetration being under five lines per 100 population in 1978 and increasing to 47.9 lines per 100 population as of December 31, 2006 before decreasing to 21.4 lines per 100 population as of December 31, 2023, and wireless penetration increasing from 7.0 subscribers per 100 population in 1996 to 161.3 subscribers per 100 population as of December 31, 2023. The table below sets forth certain subscription and penetration information regarding the Korean telecommunications industry as of the dates indicated:

	As of December 31,
	2023		2022		2021
	(In thousands, except for per population amounts)
Population of Korea^(1)^		51,325		51,439		51,639
Wireless Subscribers^(2)^		82,770		75,958		71,920
Wireless Subscribers per 100 Population		161.3		147.7		139.3
Telephone Lines in Service		10,974		11,621		12,212
Telephone Lines per 100 Population		21.4		22.6		23.6
(1)	Source: The Ministry of the Interior and Safety.
---	---
(2)	Includes subscribers of non-mobile phone wireless services, such as services for tablet computers, wearable devices, IoT devices and others.
---	---

Since the introduction of short text messaging in 1998, Korea’s wireless data market has grown rapidly. This growth has been driven, in part, by the rapid development of wireless Internet service since its introduction in 1999 and the implementation of LTE and 5G technologies providing for fast data transmission speeds and large data transmission capacity. As of December 31, 2023, approximately 55.1 million Korean wireless subscribers owned smartphones that had direct access to the Internet using mobile Internet technology. The table below sets forth certain penetration information regarding the number of smartphones and wireless subscribers in Korea as of the dates indicated:

	As of December 31,
	2023			2022			2021
	(In thousands, except for percentage data)
Number of Smartphones		55,126			54,249			53,465
Total Number of Wireless Subscribers^(1)^		82,770			75,958			71,920
Penetration of Smartphones		66.6	%		71.4	%		74.3	%
(1)	Includes subscribers of non-mobile phone wireless services, such as services for tablet computers, wearable devices, IoT devices and others.
---	---

The decreases in the penetration rate of smartphones as of December 31, 2023 compared to December 31, 2022, and as of December 31, 2022 compared to December 31, 2021, were primarily due to a faster increase in the number of subscribers of non-mobile phone wireless services, such as tablet computers, wearable devices, IoT devices and others, as compared to the increase in the number of smartphones.

In addition to its well-developed wireless telecommunications sector, Korea has one of the largest Internet markets in the Asia Pacific region. From the end of 2010 to the end of 2023, the number of broadband Internet

access subscribers increased from approximately 17.2 million to approximately 24.1 million. In connection with such growth in broadband Internet usage, the number of IPTV subscribers has also increased rapidly. The table below sets forth certain information regarding broadband Internet access subscribers and IPTV subscribers as of the dates indicated:

	As of December 31,
	2023		2022		2021
	(In thousands)
Number of Broadband Internet Access Subscribers^(1)^		24,098		23,537		22,944
Number of IPTV Subscribers		21,583		21,289		20,628
(1)	Includes subscribers accessing Internet service using digital subscriber line, or xDSL, connections; cable modem connections; local area network, or LAN, connections; fiber-to-the-home, or FTTH, connections and satellite connections.
---	---
Item 4.B.	Business Overview
---	---

Overview

We are Korea’s leading wireless telecommunications services provider and continue to pioneer the commercial development and implementation of state-of-the-art wireless and fixed-line technologies and services as well as other new services and products utilizing our AI and digital infrastructure capabilities and our telecommunications platforms, including a broad range of IoT solutions, platform services, cloud services, smart factory solutions, subscription services, advertising and curated shopping services, metaverse platform-based services, AI solutions and enterprise AI services. Our operations are reported in three segments:

•	cellular services, which include wireless voice and data transmission services, sales of wireless devices, IoT solutions, platform services, cloud services, smart factory solutions, subscription services, advertising and curated shopping services, metaverse platform-based services, AI solutions and enterprise AI services;
•	fixed-line telecommunications services, which include fixed-line telephone services, broadband Internet services, advanced media platform services (including IPTV and cable TV services) and business communications services; and
---	---
•	other businesses, which include our T-commerce business and certain other miscellaneous businesses.
---	---

Our Business Strategy

We believe that the current trends in the Korean telecommunications industry are characterized by technological change, evolving consumer needs and increasing digital convergence. Against the backdrop of these industry trends, we aim to maintain our leading position in the Korean market for wireless telecommunications services and actively develop our next-generation growth businesses by leveraging our AI and digital infrastructure technologies. In pursuit of such objectives, we plan to further utilize AI technology and our big data analysis capabilities to develop and commercialize new products and services that are tailored to our customers’ evolving needs, as well as incorporate AI capabilities directly into many of the products and services we offer. In doing so, we plan to actively collaborate with the new ICT businesses operated by the Spin-off Portfolio Companies (comprising our former subsidiaries and investees that were spun off to SK Square pursuant to the Spin-off) as well as other affiliates of the SK Group and third parties. Through such efforts, we strive to become a socially respected AI Company as universally recognized by our customers, business partners and shareholders. To take advantage of evolving industry trends and further realize our corporate vision to become a socially respected AI Company, we have undertaken the following strategic initiatives:

•	Maintain our leadership in the wireless services business by offering innovative 5G services and customer-oriented products and services. We plan to maintain our leadership in the wireless services

<br>business by offering innovative 5G services that provide differentiated subscriber experiences. We also plan to promote the proliferation of 5G services by offering services and content that are specialized for the 5G environment, such as hands-on experience services, metaverse platform-based services and e-sports. In addition, we will continue to analyze the needs of our subscribers and enhance the quality and breadth of our wireless services by leveraging our AI technology and provide products and services that meet such needs.
•	Develop our next-generation growth businesses. We believe that we have evolved from being a domestic telecommunications provider in Korea to possessing the fundamental capabilities that enable us to pursue a broad range of collaboration in the field of ICT with both domestic and international partners, including the Spin-off Portfolio Companies. We have formed strategic partnerships with industry leaders to create synergies in various areas, such as AI technology, mobile edge computing (“MEC”) and e-sports, and we are continually expanding the areas for collaboration.
---	---
•	Develop our technological capabilities and new products and services to support our 5G network. We aim to continue developing cutting-edge technologies that will be adopted as the technological standard for 5G services. In addition, we will seek to apply our 5G infrastructure and capabilities to our various other key businesses to create unique new products and services geared to serve evolving customer needs. Furthermore, we aim to collaborate with various partners to identify new business opportunities that can potentially leverage our 5G network.
---	---
•	Pursue sustainable management to seek mutual growth with the broader society. The SK Management System, which is the business philosophy and foundation of the corporate culture of the SK Group, includes as a key component the goal of growing together with the broader society by contributing to its economic growth, creating social value and promoting environmentally friendly technology. In line with the “double bottom line” management policy, which aims to achieve long-term shareholder value while creating social value by leveraging our business capabilities, we strive to contribute to the well-being of all stakeholders and the enhancement of our corporate value in the long-term.
---	---

As part of our ongoing efforts to pursue such strategies, effective as of November 1, 2021, we conducted the Spin-off, pursuant to which we spun off our equity interests in certain subsidiaries and investees (comprising the Spin-off Portfolio Companies) engaged in semiconductor and certain other non-telecommunications businesses, including our security, e-commerce and other new ICT businesses (collectively comprising the Spin-off Businesses) to SK Square, a newly established holding company, and we distributed SK Square’s shares of common stock on a pro rata basis to the holders of our common stock. See “Certain Defined Terms and Conventions Used in this Annual Report” for the accounting treatment of the Spin-off in our consolidated financial statements included in this annual report.

More recently, in furtherance of our strategic emphasis on AI technology, we announced our updated vision of transforming into an AI Company in November 2022 and our AI Pyramid strategy in September 2023, which focuses on the three key aspects of (i) developing and expanding our AI infrastructure, (ii) applying AI technology to innovate our existing core business lines and promote the growth of our new growth businesses, and (iii) developing and expanding innovative AI services. Through the AI Pyramid strategy, we seek to strengthen our relationship with our customers through advances in AI technology and creation of AI services, integrating both internal research and development efforts and external partnerships and alliances. As part of such vision, we seek to enhance customer engagement levels and strengthen our customer relationships through “A.” (or “A dot”), an innovative mobile application that utilizes generative AI technology and provides users with AI-based personal assistant services, which was first introduced in May 2022 and officially launched in September 2023.

We have also been collaborating with leading Korean AI technology companies as well as other global telecommunications companies in order to accelerate our ongoing transformation to become an AI Company, including by forming the GTAA in July 2023 with Deutsche Telecom of Germany, e& of the United Arab Emirates and Singtel of Singapore, which was later joined by Softbank of Japan in February 2024. The members of the GTAA have agreed to establish a joint venture dedicated to the development of large-language models that

are specifically tailored to the needs of telecommunications companies, and also seek business opportunities in AI-related business areas.

We are also expanding our services to not only focus on connecting people through more traditional means of telecommunications but also through “Ifland,” our AI-driven metaverse services which we launched in July 2021, and our planned mobility services (including urban air mobility and autonomous driving, both of which are currently under development). Furthermore, we are building and expanding “AIX,” a new collaborative AI technology framework, through an alliance of leading Korean AI technology companies led by us, which strategy includes pursuing opportunities for acquisitions and investments in companies in business areas that would benefit from our AI and digital transformation capabilities, thereby increasing the enterprise values of such companies that in turn would ultimately increase our enterprise value. In addition, as part of our commitment to pursue sustainable management, we seek to make positive contributions to the society and environment by using AI technology to solve social challenges.

Cellular Services

We offer wireless voice and data transmission services, sell wireless devices and provide IoT solutions and innovative platform services through our cellular services segment. Our wireless voice and data transmission services are offered through our backbone networks that collectively can be accessed by approximately 99.0% of the Korean population. We had 33.7 million wireless subscribers, including MVNO subscribers leasing our networks, as of December 31, 2023, representing a market share of 40.7%, the largest market share among Korean wireless telecommunications service providers. We launched our wireless services using our 5G network in April 2019, and we are continually expanding our 5G network coverage and enhancing service quality. The table below sets forth the number of subscribers, including subscribers of MVNOs that lease our wireless networks, using our various digital wireless networks as of the dates indicated:

	As of December 31,
	2023		2022		2021
	(in thousands)
Network
5G		15,757		13,466		9,911
LTE		16,816		18,084		20,198
WCDMA		1,089		1,285		1,660
CDMA^(1)^		—		—		115
Total		33,662		32,836		31,884
(1)	In July 2020, we terminated our second generation wireless services using our CDMA network. CDMA subscribers as of December 31, 2021 consist of subscribers who had not upgraded to our other networks or terminated their subscriptions as of such date.
---	---

In 2023, 2022 and 2021, our cellular services segment revenue was Won 13,123.2 billion, Won 12,942.3 billion and Won 12,718.5 billion, respectively, representing 74.5%, 74.8% and 75.9%, respectively, of our consolidated revenue from continuing operations.

Wireless Services

We offer wireless voice transmission and data transmission services to our subscribers through our backbone networks. Our wireless telecommunications services are available to our subscribers receiving service under the SK Telecom brand. In addition, customers can obtain wireless telecommunications services that operate on our network from MVNOs that lease our wireless networks. We derive revenues from our wireless telecommunications service principally through monthly plan-based fees as described in “— Rate Plans” below.

We provide a voice-over-LTE service, known as our “HD Voice” service, to all of our LTE and 5G subscribers featuring high-quality voice transmission, fast call connection, voice-to-video call switching and digital content sharing during calls. We also offer our subscribers a wide range of wireless data transmissions

services. Our messaging service allows our subscribers to send and receive text, graphic, audio and video messages. In addition, our subscribers can access a wide variety of digital content and services through mobile applications providing music, video, gaming, news, commerce, metaverse community and financial services as well as solutions that enable subscribers to access the Internet and e-mail. We intend to continue to build our wireless data services as a platform for growth, extending our portfolio of wireless data services and developing new content for our subscribers.

Through service agreements with various foreign wireless telecommunications service providers, we offer cellular global roaming services, branded as our “T-Roaming” service. Global roaming services allow subscribers traveling abroad to make and receive calls using their regular mobile phone numbers. In addition, we provide global roaming service to foreigners traveling to Korea. In such cases, we generally receive a fee from the traveler’s local wireless telecommunications service provider.

Through our subsidiary SK Telink Co., Ltd. (“SK Telink”), we also operate our MVNO business under the brand “SK 7Mobile,” which we believe offers excellent quality at reasonable rates utilizing SK Telecom’s wireless networks. SK Telink is focused on developing low-cost distribution channels and targeting niche customer segments that have a lower average revenue per user than that of SK Telecom’s subscriber base.

In addition, we provide interconnection service to connect our networks to domestic and international fixed-line and other wireless networks. See “— Interconnection” below.

Wireless Device Sales

We offer several categories of wireless devices, including smartphones and basic phones, tablets and other Internet access devices and wearable devices that are sold through an extensive distribution network, which consists of authorized exclusive dealers and independent retailers, as well as branch offices and stores directly operated by us through our wholly-owned subsidiary, PS&Marketing. As of December 31, 2023, approximately 24.4 million, or 72.4%, of our subscribers (including MVNO subscribers leasing our networks) owned smartphones that have direct access to the Internet compared to approximately 24.3 million, or 74.1%, as of December 31, 2022, which decrease was primarily due to a faster increase in the number of non-mobile phone wireless devices, such as tablet computers, wearable devices, IoT devices and others, as compared to the increase in the number of smartphones. We purchase a substantial majority of our wireless devices from Samsung Electronics and Apple.

Smartphones and Basic Phones. We offer smartphones that are enabled to utilize our digital wireless networks and run on various operating systems, such as Apple iOS and Google Android. We also offer basic phones that have the ability to access wireless Internet services.

Tablets and Wearable Devices. We offer tablets and wearable devices, primarily comprising smart watches, which can access the Internet via our digital wireless networks and a Wi-Fi connection. The tablets and wearable devices run primarily on the Apple iOS and Google Android operating systems, and we provide targeted rate plans that are specific to such devices. See “— Rate Plans” below.

IoT Solutions

Through our IoT solutions business, we provide network access and enhanced services to support telemetry-type applications, which are characterized by massive machine-type communication (“mMTC”) wireless connections, to business customers. In order to promote the growth of our IoT solutions business, we deployed networks nationwide that are designed to support IoT devices, namely our high-speed LTE-M network in March 2016 and our low-cost Low-Power Wide-Area network based on LoRa technology (our “LoRa network”) in July 2016. In April 2018, we increased the battery efficiency of our IoT devices by launching our LTE Cat.M1 technology, and we have further enhanced our competitiveness in this business with our 5G network.

We provide network access and customized IoT solutions to our business customers. Our IoT services support devices that are used in a variety of market segments, including retail, utilities, security, automotive,

agriculture and data analytics. For example, our Cloud Energy Management Solution (“Cloud EMS”) business provides a one-stop cloud computing-based energy management platform that collects and analyzes energy usage data from business customers and offers solutions to optimize and reduce their energy consumption. As of December 31, 2023, Cloud EMS had more than 200 customers, mostly from energy-intensive industries such as the petrochemical industry as well as the luxury retail industry.

Platform Services

Through our platform services business, we seek to provide innovative AI products and services that meet our customers’ evolving needs in an increasingly connected world. In September 2016, we launched NUGU, the first intelligent AI service launched in Korea with Korean language capabilities based on advanced voice recognition technologies. Through cloud-based deep-learning technology, NUGU is designed to evolve on its own as it collects more data about its users over time.

In May 2022, we launched a beta-test version of A., which offers the ability to verbally communicate with the user and handle a variety of tasks on the user’s smartphone, including recording and summarizing calls, managing the user’s schedules, providing real-time interpretation service during calls and recommending and playing personalized music and video contents. We plan to continually strengthen the level of personalization offered, and expand the portfolio of services handled, by A., including through collaboration with third parties. We officially launched the application in September 2023.

Other New Businesses

In recent periods, we have launched a variety of new businesses leveraging our capabilities in telecommunications technology and ICT, and we are continuing to invest in these and other emerging new business areas, including the following:

•	Cloud services. We provide comprehensively managed cloud services in Korea, which entail ongoing and regular support and active administration services ranging from those relating to network, application, infrastructure and security, leveraging our advanced 5G MEC technology and platform. Customers that subscribe to our cloud services primarily include businesses that require secure and ultra-low latency communications, focusing on the game, media, logistics, healthcare, finance and manufacturing industries. We completed the construction of MEC infrastructure at four strategic locations during 2020 and we launched our first MEC-based cloud service, “5GX Edge Cloud,” in collaboration with Amazon Web Services in December 2020. In March 2022, in collaboration with Dell Technologies Inc. (“Dell”), we launched a MEC platform that combines our 5G MEC solution and Dell’s servers and began offering cloud services to global telecommunications companies. We have also entered into strategic partnerships with a number of other leading cloud service providers to pursue further collaboration in the 5GX Edge Cloud business. In February 2024, we made a minority equity investment in Lambda, a graphics processing unit (“GPU”) cloud service provider based in San Francisco, and plan to form a strategic partnership during 2024 to actively explore business opportunities in the global AI cloud market. We believe that such investment will enable us to secure a stable supply of GPUs for us to provide GPU-as-a-service to businesses as we seek to enter the global AI cloud and data center markets in furtherance of our organizational goal to transform into an AI Company.
•	Smart Factory Solutions. We provide tailored smart factory solutions that leverage our 5G and other wireless technology infrastructure as well as our capabilities in artificial intelligence-of-things technology and big data analysis to cater primarily to businesses in high-tech industries. Our smart factory solutions, which are typically provided on a subscription basis, cater to the various needs of our customers including those related to manufacturing process, quality control, equipment management, industrial safety and logistics.
---	---

•

Cloud services. We provide comprehensively managed cloud services in Korea, which entail ongoing and regular support and active administration services ranging from those relating to network, application, infrastructure and security, leveraging our advanced 5G MEC technology and platform. Customers that subscribe to our cloud services primarily include businesses that require secure and ultra-low latency communications, focusing on the game, media, logistics, healthcare, finance and manufacturing industries. We completed the construction of MEC infrastructure at four strategic locations during 2020 and we launched our first MEC-based cloud service, “5GX Edge Cloud,” in collaboration with Amazon Web Services in December 2020. In March 2022, in collaboration with Dell Technologies Inc. (“Dell”), we launched a MEC platform that combines our 5G MEC solution and Dell’s servers and began offering cloud services to global telecommunications companies. We have also entered into strategic partnerships with a number of other leading cloud service providers to pursue further collaboration in the 5GX Edge Cloud business. In February 2024, we made a minority equity investment in Lambda, a graphics processing unit (“GPU”) cloud service provider based in San Francisco, and plan to form a strategic partnership during 2024 to actively explore business opportunities in the global AI cloud market. We believe that such investment will enable us to secure a stable supply of GPUs for us to provide GPU-as-a-service to businesses as we seek to enter the global AI cloud and data center markets in furtherance of our organizational goal to transform into an AI Company.

•

Smart Factory Solutions. We provide tailored smart factory solutions that leverage our 5G and other wireless technology infrastructure as well as our capabilities in artificial intelligence-of-things technology and big data analysis to cater primarily to businesses in high-tech industries. Our smart factory solutions, which are typically provided on a subscription basis, cater to the various needs of our customers including those related to manufacturing process, quality control, equipment management, industrial safety and logistics.

---

•	Subscription service. In August 2021, we launched a subscription-based membership service under our “T Universe” brand name. T Universe currently offers several types of subscription packages, and a subscriber can choose from a variety of available benefits including free shipping and discount coupons on merchandise purchases made on the Amazon Global Store (which operates on Eleven Street’s 11st e-commerce platform), access to a cloud storage service, and discounts and/or coupons from various participating food and beverage store chains and delivery service providers, online video streaming and music services including YouTube Premium. Customers can also choose to subscribe to specific products or services. In order to continue expanding our T Universe membership base, we plan to pursue additional business partnerships with popular consumer brands and service providers to increase the number and appeal of the businesses that participate in the T Universe subscription program. We also plan to continue to invest in improving our customers’ user experience and strengthen the use of AI and digital technologies in our marketing efforts to promote to grow and evolve T Universe into an “AI-based subscription commerce platform.”
•	Metaverse. In July 2021, we launched a metaverse community platform called “Ifland.” Ifland, which is available as a mobile application on the Google Android and the Apple iOS operating systems, allows users to create personal avatars and communicate with other users by joining one or more of Ifland’s thousands of active virtual communities. Users can also create their own communities and virtual homes. In addition, businesses and public institutions have been actively promoting their services, products and events on the Ifland platform. As of December 31, 2023, Ifland was available in 50 countries around the world and had over 60 million cumulative downloads globally. We plan to continue enhancing our customers’ user experience by increasing the media and game contents available on the platform through collaboration with third-party content creators, publishers and other strategic partners. We have also begun supporting economic transactions on the Ifland platform by introducing virtual points that may be monetized into cash, and we have further enhanced the level of economic activities on the platform through the introduction of in-app purchases and the use of non-fungible token technologies.
---	---
•	Advertising and curated shopping services. We offer advertising services to businesses by leveraging our wireless telecommunications services platform. Our advertising services primarily consist of display advertising on our proprietary mobile applications for smartphones, including “T Phone” (which manages our wireless customers’ voice calls) and “T Membership” (which manages our customer loyalty program under the same name). In addition, we offer a text message-based curated shopping service under our “T Deal” brand. Our customers who have consented to the T Deal service receive a daily text message on their smartphones with a link to a broad range of merchandise with significant discounts that are specially curated to maximize customer interest by utilizing AI technology and big data.
---	---
•	Enterprise AI services. Our business customers have been increasingly seeking digital transformation by implementing AI technology, including generative AI, into their operations and business cycle. In order to meet such needs of our business customers, we have introduced various AI technology services, which we have been developing in order to improve our and our affiliated companies’ competitiveness, which are collectively referred to as “enterprise AI” services. Our enterprise AI services combine AI technology with connectivity and infrastructure technologies of our core telecommunications business as well as the underlying technologies of our other new growth businesses, and are offered in six categories, including generative AI, AI vision, AI robot, AI contact center, AI marketing and AI data.
---	---

Rate Plans

We offer our wireless telecommunications services on both a postpaid and prepaid basis. Substantially all of our subscribers received our wireless telecommunications services on a postpaid basis as of December 31, 2023. Postpaid accounts primarily represent retail subscribers under contract with SK Telecom pursuant to which a

subscriber is billed in advance a monthly fixed service fee in return for a monthly network service allowance and usage for outgoing voice calls and wireless data services beyond the allowance is billed in arrears, where payment of the total amount of the bill is due at the end of the month. The standard contract period for our rate plans is 24 months, although our subscribers have the option to enter into shorter term contracts or no fixed-term contract at all. We provide various subsidies and discounts, including handset subsidies, depending on the length of the contract and the subscriber’s chosen rate plan. Our prepaid service enables individuals to obtain wireless telecommunications services without a fixed-term contract by paying for all services in advance according to expected usage. We do not charge our customers for incoming calls, although we do receive interconnection charges from KT and other companies for calls from the fixed-line network terminating on our networks and interconnection revenues from other wireless network operators. See “— Interconnection” below.

We also charge our customers a 10.0% value-added tax, which is included in the price of all of our rate plans. We can offset the value-added tax we collect from our customers against value-added tax refundable to us by the Korean tax authorities. We remit taxes we collect from our customers to the Korean tax authorities. We record revenues in our financial statements net of such taxes.

Basic Rate Plans. We offer various postpaid account plans for mobile devices, tablets and smart watches that are designed to meet a wide range of subscriber needs and interests. Our 5G services are primarily provided through the “5GX” plans, which offer unlimited domestic voice minutes and text messaging and unlimited data transmission allowance per month and range from Won 69,000 to Won 125,000 per month. We also offer several types of lower-priced 5G rate plans, ranging from Won 39,000 to Won 59,000 per month, with smaller data transmission allowances per month compared to our 5GX plans that target subscribers who seek more affordable rate plans. Our representative smartphone rate plans for our LTE services are the “T” plans, which feature unlimited domestic voice minutes and text messaging and a fixed or unlimited data transmission allowance per month and range from Won 33,000 to Won 100,000 per month. We also offer “Direct” plans that are exclusively available through our online distribution channel, ranging from Won 27,000 to Won 69,000 per month for 5G services and from Won 22,000 to Won 48,000 per month for LTE services. Our “Voice Free” plans are available for our basic phones and feature a fixed allowance of voice minutes and 50 text messages per month with rates that range from Won 20,900 to Won 103,400 per month. We also offer a standard rate plan for Won 12,100 per month, through which the subscriber is charged per usage amount, other than on text message usage up to 50 messages per month.

In addition, we provide a variety of differentiated rate plans for our customer segments such as our “0” plans for smartphone users who are 34 years old or younger tailored for younger demographics, our “0 Teen” plans for teenagers who are 18 years old or younger, our “ZEM” plans for children who are 12 years old or younger, our “T Senior” LTE and 5G subscription plans for users who are 65 years or older, our “5G Happiness (Haengbok-nuri)” plans for customers with visual impairment or hearing loss and our “0 Hero” LTE plans for users who are performing mandatory military service.

We also offer bundled rate discount plans combining multiple wireless devices as well as those combining our wireless services with our fixed-line telecommunications services. In addition, we offer bundled rate plans that provide discounts for family members or co-inhabitants of the same household.

Data Add-on Rate Plans. We offer a variety of optional “add-on” rate plans and data coupons that are designed to meet a wide range of subscriber needs with respect to increased data usage that followed the widespread use of smartphones and faster transmission speeds. For example, for certain rate plan subscribers, we offer unlimited access to the wavve video streaming service and the Flo music streaming service through our “wavve and Data Plus” plan and “Flo and Data Plus” plan, respectively, at no additional cost, at a discounted rate or at the standard rate, depending on the subscribers’ basic rate plan.

Roaming Plans. “Baro Plan” is our representative international roaming plan for longer term travelers and provides fixed data transmission allowances of 3GB for Won 29,000, 6GB for Won 39,000, 12GB for Won

59,000 or 24GB for Won 79,000 that can be used in 190 countries. Subscribers who are 34 years old or younger receive an additional data allowance of 1GB. In addition, we offer monthly overseas travel-related benefits to subscribers of the Baro Plan, including discount coupons for overseas travel insurance. All of our roaming plans include free high-quality data voice calls and text messages to Korea through our T Phone application. We also provide to all of our roaming service subscribers an automatic roaming service called “Safe Automatic T Roaming,” which provides 30 minutes of voice calls per day (including three minutes of free voice calls) for a maximum of Won 10,000 (with voice calls in excess of 30 minutes per day incurring additional charges) without having to separately purchase a roaming plan.

Digital Wireless Network

We offer wireless voice and data transmission services throughout Korea using digital wireless networks, primarily consisting of our 5G network, LTE network, WCDMA network, Wi-Fi network and LoRa network. We continually upgrade and increase the capacity of our wireless networks to keep pace with advancements in technology, the growth of our subscriber base and the increased usage of voice and wireless data services by our subscribers. For more information about our capital expenditures relating to our wireless networks, see “Item 5.B. Liquidity and Capital Resources — Capital Requirements — Capital Expenditures.”

5G Network. 5G is the state-of-the-art wireless network that enables data to be transmitted at speeds faster than our LTE network with lower latency. We began the operation of our 5G network in December 2018 on a limited basis for business customers, beginning with a few major commercial districts in Seoul and other metropolitan areas. In April 2019, we launched wireless service plans using the 5G network following the commencement of sales of the first 5G-compatible smartphones, and we are in the process of further expanding our 5G network coverage. Our 5G network coverage currently includes all of the major metropolitan and other urban areas, as well as subway lines, in Korea, and we have been expanding our 5G network coverage in rural areas by constructing 5G networks that are shared with other mobile network operators in such areas. We expect to be able to provide full nationwide outdoor terrestrial coverage and substantially full nationwide coverage in large buildings by the end of 2024. Our 5G services provided a maximum data transmission speed of 2.75 Gbps, and our 5G penetration, which represents the number of our 5G subscribers as a percentage of our total number of subscribers, in each case including MVNO subscribers leasing our networks, was 46.8% as of December 31, 2023. We have also deployed our 5G network for mMTC connections relating to our IoT solutions.

We believe that our 5G technology and network infrastructure enable us to provide the fastest 5G data transmission network nationwide. In December 2023, the MSIT announced that our 5G network provided the fastest upload and download speeds among the three mobile network operators, KT, LG U+ and us. The nationwide average download speed of our 5G network was 988 Mbps compared to 949 Mbps for KT’s 5G network and 881 Mbps for LG U+’s 5G network.

LTE Network. LTE technology has become widely accepted globally as the standard fourth generation technology and enables data to be transmitted at speeds faster than our WCDMA network. Since first commencing our LTE services in July 2011, we have developed and launched various upgraded LTE networks and related services providing faster network speeds, enhanced connectivity and broader coverage areas. Our LTE penetration, which represents the number of our LTE subscribers as a percentage of our total number of subscribers, in each case including MVNO subscribers leasing our networks, increased to a peak of 79.3% as of December 31, 2019 compared to 49.3% as of December 31, 2013, before decreasing to 49.9% as of December 31, 2023 as a result of the ongoing customer migration to the 5G network. We expect that wireless services based on LTE technology will continue to be used by a significant portion of our subscriber base in the near future, despite the ongoing expansion of 5G network and gradual migration of wireless service users to the 5G network over time, and plan to continue to deploy improved LTE technology to increase the maximum data transmission speed of our services.

We believe that our advanced LTE technology and dense network infrastructure enable us to provide the fastest LTE data transmission network nationwide. In December 2023, the MSIT announced that our LTE

network provided the fastest upload and download speeds among the three mobile network operators, KT, LG U+ and us. The nationwide average download speed of our LTE network was 243 Mbps compared to 171 Mbps for KT’s LTE network and 122 Mbps for LG U+’s LTE network.

Wi-Fi Network. Wi-Fi technology enables our subscribers with Wi-Fi-capable devices such as smartphones, laptops and tablet computers to access mobile Internet. We started to build Wi-Fi access points in 2010 and, as of December 31, 2023, we had more than 120,000 Wi-Fi access points in public areas such as shopping malls, restaurants, coffee shops, subways and airports where, generally, the demand for high-speed wireless Internet service is high. While each Wi-Fi access point typically has a radius of approximately 20-30 meters, some of our Wi-Fi hot zones, which have multiple Wi-Fi access points, including those installed at public transportation facilities and amusement parks, have much wider service areas.

LoRa Networks. A Low-Power Wide-Area network based on LoRa technology is a type of telecommunications network designed to support communication among IoT devices. It can transmit data over tens of kilometers while consuming much less power than LTE networks, lowering costs for connectivity as well as lowering battery power usage. We completed the nationwide deployment of our LoRa network in July 2016. We expect that our LoRa network will provide the infrastructure necessary for the growth of not only our own IoT solutions business but also the IoT industry as a whole.

Network Infrastructure

The principal components of our wireless networks are:

•	base stations, which are physical locations equipped with transmitters, receivers and other equipment that communicate by radio signals with wireless handsets within range of the cell (typically a 3 to 40 kilometer radius);
•	switching stations, which switch voice and data transmissions to their proper destinations, which may be, for instance, a mobile phone of one of our subscribers (for which transmissions would originate and terminate on our wireless networks), a mobile phone of a KT or LG U+ subscriber (for which transmissions would be routed to KT’s or LG U+’s wireless networks, as applicable), a fixed-line telephone number (for which calls would be routed to the public switched telephone network of a fixed-line network operator), an international number (for which calls would be routed to the network of a long distance service provider) or an Internet site; and
---	---
•	transmission lines, which link base stations to switching stations and switching stations with other switching stations.
---	---

As of December 31, 2023, our 5G, LTE and WCDMA networks had an aggregate of 59,392 base stations. As we continue to expand our 5G network coverage, the number of our base stations is expected to increase accordingly.

To date, we have purchased substantially all of the equipment for our networks from Samsung Electronics, Ericsson-LG and Nokia. Most of the transmission lines we use, including virtually all of the lines linking switching stations, as well as a portion of the lines linking base stations to switching stations, comprise optical fiber lines that we own and operate directly. However, we have not undertaken to install optical fiber lines to link every base station and switching station. In places where we have not installed our own transmission lines, we have leased lines from KT and LG U+. We intend to increase the efficiency of our network utilization and provide optimal services by internalizing transmission lines.

We use a wireless network surveillance system. This system oversees the operation of base stations and allows us to monitor our main equipment located throughout the country from one monitoring station. The automatic inspection and testing provided to the base stations lets the system immediately rebalance to the most suitable setting, and the surveillance system provides for automatic dispatch of repair teams and quick recovery in emergency situations.

Marketing, Distribution and Customer Service

Marketing. Our marketing strategy is focused on offering solutions tailored to the needs of our various customer segments, promoting our brand and leveraging our extensive distribution network. Our marketing plan includes a coordinated program of television, print, radio, outdoor signage, Internet and point-of-sale media promotions designed to relay a consistent message across all of our markets. We market our wireless products and services under the “T” brand, which signifies the centrality of “Telecommunications” and “Technology” to our business and also seeks to emphasize our commitment to providing “Top” quality, “Trustworthy” products and services to our customers.

We have implemented certain information technology improvements in connection with our marketing strategy, including customer management systems, as well as more effective information security controls. We believe these upgrades have enhanced our ability to process and utilize marketing- and subscriber-related data, which, in turn, has helped us to develop more effective and targeted marketing strategies. We currently operate a customer information system designed to provide us with an extensive customer database. Our customer information system includes a billing system that provides us with comprehensive account information for internal purposes and enables us to efficiently respond to customer requests. Our customers can also change their rate plans, verify the charges accrued on their accounts, receive their bills online and send text messages to our other subscribers through our website at www.tworld.co.kr and through our “T world” mobile application.

We strive to improve subscriber retention through our T Membership program, which is a membership service available to our wireless subscribers. Our T Membership program provides various membership benefits to its members such as discounts with our membership partners for dining, shopping, entertainment and travel, membership points accumulation, access to our online membership shopping mall and invitations to various promotional events. Although our competitors also have similar membership programs, we believe that our T Membership program has a competitive advantage over our competitors’ membership programs due to our large subscriber base and breadth of membership benefits.

Distribution. We use a combination of an extensive network, including branch offices and stores, directly operated by us through our subsidiary, PS&Marketing, more than 2,900 authorized exclusive dealers and an extensive network of independent retailers in order to increase subscriber growth while reducing subscriber acquisition costs.

As part of our initiative to provide a differentiated customer service experience, we operate T Premium Stores that allow our potential and existing subscribers to receive detailed information on our subscription services. As of December 31, 2023, we operated 1,065 T Premium Stores.

In addition, we operate an online distribution channel, “T Direct Shop,” through which subscribers can conveniently purchase wireless devices and subscribe to our services online. We also operate a dedicated online shop on 11st, our former subsidiary Eleven Street’s e-commerce marketplace. In light of increasing customer preference for online service, in part due to the COVID-19 pandemic, the level of distribution of our wireless devices and our services through online channels has significantly increased in recent years. We intend to continue to develop our online distribution channel to leverage our offline distribution capabilities to provide convenience and additional value to our subscribers. For example, subscribers purchasing wireless devices through T Direct Shop can opt to pick up their devices at one of our offline stores.

Currently, authorized dealers are entitled to an initial commission for each new subscriber registered by the dealer, as well as an average ongoing commission calculated as a percentage of that subscriber’s monthly plan-based rate for the first five years. In order to strengthen our relationships with our exclusive dealers, we offer a dealer financing plan, pursuant to which we provide to each authorized dealer a loan of up to Won 4.0 billion (Won 5.0 billion if collateral is pledged) which can be used for operational expenditures with a repayment period of up to 11 months. We also provide loans to our authorized dealers for financing deposits and key money in connection with securing retail space with a repayment period of up to 30 months. As of December 31, 2023, we had an aggregate of Won 69.6 billion outstanding in loans to authorized dealers.

Customer Service. We provide high-quality customer service directly through our two subsidiaries, Service Ace Co., Ltd. and Service Top Co., Ltd., rather than rely on outsourcing. SK O&S Co., Ltd. operates our switching stations and related transmission and power facilities and offers quality customer service primarily to our business customers. We have held the top position with respect to our telecommunications service in Korea’s leading three customer satisfaction indices, the National Customer Satisfaction Index, the Korean Customer Satisfaction Index and the Korean Standard-Service Quality Index, for 26 years, 26 years and 24 years, respectively.

Fixed-line Telecommunications Services

We offer fixed-line telephone, broadband Internet and advanced media platform services (including IPTV and cable TV services) and business communications services through our fixed-line telecommunications services segment. Our fixed-line telecommunications services are provided by our subsidiary, SK Broadband. The following table sets forth historical information about our subscriber base for our fixed-line telecommunications services for the periods indicated:

	As of December 31,
	2023		2022		2021
	(in thousands)
Fixed-Line Telephone (including VoIP) ^(1)^		3,464		3,559		3,634
Broadband Internet ^(2)^		6,926		6,704		6,581
IPTV ^(3)^		6,728		6,504		6,137
Cable TV		2,821		2,819		2,863
(1)	Includes subscribers to VoIP services of SK Broadband.
---	---
(2)	Excludes dedicated broadband Internet lines for Internet cafes.
---	---
(3)	Includes subscribers to SK Broadband’s B tv service and video-on-demand only service subscribers.
---	---

In 2023, 2022 and 2021, our fixed-line telecommunications services segment revenue was Won 3,928.0 billion, Won 3,813.0 billion and Won 3,677.7 billion, respectively, representing 22.3%, 22.0% and 22.0%, respectively, of our consolidated revenue from continuing operations.

As part of our efforts to enhance our capabilities and increase our market share in the fixed-line business, we completed the Tbroad Merger in April 2020. We currently own approximately 74.4% of SK Broadband’s total outstanding shares. See “Item 3.D. Risk Factors — Risks Relating to Our Business — We may fail to successfully complete, integrate or realize the anticipated benefits of our new acquisitions, joint ventures or other strategic alternatives or corporate reorganizations, including the Spin-off, and such transactions may negatively impact our business.”

Fixed-line Telephone Services

Our fixed-line telephone services comprise local, domestic long distance, international long distance and VoIP services. VoIP is a technology that transmits voice data through an Internet Protocol network. As of December 31, 2023, we had approximately 3.5 million fixed-line telephone subscribers (including subscribers to VoIP services of SK Broadband). Our fixed-line telephone services are primarily offered under the “B phone” brand name. A portion of our fixed-line telephone services were previously provided through the VoIP services of our subsidiary SK Telink that targeted corporate customers, which business was acquired by SK Broadband in April 2021.

Broadband Internet Access Services

Our broadband Internet access network covered a substantial majority of households in Korea as of December 31, 2023. As of December 31, 2023, we had approximately 6.9 million broadband Internet access

subscribers. We offer broadband Internet access products with various throughput speeds, ranging from “Giga Premium,” which is up to 10 times faster than data transmission speeds on networks utilizing FTTH technology and allows for data transmission at a maximum speed of 1 Gbps, to “Giga Premium×10,” which provides data transmission speeds of up to 10 Gbps.

Advanced Media Platform (including IPTV and Cable TV Services)

As part of our initiative to be the leading next-generation platform provider, we provide an advanced media platform with various media content and service offerings.

We have offered video-on-demand services since 2006 and launched real-time IPTV services in 2009. We currently offer IPTV services under the brand name “B tv” with access to as many as 259 high definition channels depending on the subscription service as of December 31, 2023, as well as pay-per-view and subscription-based video-on-demand services providing a wide range of media content, including recent box office movie releases, popular U.S. and other foreign TV shows and various children’s TV programs. We also offer “B tv UHD,” which is an ultra-high definition IPTV service and has a resolution that is four times as high as the standard high definition broadcasting service in the IPTV industry. As of December 31, 2023, we had approximately 6.7 million IPTV subscribers. Since 2018, we have unveiled a number of smart set-up boxes that incorporate voice recognition and command capabilities as well as AI-based services that utilize our proprietary NUGU platform and, in some cases, Google Assistant capabilities.

In November 2021, we launched our “Apple TV 4K” set top box in collaboration with Apple, which offers a convenient solution for customers to experience our high definition IPTV services as well as other types of Apple iOS-based entertainment services (such as the Apple TV+ video streaming service) while providing seamless integration with other Apple iOS-based hardware. The Apple TV+ video streaming service is also available on other types of our latest set top boxes. In December 2023, we introduced “AI B tv,” Korea’s first AI-powered personalized IPTV service. Once a set top box is turned on, AI B tv automatically recognizes the user and provides hyper-personalized content experience including recommending video-on-demand and other content based on the user’s viewing history analyzed through AI technology. We plan to integrate T-commerce capabilities into AI B tv and allow users to concurrently search for and purchase the apparel and accessories that appear in the video-on-demand content, which are recognized through AI technology. We also plan to further develop and improve our AI B tv service by integrating A. and generative AI technology.

Following the Tbroad Merger, we have been offering cable TV services under the “B tv Cable” brand with access to as many as 230 channels. As of December 31, 2023, we had approximately 2.8 million cable TV subscribers.

In January 2021, in order to strengthen our content generation capabilities, we established a new subsidiary, Media S Co., Ltd. (“Media S”), which currently operates two TV channels, “Channel S,” which primarily broadcasts entertainment contents, and “Channel S Plus,” which specializes in regional contents. Some of the contents broadcasted on these two channels are original contents co-produced by Media S and leading entertainment production companies. We plan to further invest in developing and procuring additional original video contents to increase the attractiveness of the channels operated by Media S.

We also offer advertising services on our advanced media platform, primarily consisting of advertisements on video-on-demand and streaming contents and our TV channels.

We continue to expand the scope of our media services and content offerings to provide our subscribers with a vast library of high-quality content that can be accessed through our wireless networks and our fixed-line network, which we believe will also increase the appeal of our advanced media platform to businesses as an advertising platform.

Business Communications Services

We offer other business communications services to our business customers, including corporations and government entities. Our business communications services include leased line solutions, Internet data center solutions and network solution services.

Our leased line solutions are exclusive lines that allow point-to-point connection for voice and data traffic between two or more geographically separate points. We hold a license to operate leased line services on a nationwide basis in Korea and also use international transmission lines to provide leased line services to other countries. Our leased line services enable high volumes of data to be transmitted swiftly and reliably. We also provide back-up storage for transmitted data. Through our Internet data centers, we provide our business subscribers with server-based support including co-location, dedicated server hosting and cloud computing services. Our network solution service utilizes our network infrastructure and voice platform to provide 24-hour monitoring and control of our customers’ networks. Through this service, we conduct remote monitoring of our customers’ data and voice communications infrastructure and network and traffic conditions, and carry out preventive examinations and on-site visits.

Rate Plans

For our residential customers, we offer both bundled rate plans for a combination of our fixed-line service offerings as well as individual rate plans for each separate service offering. Bundled rate plans are offered at a discount compared to subscribing to the same services through individual rate plans. Approximately 85% of subscribers to our broadband Internet services subscribe to two or more of our services through our bundled rate plans. Bundled rate plans for a combination of fixed-line telephone, broadband Internet access and IPTV or cable TV services, which are subject to a contract of one to three years, range from Won 19,800 to Won 67,100 per month, depending on the services included and the length of the contract. We also offer bundled rate plans combining our fixed-line telecommunications services with our wireless services and physical security services, respectively, as well as bundled rate plans that provide discounts for family members or co-inhabitants of the same household.

Our “5,000 minute” plan for subscribers to our fixed-line telephone service features 5,000 voice minutes for domestic land-to-land calls for a fixed rate and range from Won 7,700 to Won 11,550 per month depending on whether or not the subscriber opts for a long-term contract and if so, the length of the contract period. We offer individual fixed-rate plans for our broadband Internet access service that range from Won 22,000 to Won 104,500 per month depending on the data throughput speed and existence and length of a contract. We offer individual fixed-rate plans for our IPTV and cable TV services that range from Won 4,400 to Won 25,300 per month depending on the number of channels provided and existence and length of a contract. In addition, subscribers can purchase individual videos on demand or subscribe to certain paid content on a periodic basis.

With respect to our business communications services, we offer rates that are tailored to the specific needs of our business customers. We also charge certain installation fees and equipment rental fees as well as other ancillary fees with respect to certain of our fixed-line telecommunications services.

Marketing, Distribution and Customer Service

We focus on bringing our fixed-line telephone, broadband Internet and advanced media platform services (including IPTV and cable TV services) to residential users, and various business communications services to corporate users. We market our fixed-line telecommunications products and services under the “B” brand. Our “B” brand signifies our pursuit of creating a “Borderless” media ecosystem with “Beloved” content offerings to transform our business to go “Beyond” simply offering connectivity to customers. It also seeks to emphasize our commitment to stand “Beside” our customers to “Bridge” their worlds, leading to “Bravo” and “Blissful” customer experience. Our “B” brand also strengthens our shared identity with our wireless service’s “T” brand.

We operate an extensive distribution network, including regional marketing branch offices and numerous customer centers, large retail stores and authorized dealers across Korea, in order to increase subscriber growth while reducing subscriber acquisition costs. In addition, SK Telecom’s direct retail stores and authorized dealers for wireless telecommunications services also market our fixed-line telephone, broadband Internet and advanced media platform services (including IPTV and cable TV services), which we believe has contributed to the increase in the number of subscribers to such services. We have contracts with our customer centers to sell our services exclusively. These centers receive a commission for each service contract and installation contract secured. Customer centers often enter into sub-contracts with smaller distribution outlets within their area to increase their sales coverage and engage in telemarketing efforts. Authorized dealers are entitled to an initial commission for each new subscriber registered by the dealer.

In addition, we operate an online distribution channel, “B Direct Shop,” through which subscribers can conveniently subscribe online to our pay TV, broadband Internet and residential fixed-line telephone services. In light of increasing customer preference for online service, in part due to the COVID-19 pandemic, the level of distribution of our services through the B Direct Shop has consistently increased in recent years. We intend to continue to develop our online distribution channel to leverage our offline distribution capabilities to provide convenience and additional value to our subscribers.

Sales to business subscribers are handled through our in-house sales group as well as a small-scale distribution network. Our in-house sales group focuses on large business clients such as major corporations, public institutions and governmental agencies. Our small-scale distribution network, on the other hand, targets smaller business clients such as small businesses and sole proprietorship businesses.

Other Businesses

We strive to continually diversify our products and services and develop new businesses that we believe are complementary to our existing products and services, which we include in our other businesses segment. In 2023, 2022 and 2021, the revenue of our other businesses segment, which primarily consisted of our T-commerce and portal service businesses following the elimination of our discontinued operations and re-segmentation of certain of our businesses reflecting the effect of the Spin-off (see “Item 4.A. History and Development of the Company” and “Item 5.A. Operating Results — Overview”), was Won 557.3 billion, Won 549.7 billion and Won 352.4 billion, respectively, representing 3.2%, 3.2% and 2.1%, respectively, of our consolidated revenue from continuing operations.

T-Commerce

We operate a T-commerce network, “SK stoa,” through our consolidated subsidiary SK Stoa, which offers a broad assortment of goods and services through pre-recorded television programming. The goods and services promoted on SK stoa’s T-commerce programming can be purchased through telephone orders, SK stoa’s mobile application or online open marketplace, or a virtual application appearing on the television screen using the viewer’s remote controller. Since 2019, SK Stoa has offered searchable shopping programming that is available to viewers at their convenience by utilizing video-on-demand capabilities, and it is continually enhancing the level of personalized product and service recommendations offered by such platform by leveraging our AI technology and wealth of customer data. SK Stoa also operates several private fashion and health supplement brands, and it is planning to further strengthen its portfolio of exclusively distributed high-margin products in fashion, health and beauty. SK stoa also acts as the exclusive T-commerce distributor for certain products and services of SK Group companies, such as food, electronics, home appliances and car rentals.

Portal Service

We offer a portal service under our “Nate” brand name through SK Communications. Nate can be accessed through its website, www.nate.com, or through its mobile application. Nate offers a wide variety of content and

services, including Nate Search, an Internet search engine, Nate News, which provides a library of articles about current events, sports, entertainment and culture, and Nate Pann, a user-generated content service as well as access to free e-mail accounts through Nate Mail.

Online Employee Benefits Management and Training Services

In February 2022, we indirectly re-acquired a 100.0% equity interest in SK M&Service, which provides online corporate employee benefits management and training services to Korean businesses and public institutions, through our wholly-owned subsidiary PS&Marketing, for Won 72.9 billion from SK Planet. We believe that such acquisition will strengthen our online distribution capabilities and create opportunities for synergies with our other businesses in the ICT sector.

Interconnection

Our wireless and fixed-line networks interconnect with the public switched telephone networks operated by KT and SK Broadband and, through their networks, with the international gateways of KT and LG U+, as well as the networks of the other wireless telecommunications service providers in Korea. These connections enable our subscribers to make and receive calls from telephones outside our networks. Under Korean law, certain service providers, including us, are required to permit other service providers to interconnect to their networks. If a new service provider desires interconnection with the networks of an existing service provider but the parties are unable to reach an agreement within 90 days, the new service provider can appeal to the KCC.

Domestic Calls

Guidelines issued by the MSIT require that all interconnection charges levied by a regulated carrier take into account (i) the actual costs to that carrier of carrying a call or (ii) imputed costs. The MSIT determines interconnection rates applicable to each carrier based on changes in traffic volume, taking into account other factors such as research results, competition and trends in technology development.

Wireless-to-Fixed-line. According to our interconnection arrangement with KT, for a call from our wireless network to KT’s fixed-line network, we collect the usage rate from our wireless subscriber and in turn pay KT the interconnection charges. Similarly, KT pays interconnection charges to SK Broadband for a call from KT’s wireless network to SK Broadband’s fixed-line network. The interconnection rate applicable to both KT and SK Broadband was Won 7.22 per minute, Won 7.59 per minute and Won 7.96 per minute for 2023, 2022 and 2021, respectively.

Fixed-line-to-Wireless. The MSIT determines interconnection arrangements for calls from a fixed-line network to a wireless network. For a call initiated by a fixed-line user to one of our wireless subscribers, the fixed-line network operator collects our usage fee from the fixed-line user and remits to us an interconnection charge. Interconnection with KT accounts for substantially all of our fixed-line-to-wireless interconnection revenue and expenses. The interconnection rate paid by fixed-line network service providers to each wireless network service provider was Won 9.17 per minute, Won 9.65 per minute and Won 10.33 per minute for 2023, 2022 and 2021, respectively.

Wireless-to-Wireless. Interconnection charges also apply to calls between wireless telephone networks in Korea. Under these arrangements, the operator originating the call pays an interconnection charge to the operator terminating the call. The applicable interconnection rate is the same as the fixed-line-to-wireless interconnection rate set out in the table above.

Our revenues from the wireless-to-wireless interconnection charges were Won 401.3 billion in 2023, Won 438.9 billion in 2022 and Won 458.6 billion in 2021. Our expenses from these charges were Won 392.4 billion in 2023, Won 434.8 billion in 2022 and Won 459.6 billion in 2021.

International Calls and International Roaming Arrangements

With respect to international calls, if a call is initiated by our wireless subscribers, we bill the wireless subscriber for the international charges of KT, LG U+ or SK Broadband, and we receive interconnection charges from such operators. If an international call is received by our subscriber, KT, LG U+ or SK Broadband pays interconnection charges to us based on our imputed costs.

To complement the services we provide to our subscribers in Korea, we offer international voice and data roaming services. We charge our subscribers usage fees for global roaming service and, in turn, pay foreign wireless network operators fees for the corresponding usage of their network. For a more detailed discussion of our global roaming services, see “— Wireless Services” above.

Competition

We operate in highly saturated and competitive markets, and we believe that our subscriber growth is affected by many factors, including the expansion and technical enhancement of our networks, the development and deployment of new technologies, the effectiveness of our marketing and distribution strategy, the quality of our customer service, the introduction of new products and services, competitive pricing of our rate plans, new market entrants and regulatory changes.

The following table shows the market share information, based on number of subscribers, as of December 31, 2023, for the following markets.

	Market Share (%)
	SK Telecom			KT			LG U+			Others
Wireless Service ^(1)^		40.7	%		29.3	%		30.0	%		—	%
Fixed-Line Telephone (including VoIP)		15.7			54.2			18.7			11.5
Broadband Internet		28.7			40.8			21.4			9.1
Pay TV ^(2)^		26.1	^(3)^		36.5	^(4)^		24.7	^(5)^		12.8
(1)	Includes MVNO subscribers that lease the wireless networks of the respective mobile network operator.
---	---
(2)	Includes video-on-demand only service subscribers. Market share is expressed as a percentage of the pay TV market (which includes IPTV, cable TV and satellite TV).
---	---
(3)	Consists of 18.4% from our IPTV service and 7.7% from our cable TV service.
---	---
(4)	Consists of 25.7% from KT’s IPTV service, 7.3% from its satellite TV service provided through KT Skylife and 3.5% from KT’s cable TV service provided through HCN, which was acquired by KT in August 2021.
---	---
(5)	Consists of 14.9% from LG U+’s IPTV service and 9.8% from its cable TV service provided through LG HelloVision, a subsidiary of LG U+.
---	---

Cellular Services

As of December 31, 2023, we had 33.7 million subscribers, representing a market share of approximately 40.7%, including MVNO subscribers leasing our networks. As of December 31, 2023, KT and LG U+ had 24.3 million and 24.8 million subscribers, respectively, representing approximately 29.3% and 30.0%, respectively, of the total number of wireless subscribers in Korea on such date, each including MVNO subscribers leasing its networks.

In 2023, we had 1.7 million activations and 2.0 million deactivations. For 2023, our monthly churn rate ranged from 0.7% to 0.9%, with an average monthly churn rate of 0.8%, which remained unchanged compared to

In 2023, we gained 48.4% of the total number of new wireless subscribers and subscribers that migrated to a different wireless telecommunications service provider, compared to KT with 28.5% and LG U+ with 23.1%, in each case excluding MVNO subscribers.

In recent years, a number of new entrants have entered the MVNO business, including affiliates of leading financial institutions in Korea. Some of these new entrants have engaged in aggressive marketing campaigns and promotional discounts while leveraging the brand power of their affiliates as part of their efforts to gain subscribers. Partly as a result of such efforts, the combined market share of MVNOs has increased in recent years from 14.4% as of December 31, 2021 to 16.9% as of December 31, 2022 and 19.2% as of December 31, 2023, in terms of number of subscribers.

In addition, other companies may enter the wireless network services market, including in connection with the allocation of 800 MHz of bandwidth in the 28 GHz spectrum in January 2024 to Stage X, which is required, among other things, to install 6,000 base stations across Korea that use the 28 GHz spectrum by 2027. See “— Law and Regulation — Frequency Allocation” and “Item 3.D. Risk Factors — Risks Relating to Our Business — Our businesses are subject to various types of Government regulation, and any change in Government policy relating to the telecommunications industry could have an adverse effect on our business, financial condition and results of operations.” For a description of the risks associated with the competitive environment in which we operate, see “Item 3.D. Risk Factors — Risks Relating to Our Business — Competition may reduce our market share and harm our business, financial condition and results of operations.”

Historically, competition in the wireless telecommunications business had caused us to significantly increase our marketing and advertising expenses from time to time depending on the prevailing competitive landscape, with marketing expenses as a percentage of SK Telecom’s revenue, on a separate basis, reaching a peak of 28.2% in 2012. Such percentage was 26.6% in 2021, 24.7% in 2022 and 24.2% in 2023. We believe that the maturity of the overall wireless telecommunication market and the implementation of the MDDIA, which prohibits wireless telecommunications service providers from unfairly providing discriminatory subsidies based on certain criteria, have contributed to the general stabilization of our marketing expenses in recent years. For a more detailed discussion of the MDDIA, including the Government’s recent indication to seek its abolishment in order to encourage wireless service providers to offer more differentiated customer benefits to consumers, see “— Law and Regulation — Rate Regulation” below.

We face competition from KT and LG U+ as well as other platform service providers in our other cellular service businesses. For example, our Smart Home service competes with KT’s Giga IoT Home service and LG U+’s IoT@Home service.

Fixed-Line Telecommunications Services

Our fixed-line telephone service competes with KT and LG U+ as well as providers of other VoIP services. As of December 31, 2023, our market share of the fixed-line telephone and VoIP service market was 15.7% (including the services provided by SK Broadband) in terms of number of subscribers compared to KT with 54.2% and LG U+ with 18.7%.

We are the second-largest provider of broadband Internet access services in Korea in terms of both revenue and subscribers, and our network covered a substantial majority of households in Korea as of December 31,

As of December 31, 2023, our market share of the broadband Internet market was 28.7% in terms of number of subscribers compared to KT with 40.8% and LG U+ with 21.4%.

Our IPTV and cable TV services compete with other providers of pay TV services, including KT, LG U+ and cable companies. As of December 31, 2023, our market share of the pay TV market (which includes IPTV, cable TV and satellite TV) in terms of number of subscribers was 26.1% compared to KT with 36.5% (including its IPTV, cable TV and satellite TV services) and LG U+ with 24.7% (including its IPTV and cable TV services), and the collective market share of other pay TV providers was 12.8%. Furthermore, our IPTV and cable TV services are facing an increasing level of competition from global operators of online video streaming platforms, such as YouTube, Netflix, Disney Plus and Apple TV, leading domestic video streaming platforms such as TVING, Wavve (which is seeking to merge with TVING pursuant to a memorandum of understanding entered into in December 2023), Coupang Play and Watcha, and the video services offered by leading domestic online and mobile search and communications platforms including NAVER and Kakao, as such services continue to become increasingly popular to serve as a substitute to traditional television programming.

Over the past few years, the Korean fixed-line telecommunications industry has gone through significant consolidation involving major pay television service providers. We completed the Tbroad Merger in April 2020, following which we became the second-largest pay TV provider in Korea in terms of number of subscribers as of December 31, 2023. In December 2019, LG U+ acquired a majority equity stake in LG HelloVision. In August 2021, KT acquired HCN, a major Korean cable TV service provider, through its subsidiary KT Skylife. Such transactions, as well as further consolidation in the fixed-line telecommunications industry, may result in increased competition, as the entities emerging from such consolidation and other remaining players in the industry may actively pursue expanding or protecting their respective market shares.

Other Investments and Relationships

We have investments in a number of other businesses and companies and have entered into various business arrangements with other companies. For example, we formed a strategic alliance in October 2019 with Kakao, a Korean Internet company and the operator of Korea’s most popular mobile messaging application, to collaborate in the ICT sector through the sale of 1,266,620 of our treasury shares to Kakao, representing a 1.6% interest, for Won 300.0 billion and a concurrent issuance by Kakao of 2,177,401 of its shares, representing a 2.5% interest, to us for Won 302.3 billion. In addition, in July 2022, we entered into a strategic alliance with Hana Financial Group, a leading financial holding company in Korea with subsidiaries having significant presences in commercial banking, credit card business, securities brokerage and insurance, among others, to seek synergies through convergence between finance and ICT technology. As part of such strategic alliance, we transferred the entirety of our 15.0% interest in HanaCard for Won 330.0 billion in July 2022 and acquired 8,630,949 shares of Hana Financial Group (representing a 2.9% interest) for Won 330.0 billion between July and November 2022, and HanaCard acquired 1,307,471 common shares of us (representing a 0.6% interest) for Won 68.4 billion between July and September 2022.

Law and Regulation

Overview

Korea’s telecommunications industry is subject to comprehensive regulation by the MSIT, which is responsible for information and telecommunications policies. The MSIT regulates and supervises a broad range of communications issues, including:

•	entry into the telecommunications industry;

•	scope of services provided by telecommunications service providers;
•	allocation of radio spectrum;
---	---
•	setting of technical standards and promotion of technical standardization;
---	---
•	rates, terms and practices of telecommunications service providers;
---	---
•	interconnection and revenue-sharing between telecommunications service providers;
---	---
•	research and development of policy formulation for information and telecommunications; and
---	---
•	competition among telecommunications service providers.
---	---

The MSIT is charged with regulating information and telecommunications and the KCC is charged with regulating the public interest aspects of and fairness in broadcasting.

Telecommunications service providers are currently classified into two categories: network service providers and value-added service providers. We are classified as a network service provider because we provide telecommunications services with our own telecommunications networks and related facilities. As a network service provider, we were previously required to obtain a license from the MSIT for the services we provide. However, an amendment to the Telecommunications Business Act, pursuant to which companies meeting certain regulatory criteria may become a network service provider without a separate license requirement, went into effect in June 2019. Our licenses permit us to provide cellular services, third generation wireless telecommunications services using WCDMA and WiBro technologies, fourth generation wireless telecommunications services using LTE technology and fifth generation wireless telecommunications services using 5G technology.

The MSIT may revoke our licenses or suspend any of our businesses if we fail to comply with its rules, regulations and corrective orders, including the rules restricting beneficial ownership and control and corrective orders issued in connection with any violation of rules restricting beneficial ownership and control or any violation of the conditions of our licenses. Alternatively, in lieu of suspension of our business, the MSIT or, depending on the subject matter of the violation, the KCC may levy a monetary penalty of up to 3.0% of the average of our annual revenue for the preceding three fiscal years. A network service provider that wants to cease its business or dissolve must notify its users 60 days prior to the scheduled date of cessation or dissolution and obtain MSIT approval.

In the past, the Government has stated that its policy was to promote competition in the Korean telecommunications market through measures designed to prevent the dominant service provider in any such market from exercising its market power in such a way as to prevent the emergence and development of viable competitors. While all network service providers are subject to MSIT regulation, we are subject to increased regulation because of our position as the dominant wireless telecommunications services provider in Korea.

Competition Regulation

The KCC is charged with ensuring that network service providers engage in fair competition and has broad powers to carry out this goal. If a network service provider is found to be in violation of the fair competition requirement, the KCC may take corrective measures it deems necessary, including, but not limited to, prohibiting further violations, requiring amendments to the articles of incorporation or to service contracts with customers, requiring the execution or performance of, or amendments to, interconnection agreements with other network service providers and prohibiting advertisements to solicit new subscribers. The KCC is required to notify the Minister of the MSIT upon ordering certain corrective measures.

In addition, we qualify as a “market-dominating business entity” under the Fair Trade Act. Accordingly, we are prohibited from engaging in any act of abusing our position as a market-dominating entity, such as

unreasonably determining, maintaining or altering service rates, unreasonably controlling the rendering of services, unreasonably interfering with business activities of other business entities, hindering unfairly the entry of newcomers or substantially restricting competition to the detriment of the interests of consumers.

Because we are a member company of the SK Group, which is a large business group as designated by the KFTC, we are subject to the following restrictions under the Fair Trade Act:

•	Restriction on debt guarantee among affiliates. Any affiliate within the SK Group may not guarantee the debts of another domestic affiliate, except for certain guarantees prescribed in the Fair Trade Act, such as those relating to the debts of a company acquired for purposes of industrial rationalization, bid deposits for overseas construction work or technology development funds.
•	Restriction on cross-investment. A member company of the SK Group may not acquire or hold shares in an affiliate belonging to the SK Group that owns shares in the member company.
---	---
•	Restrictions on circular investments. A member company of the SK Group may not acquire or hold shares which would constitute “circular investments” in an affiliate company which also forms part of the SK Group where “circular investments” refer to a cross-affiliate shareholding relationship under which three or more affiliate companies become connected through cross affiliate shareholdings by owning shares in other affiliates or by becoming an entity whose shares are owned by other affiliates.
---	---
•	Public notice of board resolution on large-scale transactions with specially related persons. If a member company of the SK Group engages in a transaction with a specially related person in an amount exceeding the lesser of (1) Won 10 billion and (2) 5.0% of the larger of the total capital or capital stock of the member company (provided, however, in cases where the total capital or capital stock of the member company is less than Won 500 million, the threshold set forth in (1) above is set at Won 500 million), the transaction must be approved by a resolution of the member company’s board of directors and the member company must publicly disclose the transaction.
---	---
•	Restrictions on investments by subsidiaries and sub-subsidiaries of holding companies. The Fair Trade Act prohibits subsidiaries of holding companies from investing in, or holding shares of common stock of, domestic affiliates that belong to the same large business group, unless such domestic affiliates are their own subsidiaries. Furthermore, any subsidiaries of a holding company’s subsidiaries (“sub-subsidiaries”) are prohibited from investing in, or holding shares of common stock of, domestic affiliates that belong to the same large business group, unless all shares issued by the affiliates are held by the sub-subsidiary. Therefore, we and other subsidiaries of SK Inc. may not invest in any domestic affiliate that is also a member company of the SK Group, except in the case where we invest in our own subsidiary or where another subsidiary of SK Inc. invests in its own subsidiary.
---	---
•	Public notice of the current status of a business group. Under the Fair Trade Act and the Enforcement Decree thereof, a member company of the SK Group must publicly disclose the general status of the SK Group, including the name, business scope and financial status of affiliates, information on the officers of affiliates, information on shareholding and cross-investments between member companies of the SK Group, information on transactions with certain related persons and, if a member company engages in a transaction with an affiliated company in the amount of 5.0% or more of the member company’s quarterly sales or Won 5.0 billion or more, information on transactions with such affiliated company on a quarterly basis.
---	---

Rate Regulation

Network service providers whose sales proceeds exceed the amount prescribed by law must report to the MSIT the rates and contractual terms for each type of service they provide. Under the current reporting requirement, which does not apply to other network service providers with respect to the rates they provide, the MSIT has fifteen days to object to any new rates and terms of service reported by us, and we may implement such new rates and terms of service after the fifteen-day period expires in the absence of the MSIT’s objection.

Furthermore, in 2007, the Government announced a “road map” highlighting revisions in regulations to promote deregulation of the telecommunications industry. In accordance with the road map and pursuant to the Combined Sales Regulation, promulgated in May 2007, telecommunications service providers in Korea are permitted to bundle their services, such as wireless data transmission service, wireless voice transmission service, broadband Internet access service, fixed-line telephone service and IPTV service, at a discounted rate; provided, however, that we and KT, as market-dominating business entities under the Telecommunications Business Act, allow other competitors to employ the services provided by us and KT, respectively, so that such competitors can provide similar discounted package services. In September 2007, the regulations and provisions under the Telecommunications Business Act were amended to permit licensed transmission service providers to offer local, domestic long-distance and international telephone services, as well as broadband Internet access and Internet phone services, without additional business licenses.

Moreover, an MVNO system under which the MSIT may designate and obligate certain wireless telecommunications services providers to allow an MVNO, at such MVNO’s request, to use their telecommunications network facilities at a rate mutually agreed upon that complies with the standards set by the MSIT became effective on March 14, 2017 under the amended Telecommunications Business Act. We were designated as the only wireless telecommunications services provider obligated to allow the other wireless telecommunications services provider to use our telecommunications network facilities. The expiration of such system was extended to September 22, 2022 pursuant to an amendment to the Telecommunications Business Act. While such regulatory requirement expired in September 2022, we have continued to comply with such requirement pending future regulatory development, and in December 2023, a bill indefinitely extending such requirement was passed by the National Assembly. Currently, 14 MVNOs provide wireless telecommunications services using the networks leased from us.

On October 1, 2014, the MDDIA, enacted for the purpose of establishing a transparent and fair mobile distribution practice, became effective. The MDDIA limits the amount of subsidies a wireless telecommunications service provider can provide to subscribers in order to prevent excessive competition among wireless telecommunications service providers. Pursuant to the MDDIA, wireless telecommunications service providers are prohibited from (i) unfairly providing discriminatory subsidies based on criteria such as type of subscription, subscription plan and characteristics of the subscriber and (ii) entering into a separate agreement with subscribers imposing obligations to use a specific subscription plan as a condition for providing subsidies. While the Government indicated in January 2024 that it will seek to abolish the MDDIA in order to encourage wireless service providers to offer more differentiated customer benefits to consumers, the timing of such abolishment, if at all, remains uncertain. In connection with such policy objectives, the Government amended the Enforcement Decree of the MDDIA in March 2024, pursuant to which wireless telecommunications service providers may provide more liberal subsidies to subscribers that are switching their wireless telecommunications providers based on certain criteria specified by the KCC, including the expected profits to the wireless telecommunications service providers and subscribers’ costs of switching wireless telecommunications service providers. See “Item 5.A. Operating Results — Overview — Rate Regulations.”

In addition, under the MDDIA, wireless telecommunications service providers are obliged to provide certain benefits, such as discounted rates, to subscribers who subscribe to their service without receiving subsidies. In June 2017, the State Affairs Planning Advisory Committee of Korea announced that it would encourage wireless telecommunications service providers, including us, to increase the applicable discount rate offered to subscribers from 20% to 25%, which we adopted in September 2017, and to offer additional discounts to low income customers, including those on government welfare programs and senior citizen recipients of the basic pension, which we implemented in December 2017 and July 2018, respectively. Although the Government has recently indicated that it will seek to abolish the MDDIA as described above, it has also suggested that such discounted rates may be retained through a related amendment to the Telecommunications Business Act. We cannot provide assurance that we will not provide other rate discounts or lower-priced subscription plans in the future to comply with the Government’s public policy guidelines or suggestions.

Interconnection

Dominant network service providers such as ourselves that own essential infrastructure facilities or possess a certain market share are required to provide interconnection of their telecommunications network facilities to other service providers upon request. The MSIT sets and announces the standards for determining the scope, procedures, compensation and other terms and conditions of such provision, interconnection or co-use. We have entered into interconnection agreements with KT, LG U+ and other network service providers permitting these entities to interconnect with our network. We expect that we will be required to enter into additional agreements with new operators as the MSIT grants permits to additional telecommunications service providers.

Frequency Allocation

The MSIT has the discretion to allocate and adjust the frequency bandwidths for each type of service and may auction off the rights to certain frequency bandwidths. Upon allocation of new frequency bandwidths or adjustment of frequency bandwidths, the MSIT is required to give a public notice. The MSIT also regulates the frequency to be used by each radio station, including the transmission frequency used by equipment in our base stations. All of our frequency allocations are for a definite term. We pay fees to the MSIT for our frequency usage that are determined based upon our number of subscribers, frequency usage by our networks and other factors. For 2023, 2022 and 2021, the fee amounted to Won 102.5 billion, Won 103.9 billion and Won 120.8 billion, respectively.

We currently use 10 MHz of bandwidth in the 2.1 GHz spectrum for our WCDMA services, 30 MHz of bandwidth in the 2.1 GHz spectrum, 20 MHz of bandwidth in the 800 MHz spectrum, 35 MHz of bandwidth in the 1.8 GHz spectrum and 60 MHz of bandwidth in the 2.6 GHz spectrum for our LTE services, as well as 100 MHz of bandwidth in the 3.5 GHz spectrum for our 5G services. In December 2022, citing the lack of progress made to date with respect to the implementation of 5G infrastructure for our use of the 28 GHz spectrum (800 MHz of bandwidth which was allocated to us in December 2018 for a period of five years until November 2023), the MSIT reduced the duration of our license for the use of such bandwidth by six months and asked us to install 15,000 base stations that use the 28 GHz spectrum by the end of May 2023, which we were not able to do within the Government’s requested timetable. Furthermore, in December 2022, the Government cancelled the allocations of bandwidth in the 28 GHz spectrum that had been provided to KT and LG U+, also citing the lack of progress made by these companies. In January 2024, the Government allocated 800 MHz of bandwidth in the 28 GHz spectrum to Stage X to provide nationwide wireless network services. Stage X is required, among other things, to install 6,000 base stations across Korea that use the 28 GHz spectrum by 2027. For more information regarding the license fees for the various bandwidths that we use, see “Item 5.B. Liquidity and Capital Resources — Capital Requirements — Capital Expenditures” and note 17 of the notes to our consolidated financial statements.

For risks relating to the maintenance of adequate bandwidth capacity, see “Item 3.D. Risk Factors — Risks Relating to Our Business — Our business, financial condition and results of operations may be adversely affected if we fail to acquire adequate additional frequency usage rights or use our bandwidth efficiently to accommodate subscriber growth and subscriber usage.”

Mandatory Contributions and Obligations

All telecommunications service providers other than (i) value-added service providers and regional paging service providers or (ii) any telecommunications service providers whose net annual revenue is less than an amount determined by the MSIT (currently set at Won 30.0 billion) are required to provide “universal”

telecommunications services including local telephone services, local public telephone services, telecommunications services for remote islands and wireless communication services for ships and telephone services for handicapped and low-income citizens, or contribute toward the supply of such universal services. The MSIT designates universal services and the service provider who is required to provide each service. Currently, under the MSIT guidelines, we are required to offer a discount of between 30.0% to 50.0% of our monthly fee for wireless telecommunications services to handicapped and low-income citizens.

In addition to such universal services for handicapped and low-income citizens, we are also required to make certain annual monetary contributions to compensate for other service providers’ costs for the universal services. The size of a service provider’s contribution is based on its net annual revenue for the previous year (calculated pursuant to the MSIT guidelines, which differ from our accounting practices). We recognized expenses relating to such contributions of Won 31.1 billion, Won 22.1 billion and Won 18.7 billion in 2023, 2022 and 2021, respectively. As a wireless telecommunications services provider, we are not considered a provider of universal telecommunications services and do not receive funds for providing universal service. Other network service providers that do provide universal services make all or a portion of their “contribution” in the form of expenses related to the universal services they provide.

Foreign Ownership and Investment Restrictions and Requirements

Because we are a network service provider, and the exception for the foreign shareholding limit under the Telecommunications Business Act does not apply to us, foreign governments, individuals, and entities (including Korean entities that are deemed foreigners, as discussed below) are prohibited from owning more than 49.0% of our voting stock. Korean entities whose largest shareholder is a foreign government or a foreigner (together with any of its related parties) that owns 15.0% or more of the outstanding voting stock of such Korean entities are also deemed foreigners. If this 49.0% ownership limitation is violated, certain of our foreign shareholders will not be permitted to exercise voting rights in excess of the limitation, and the MSIT may require other corrective action.

Notwithstanding the above, pursuant to an amendment to the Telecommunications Business Act which became effective in April 2022, a Korean entity, so long as (i) such entity’s largest shareholder (determined by aggregating the shareholdings of such shareholder and its related parties) is a foreign entity specifically designated by the MSIT incorporated in a country that has entered into a bilateral or multilateral free trade agreement with Korea, and (ii) such shareholder (together with the shareholdings of its related parties) owns 15.0% or more of the issued voting stock of such entity, may own more than 49.0% of our issued shares but may not exercise its voting rights with respect to the shares held in excess of the 49.0% ceiling until the end of the MSIT’s Public Interest Review. Moreover, while there is currently a pending bill before the National Assembly which proposes to eliminate such limitation on the aggregate foreign ownership, it remains uncertain as to whether the National Assembly will vote in favor of passing such bill or when such vote will take place.

As of December 31, 2023, SK Inc. owned 65,668,397 shares of our common stock, or 30.0%, of our issued shares. As of December 31, 2023, the two largest foreign shareholders of SK Inc. each held a 3.3% stake therein. If such foreign shareholders increase their shareholdings in SK Inc. to 15% or more and any such foreign shareholder constitutes the largest shareholder of SK Inc., SK Inc. will be considered a foreign shareholder, and its shareholding in us would be included in the calculation of our aggregate foreign shareholding. If SK Inc.’s shareholding in us is included in the calculation of our aggregate foreign shareholding, then our aggregate foreign shareholding, assuming the foreign ownership level as of December 31, 2023 (which we believe was 41.0%), would exceed the 49.0% ceiling on foreign shareholding.

may result in a change in control of us. In addition, the MSIT will be prohibited from granting us licenses or permits necessary for entering into new telecommunications businesses until our aggregate foreign shareholding is reduced to below 49.0%. If a corrective order is issued to us by the MSIT arising from the violation of the foregoing foreign ownership limit, and we do not comply within the prescribed period under such corrective order, the MSIT may:

•	revoke our business license;
•	suspend all or part of our business; or
---	---
•	if the suspension of business is deemed to result in significant inconvenience to our customers or to be detrimental to the public interest, impose a one-time administrative penalty of up to 3.0% of the average of our annual revenue for the preceding three fiscal years.
---	---

Additionally, the Telecommunications Business Act also authorizes the MSIT to assess monetary penalties of up to 0.3% of the purchase price of the shares for each day the corrective order is not complied with, as well as a prison term of up to three years or a penalty of Won 150 million. See “Item 3.D. Risk Factors — Risks Relating to Our Business — If SK Inc. causes us to breach the foreign ownership limitations on our common shares, we may experience a change of control.”

We are required under the Foreign Exchange Transaction Act to file a report with a designated foreign exchange bank or with the MOEF, in connection with any issue of foreign currency denominated securities by us in foreign countries. Issuances of US$30 million or less require the filing of a report with a designated foreign exchange bank, and issuances that are over US$30 million in the aggregate within one year from the filing of a report with a designated foreign exchange bank require the filing of a report with the MOEF.

The Telecommunications Business Act provides for the creation of a Public Interest Review Committee under the MSIT to review investments in or changes in the control of network service providers. The following events would be subject to review by the Public Interest Review Committee:

•	the acquisition by an entity (and its related parties) of 15.0% or more of the equity of a network service provider;
•	a change in the largest shareholder of a network service provider;
---	---
•	agreements by a network service provider or its shareholders with foreign governments or parties regarding important business matters of such network service provider, such as the appointment of officers and directors and transfer of businesses;
---	---
•	a deemed foreigner (as discussed above) from a country whose government has entered into a bilateral or multilateral free trade agreement designated by the MSIT with the Government owning in excess of 49.0% of the outstanding voting stock of a network service provider; and
---	---
•	a change in control over a network service provider specified in the Enforcement Decree of the Telecommunications Business Act (including, but not limited to, the change of control over the holding company of such network service provider).
---	---

If the Public Interest Review Committee determines that any of the foregoing transactions or events would be detrimental to the public interest, then the MSIT may issue orders to stop the transaction, amend any agreements, suspend voting rights, or divest the shares of the relevant network service provider. Additionally, if a dominant network service provider (which would currently include us and KT), together with its specially related persons (as defined under the FSCMA), holds more than 5.0% of the equity of another dominant network service provider, the voting rights on the shares held in excess of the 5.0% limit may not be exercised.

Patents and Licensed Technology

Access to the latest relevant technology is critical to our ability to offer the most advanced wireless telecommunications services and to design and manufacture competitive products. In addition to active internal

and external research and development efforts as described in “Item 5.C. Research and Development, Patents and Licenses, etc.,” our success depends in part on our ability to obtain patents, licenses and other intellectual property rights covering our products. We own numerous patents and trademarks worldwide, and have applications for patents pending in many countries. Our patents are mainly related to wireless (LTE, 5G and Wi-Fi) technology, video codec, wireless Internet applications, augmented reality, virtual reality and AI.

We are not currently involved in any material litigation regarding patent infringement. For a description of the risks associated with our reliance on intellectual property, see “Item 3.D. Risk Factors — Risks Relating to Our Business — Our business relies on technology developed by us, and our business will suffer if we are unable to protect our proprietary rights.”

Seasonality of the Business

Our business is not affected by seasonality.

Item 4.C.	Organizational Structure

Organizational Structure

We are a member of the SK Group, based on the definition of “group” under the Fair Trade Act. As of December 31, 2023, SK Group members owned in aggregate 30.0% of the shares of our issued common stock. The SK Group is a diversified group of companies incorporated in Korea with interests in, among other things, telecommunications, trading, energy, chemicals, engineering and leisure industries.

Significant Subsidiaries

For information regarding our subsidiaries, see note 1(2) of the notes to our consolidated financial statements.

Item 4.D.	Property, Plants and Equipment

The following table sets forth certain information concerning our principal properties as of December 31, 2023:

Location	Primary Use	Approximate Area<br>in Square Feet
Seoul Metropolitan Area	Corporate Headquarters	921,727^(1)^
	Regional Headquarters	608,670
	Customer Service Centers	107,277
	Training Centers	279,372
	Central Research and Development Center	319,789
	Others^(2)^	2,283,572
Gyeongsang Provinces	Regional Headquarters	384,399
	Others^(2)^	1,155,739
Jeolla and Jeju Provinces	Regional Headquarters	265,614
	Others^(2)^	857,436
Chungcheong Province	Regional Headquarters	566,386
	Others^(2)^	695,960
(1)	Represents our 93.25% ownership of SK T-Tower.
---	---
(2)	Includes base stations.
---	---

Our registered office and corporate headquarters are located at SK T-Tower, 65, Eulji-ro, Jung-gu, Seoul 04539, Korea, which occupy a total land area of approximately 64,515 square feet. We own 93.25% of SK T-Tower, while the remaining 6.75% is owned by SK Square following the transfer of such interest to it by us pursuant to the Spin-off. In addition, we own or lease various locations for base stations and switching equipment. We do not anticipate that we will encounter material difficulties in meeting our future needs for any existing or prospective leased space for our base stations. See “Item 4.B. Business Overview — Cellular Services — Network Infrastructure.”

We maintain a range of insurance policies to cover our assets and employees, including our directors and officers. We are insured against business interruption, fire, lightning, flooding, theft, vandalism, public liability and certain other risks that may affect our assets and employees. We believe that the types and amounts of our insurance coverage are in accordance with general business practices in Korea.

Item 4A.	UNRESOLVED STAFF COMMENTS

We do not have any unresolved comments from the SEC staff regarding our periodic reports under the Exchange Act.

Item 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS

You should read the following discussion together with our consolidated financial statements and the related notes thereto which appear elsewhere in this annual report. We prepare our consolidated financial statements in accordance with IFRS as issued by the IASB. In addition, you should read carefully notes 2(4) and 3 of the notes to our consolidated financial statements which provide summaries of certain critical accounting estimates that require our management to make difficult, complex or subjective judgments relating to matters which are highly uncertain and that may have a material impact on our financial conditions and results of operations.

Item 5.A.	Operating Results

Unless otherwise indicated, the amounts set forth below in this Item 5.A. exclude the results of operations of our former businesses comprising the Spin-off Businesses, which are classified as discontinued operations. See “Item 4.A. History and Development of the Company” and “— Overview.”

Overview

Our operations are reported in three segments: (1) cellular services, which include wireless voice and data transmission services, sales of wireless devices, IoT solutions and platform services as well as certain other new growth businesses and other miscellaneous cellular services, (2) fixed-line telecommunication services, which include fixed-line telephone services, broadband Internet services, advanced media platform services (including IPTV and cable TV services) and business communications services, and (3) other businesses, which include our T-commerce, portal service, and certain other miscellaneous businesses that do not meet the quantitative thresholds to be separately considered reportable segments.

In our cellular services segment, we earn revenue principally from our wireless voice and data transmission services through monthly plan-based fees, usage charges for outgoing voice calls, usage charges for wireless data services and value-added service fees paid by our wireless subscribers as well as interconnection fees paid to us by other telecommunications operators for use of our wireless network by their customers and subscribers. We also derive revenue from sales of wireless devices by PS&Marketing. Other sources of revenue include revenue from our IoT solutions and platform services, including AI solutions, as well as other miscellaneous cellular services and our new services and products utilizing our AI and digital infrastructure capabilities and our telecommunications platforms, including a broad range of IoT solutions, platform services, cloud services, smart factory solutions, subscription services, advertising and curated shopping services, metaverse platform-based services, AI solutions and enterprise AI services.

In our fixed-line telecommunication services segment, we earn revenue principally from our fixed-line telephone services and broadband Internet services and advanced media platform services (including IPTV and cable TV services) through monthly plan-based fees and usage charges as well as interconnection fees paid to us by other telecommunications operators for use of our fixed-line network by their customers and subscribers, and advertising fees paid to us by businesses that advertise their products and services on our advanced media platforms. In addition, we derive revenue from international calling services and our business communications services through customized fee arrangements with our business customers.

In our others segment, we principally earn revenue from the T-commerce business of SK Stoa, which derives revenue through third-party seller fees earned (including commissions) for transactions in which it acts as a selling agent on SK stoa, its T-commerce network, our “Nate” portal service operated by SK Communications and online corporate employee benefit management and training services provided by SK M&Service, which we acquired in February 2022.

Pursuant to the Spin-off, our former businesses comprising the Spin-off Businesses were transferred to SK Square, and such businesses have been accounted for as discontinued operations in our consolidated financial statements for the year ended December 31, 2021 included in this annual report. See “Certain Defined Terms and Conventions Used in this Annual Report.”

Our cellular service revenue and fixed-line telecommunications service revenue depend principally upon the number of our subscribers, the rates we charge for our services, the frequency and volume of subscriber usage of our services and the terms of our interconnection with other telecommunications operators. Our others revenue depends principally upon the gross merchandise volume, which is the total monetary value of customer purchases of goods and services, net of estimated refunds, of SK stoa and the number of merchants that utilize SK stoa and the Nate Portal to advertise and promote their products and services and the extent of such advertisement and promotion.

Among other factors, management uses operating profit of each reportable segment presented in accordance with K-IFRS (“segment operating profit”) in its assessment of the profitability of each reportable segment. The sum of segment operating profit for all three reportable segments differs from our operating profit presented in accordance with IFRS as issued by the IASB as segment operating profit does not include certain items such as donations, gain and loss from disposal of property and equipment and intangible assets and impairment loss on property and equipment and intangible assets. For a reconciliation of operating profit presented in accordance with IFRS as issued by the IASB and operating profit presented in accordance with K-IFRS, see “— Explanatory Note Regarding Presentation of Certain Financial Information under K-IFRS.” In addition to the information set forth below, see note 4 of the notes to our consolidated financial statements for more detailed information regarding each of our reportable segments.

A number of recent developments have had or are expected to have a material impact on our results of operations, financial condition and capital expenditures. These developments include:

Rate Regulations. Under the MDDIA, wireless telecommunications service providers are obliged to provide certain benefits, such as discounted rates, to subscribers who subscribe to their service without receiving handset subsidies. Handset subsidies are provided to subscribers who agree to use our service for a predetermined service period and purchase handsets on an installment basis. In June 2017, the State Affairs Planning Advisory Committee of Korea announced that it would encourage wireless telecommunications service providers, including us, to increase the applicable discount rate offered to subscribers from 20% to 25%, which we adopted in September 2017, and to offer additional discounts to low income customers, including those on government welfare programs and senior citizen recipients of the basic pension, which we implemented in December 2017 and July 2018, respectively. While the Government indicated in January 2024 that it will seek to abolish the MDDIA in order to encourage wireless service providers to offer more differentiated customer benefits to consumers, it has also suggested that such discounted rates may be retained through a related amendment to the

Telecommunications Business Act. In connection with such policy objectives, the Government amended the Enforcement Decree of the MDDIA in March 2024, pursuant to which wireless telecommunications service providers may provide more liberal subsidies to subscribers that are switching their wireless telecommunications providers based on certain criteria specified by the KCC, including the expected profits to the wireless telecommunications service providers and subscribers’ costs of switching wireless telecommunications service providers.

These Government measures have adversely affected our revenues and results of operations as more subscribers elected to receive the 25% rate discount in recent years. On the other hand, this has also led to a reduction of, or partially offset increases in, our marketing expenses as the number of subscribers who have elected to receive handset subsidies has generally declined in recent years, and has contributed to maintaining a stable churn rate. Moreover, in light of the recent amendment to the Enforcement Decree of the MDDIA and the Government’s intent to ultimately abolish the MDDIA as discussed above, we may be required to increase our marketing expenses relating to handset subsidies in part depending on the prevailing competitive landscape, which may have an adverse effect on our operating expenses and results of operations.

Failure to comply with the MDDIA may lead to suspension of our business or imposition of monetary penalties. For more information about the MDDIA and the penalties imposed for violating Government regulations, see “Item 4.B. Business Overview — Law and Regulation — Rate Regulation.”

Decrease in Interconnection Fees. Our wireless telecommunications services depend, in part, on our interconnection arrangements with domestic and international fixed-line and other wireless networks. Charges for interconnection affect our revenues and operating results. The MSIT determines the basic framework for interconnection arrangements, including policies relating to interconnection rates in Korea. Under our interconnection agreements, we are required to make payments in respect of calls which originate from our networks and terminate in the networks of other Korean telecommunications operators, and the other operators are required to make payments to us in respect of calls which originate in their networks and terminate in our network. The MSIT has continued to gradually decrease the interconnection rates in Korea, which has led to an overall decrease in our interconnection revenue as well as interconnection expenses from 2012 to 2023 and any further reduction in interconnection rates by the MSIT may continue to impact our results of operations. Beginning in 2017, a single interconnection rate paid by fixed-line network service providers for fixed-line to wireless calls applies to all wireless telecommunications service providers. For more information about our interconnection revenue and expenses, see “Item 4.B. Business Overview — Interconnection.”

Changes in Monthly Revenue per Subscriber. We measure monthly average revenue per subscriber using two metrics: average monthly revenue per subscriber excluding MVNO subscribers leasing our networks (“ARPU”) and average monthly revenue per subscriber including such MVNO subscribers (“ARPU including MVNO”). ARPU is derived by dividing the sum of total SK Telecom revenues on a separate basis from voice service and data service for the period (excluding revenue derived from MVNO subscribers leasing our networks) by the monthly average number of subscribers (excluding the number of MVNO subscribers) for the period, then dividing that number by the number of months in the period. ARPU including MVNO is derived by dividing the sum of total SK Telecom revenues on a separate basis from voice service and data service for the period (including revenue derived from MVNO subscribers) by the monthly average number of subscribers (including the number of MVNO subscribers) for the period, then dividing that number by the number of months in the period.

Our ARPU decreased by 2.2% to Won 29,874 in 2023 from Won 30,546 in 2022, which represented an increase of 0.1% from Won 30,517 in 2021. Our ARPU including MVNO decreased by 2.4% to Won 27,885 in 2023 from Won 28,582 in 2022, which represented an increase of 0.3% from Won 28,485 in 2021. The decrease in ARPU in 2023 was primarily due to an increase in subscriptions for IoT and other non-mobile phone devices, from which we derive lower revenue per subscriber, which effect was offset in part by an increase in the number of subscribers that subscribe to our 5G subscription plans, which are relatively higher-priced compared to other

types of wireless subscription plans. The decrease in ARPU including MVNO in 2023 was primarily due to an increase in the number of MVNO subscribers from whom we derive lower ARPU. The increases in our ARPU and our ARPU including MVNO in 2022 were primarily due to an increase in the number of subscribers who subscribe to our 5G subscription plans.

Effects of COVID-19 and Economic Conditions in Korea. Demand for our products and services may fluctuate in light of the overall economic conditions in Korea. The overall prospects for the Korean economy and, in turn, the market conditions for the industries in which we operate, remain uncertain, and have been affected by, among others, the COVID-19 pandemic, Russia’s invasion of Ukraine and ensuing sanctions against Russia, difficulties faced by several banks in the United States and Europe, rapid increases in policy interest rates globally (including Korea) to combat rising inflationary pressures, and more recently, escalating hostilities in the Middle East following the Israel-Hamas war, which have adversely affected, and may continue to adversely affect, the Korean economy. For example, the travel restrictions imposed by governments in response to the COVID-19 pandemic resulted in a significant decrease in revenue from roaming services in 2021 before it increased significantly in 2022 and 2023 in light of the substantial lifting of such travel restrictions in most countries, and the pandemic contributed to lower customer demand for new wireless devices, resulting in a decrease in our wireless device sales revenue in 2021 before it slightly increased in 2022 and continued to increase in 2023 as the negative effects of the COVID-19 pandemic have largely tapered. In addition, an increase in unemployment among, and/or a decrease in disposable income of, our customers resulting from mixed signs of deterioration and uncertain recovery displayed by the Korean economy as described above, may decrease demand for some of our products and services or cause an increase in delinquent subscriber accounts. A future recurrence of COVID-19, other types of widespread infectious diseases or other developments adversely affecting the Korean economy may have a material adverse effect on our business, financial condition and results of operations. See “Item 3.D. Risk Factors — Risks Relating to Our Business — Occurrences of widespread infectious diseases, including any possible recurrence of COVID-19, may adversely affect our business, financial condition and results of operations” and Item 3.D. Risk Factors — Risks Relating to Korea — Unfavorable financial and economic developments in Korea may have an adverse effect on us.”

Explanatory Note Regarding Presentation of Certain Financial Information under K-IFRS

In addition to preparing consolidated financial statements in accordance with IFRS as issued by the IASB included in this annual report, we also prepare financial statements in accordance with K-IFRS as adopted by the KASB, which we are required to file with the FSC and the Korea Exchange under the FSCMA.

K-IFRS requires operating profit, which is calculated as operating revenue less operating expenses, to be separately presented on the consolidated statement of income. The presentation of operating profit in our consolidated statements of income prepared in accordance with IFRS as issued by the IASB included in this annual report differs from the presentation of operating profit in the consolidated statements of income prepared in accordance with K-IFRS for the corresponding periods in certain respects. The table below sets forth a reconciliation of our operating profit as presented in our consolidated statements of income prepared in accordance with IFRS as issued by the IASB for each of the three years ended December 31, 2023 to the operating profit as presented in the consolidated statements of income prepared in accordance with K-IFRS.

	For the Year Ended December 31,
	2023			2022			2021
	(In billions of Won)
Operating profit pursuant to IFRS as issued by the IASB	W	1,756.3		W	1,594.3		W	1,432.4
Differences:
Other income pursuant to IFRS that are classified as other non-operating income pursuant to K-IFRS:
Gain on disposal of property and equipment and intangible assets		(21.9	)		(16.0	)		(39.1	)
Others		(28.5	)		(40.3	)		(76.6	)
		(50.4	)		(56.3	)		(115.8	)
Other operating expenses pursuant to IFRS that are classified as other non-operating expenses pursuant to K-IFRS:
Impairment loss on property and equipment and intangible assets		10.4			17.0			3.1
Loss on disposal of property and equipment and intangible assets		9.4			20.5			28.2
Donations		14.8			13.1			12.8
Bad debt for accounts receivable – other		5.3			3.0			4.0
Others		7.5			20.4			22.5
		47.3			74.0			70.6
Operating profit pursuant to K-IFRS	W	1,753.2		W	1,612.1		W	1,387.2

See note 4(2) of the notes to our consolidated financial statements. However, there is no impact on profit for the year or earnings per share for each of the three years ended December 31, 2023, 2022 and 2021.

Operating Results

The following table sets forth summary consolidated income statement information, including that expressed as a percentage of operating revenue and other income, for the periods indicated:

	For the year ended December 31,
	2023				2022				2021
	(In billions of Won, except percentages)
From continuing operations:
Operating revenue and other income	W	17,658.9	100.0	%	W	17,361.2	100.0	%	W	16,864.3	100.0	%
Revenue		17,608.5	99.7			17,305.0	99.7			16,748.6	99.3
Other income		50.4	0.3			56.3	0.3			115.8	0.7
Operating expenses		15,902.6	90.1			15,766.9	90.8			15,432.0	91.5
Operating profit		1,756.3	9.9			1,594.3	9.2			1,432.4	8.5
Profit before income tax		1,488.2	8.4			1,236.2	7.1			1,718.2	10.2
Income tax expense		342.2	1.9			288.3	1.7			446.8	2.6
Profit from continuing operations		1,145.9	6.5			947.8	5.5			1,271.4	7.5
Profit from discontinued operations^(1)^		—	—			—	—			1,147.6	6.8
Profit for the year		1,145.9	6.5			947.8	5.5			2,419.0	14.3
Attributable to:
Owners of the Parent Company		1,093.6	6.2			912.4	5.3			2,407.5	14.3
Non-controlling interests		52.3	0.3			35.4	0.2			11.5	0.1
(1)	Pursuant to the Spin-off, the Spin-off Businesses were transferred to SK Square, and such businesses have been accounted for as discontinued operations in our consolidated statements of income for the years ended December 31, 2023, 2022 and 2021 included in this annual report. See “Certain Defined Terms and Conventions Used in this Annual Report.”
---	---

The following table sets forth additional information about our operations with respect to our reportable segments during the periods indicated:

	For the year ended December 31,
	2023						2022						2021
	Amount			Percentage of<br>Total<br>Revenue			Amount			Percentage of<br>Total<br>Revenue			Amount		Percentage of<br>Total<br>Revenue
	(In billions of Won, except percentages)
Cellular Services Revenue
Wireless Service^(1)^	W	10,329.0			58.7	%	W	10,253.2			59.2	%	W	10,100.4		60.3	%
Cellular Interconnection		432.7			2.5			471.2			2.7			493.8		2.9
Wireless Device Sales		993.9			5.6			969.0			5.6			959.9		5.7
Miscellaneous^(2)^		1,367.6			7.8			1,248.9			7.2			1,164.4		7.0
Total Cellular Services Revenue		13,123.2			74.5			12,942.3			74.8			12,718.5		75.9
Fixed-line Telecommunication Services Revenue
Fixed-line Telephone Service		147.7			0.8			156.7			0.9			217.0		1.3
Fixed-line Interconnection		15.8			0.1			21.2			0.1			69.8		0.4
Broadband Internet Service and Advanced Media Platform Service^(3)^		2,494.0			14.2			2,452.5			14.2			2,443.9		14.6
International Calling Service		190.9			1.1			180.7			1.0			162.4		1.0
Miscellaneous^(4)^		1,079.6			6.1			1,001.9			5.8			784.6		4.7
Total Fixed-line Telecommunication Services Revenue		3,928.0			22.3			3,813.0			22.0			3,677.7		22.0
Others Revenue
T-commerce^(5)^		301.3			1.7			329.2			1.9			316.2		1.9
Portal Service^(6)^		23.2			0.1			24.7			0.1			27.0		0.2
Miscellaneous^(7)^		232.8			1.3			195.7			1.1			9.2		0.1
Total Other Revenue		557.3			3.2			549.7			3.2			352.4		2.1
Total Revenue		17,608.5			100.0			17,305.0			100.0			16,748.6		100.0
Segment Operating Expenses^(8)^
Cellular Services		11,673.1			66.3			11,646.2			67.3			11,643.4		69.5
Fixed-line Telecommunication Services		3,582.1			20.3			3,494.2			20.2			3,380.2		20.2
Others		600.1			3.4			552.5			3.2			337.8		2.0
Total Segment Operating Expenses		15,855.3			90.0			15,692.9			90.7			15,361.4		91.7
Segment Operating Profit (Loss) ^(9)^
Cellular Services		1,450.1			8.2			1,296.1			7.5			1,075.1		6.4
Fixed-line Telecommunication Services		345.9			2.0			318.8			1.8			297.5		1.8
Others		(42.8	)		(0.2	)		(2.8	)		(0.0	)		14.6		0.1
Total Segment Operating Profit	W	1,753.2			10.0	%	W	1,612.1			9.3	%	W	1,387.2		8.3	%

(1)	Wireless service revenue includes revenue from wireless voice and data transmission services principally derived through monthly plan-based fees, usage charges for outgoing voice calls, usage charges for wireless data services and value-added service fees such as fees for our cloud services and T Universe subscription program paid by wireless subscribers.
(2)	Miscellaneous cellular services revenue includes revenue from our IoT and other solutions as well as other miscellaneous cellular services.
---	---
(3)	Broadband internet service and advanced media platform service revenue includes revenues from our broadband Internet services as well as IPTV and cable TV services.
---	---
(4)	Miscellaneous fixed-line telecommunication services revenue includes revenues from business communications services (other than fixed-line telephone service) provided by SK Broadband.
---	---
(5)	T-commerce services revenue includes revenues from SK Stoa.
---	---
(6)	Portal service revenue includes revenues from Nate, our online portal service operated by SK Communications.
---	---
(7)	Miscellaneous revenue includes revenues from SK M&Service and other minor miscellaneous revenue items.
---	---
(8)	“Segment operating expenses” mean operating expenses for each reportable segment presented in accordance with K-IFRS and therefore does not include certain expenses that are classified as other non-operating expenses under K-IFRS. For more information on the differences between our consolidated operating expenses pursuant to K-IFRS and pursuant to IFRS as issued by the IASB, see “— Explanatory Note Regarding Presentation of Certain Financial Information under K-IFRS.”
---	---
(9)	Segment operating profit (loss) for each of the segments above is presented net of consolidation adjustments. Accordingly, they do not reconcile with the segment operating profit (loss) for each of such segments set forth in note 4(1) of the notes to our consolidated financial statements, which is expressed prior to making such consolidation adjustments.
---	---

2023 Compared to 2022

Operating Revenue and Other Income. Our consolidated operating revenue and other income increased by 1.7% to Won 17,658.9 billion in 2023 from Won 17,361.2 billion in 2022 due to an increase in operating revenue, as discussed below.

Our consolidated operating revenue increased by 1.8% to Won 17,608.5 billion in 2023 from Won 17,305.0 billion in 2022, due to increases in cellular services revenue, fixed-line telecommunications services revenue and, to a much lesser extent, others revenue.

Our consolidated other income decreased by 10.5% to Won 50.4 billion in 2023 from Won 56.3 billion in 2022, primarily as a result of the previously estimated amounts of certain regulatory fees recognized in 2022 being greater than the actual amounts.

The following sets forth additional information about our operating revenues with respect to each of our reportable segments.

•

Cellular services: The revenue of our cellular services segment, which is composed of revenues from wireless service, cellular interconnection, wireless device sales and miscellaneous cellular services, increased by 1.4% to Won 13,123.2 billion in 2023 from Won 12,942.3 billion in 2022. The increase in our cellular services revenue was due to increases in miscellaneous cellular services revenue, wireless service revenue and wireless device sales revenue, partially offset by a decrease in cellular interconnection revenue.

Miscellaneous cellular services revenue increased by 9.5% to Won 1,367.6 billion in 2023 from Won 1,248.9 billion in 2022, primarily due to increases in revenue from our cloud services, IoT solutions and other new businesses, as we continued to build up the scale of such businesses to complement our core wireless service business.

---

-	Wireless service revenue increased by 0.7% to Won 10,329.0 billion in 2023 from Won 10,253.2 billion in 2022, primarily attributable to the continued increase in the number of subscribers who subscribe to our 5G subscription plans and an increase in the usage of our roaming services in light of a further increase in international travel by our subscribers as the negative effects of the COVID-19 pandemic continued to taper.
-	Wireless device sales revenue increased by 2.6% to Won 993.9 billion in 2023 from Won 969.0 billion in 2022, primarily due to an increase in the average prices of the handsets we sold during the year, which primarily reflected the higher prices charged by device manufacturers in part due to higher manufacturing costs, partially offset by a decrease in the sales of handsets due to demand for new flagship devices of the leading device manufacturers falling short of expectations in 2023.
---	---
-	Cellular interconnection revenue decreased by 8.2% to Won 432.7 billion in 2023 from Won 471.2 billion in 2022, primarily attributable to a decrease in interconnection rates.
---	---
•	Fixed-line telecommunications services: The revenue of our fixed-line telecommunication services segment, which is composed of revenues from broadband Internet service and advanced media platform service (including IPTV and cable TV services), fixed-line telephone service, international calling service, fixed-line interconnection and miscellaneous fixed-line telecommunication services, increased by 3.0% to Won 3,928.0 billion in 2023 from Won 3,813.0 billion in 2022, primarily due to increases in miscellaneous fixed-line telecommunication services revenue, broadband Internet service and advanced media platform service revenue and international calling service revenue, slightly offset by decreases in fixed-line telephone service revenue and fixed-line interconnection revenue.
---	---
-	Miscellaneous fixed-line telecommunication services revenue increased by 7.8% to Won 1,079.6 billion in 2023 from Won 1,001.9 billion in 2022, primarily due to an increase in revenue from our business communications services, including our data center services.
---	---
-	Revenue from our broadband Internet service and advanced media platform service (including our IPTV and cable TV services) increased by 1.7% to Won 2,494.0 billion in 2023 from Won 2,452.5 billion in 2022, primarily due to increases in the number of IPTV subscribers to 6.7 million subscribers as of December 31, 2023 from 6.5 million subscribers as of December 31, 2022 and the number of subscribers who subscribe to our higher-priced subscription plans.
---	---
-	International calling service revenue increased by 5.6% to Won 190.9 billion in 2023 from Won 180.7 billion in 2022, primarily due to an increase in international calling volume.
---	---
-	Fixed-line telephone service revenue decreased by 5.7% to Won 147.7 billion in 2023 from Won 156.7 billion in 2022, primarily due to decreases in residential calling volume as a result of a continued shift in consumer preference toward wireless communication and the number of fixed-line telephone subscribers to 3.46 million as of December 31, 2023 from 3.56 million as of December 31, 2022.
---	---
-	Fixed-line interconnection revenue decreased by 25.5% to Won 15.8 billion in 2023 from Won 21.2 billion in 2022, primarily due to a continued decrease in interconnection rates, as well as decreases in residential calling volume and the number of fixed-line telephone subscribers as described above.
---	---
•	Others: The revenue of our others segment slightly increased by 1.4% to Won 557.3 billion in 2023 from Won 549.7 billion in 2022, primarily due to a 19.0% increase in our miscellaneous others revenue, which mainly reflected the effect of our recognition of revenue attributable to SK M&Service, which we acquired in February 2022, for the whole year, partially offset by an 8.4% decrease in the revenue of SK Stoa’s T-commerce business to Won 301.5 billion in 2023 from Won 329.3 billion in 2022, which mainly reflected a decrease in the volume of merchandise sold in light of the general downturn in the T-commerce services industry.
---	---

Operating Expenses. Our consolidated operating expenses increased by 0.9% to Won 15,902.6 billion in 2023 from Won 15,766.9 billion in 2022, primarily due to an 8.0% increase in other operating expenses to Won 1,651.3 billion in 2023 from Won 1,529.0 billion in 2022, a 1.6% increase in labor costs to Won 2,488.2 billion in 2023 from Won 2,449.8 billion in 2022 and a 0.6% increase in commissions to Won 5,549.9 billion in 2023 from Won 5,518.8 billion in 2022, partially offset by a 5.1% decrease in network interconnection expenses to Won 678.5 billion in 2023 from Won 715.3 billion in 2022.

The increase in other operating expenses was primarily due to an increase in utilities, mainly reflecting increases in the number of base stations and electricity prices.

The increase in labor costs was primarily due to increases in the number of personnel at our subsidiaries Home & Service Co., Ltd. and SK O&S Co., Ltd.

The increase in commissions was primarily due to an increase in the sales of IPTV service subscriptions through our authorized dealers and independent retailers.

The decrease in network interconnection expenses was primarily due to decreases in wireless-to-fixed-line and fixed-line-to-wireless interconnection rates, as well as a decrease in calling volume.

The following sets forth additional information about our segment operating expenses with respect to each of our reportable segments, which do not include certain expenses that are classified as other non-operating expenses under K-IFRS. For more information on the difference between our consolidated operating expenses pursuant to K-IFRS and pursuant to IFRS as issued by the IASB, see “— Explanatory Note Regarding Presentation of Certain Financial Information under K-IFRS” and note 4(2) of the notes to our consolidated financial statements.

•	Cellular services: The segment operating expenses for our cellular services segment slightly increased by 0.2% to Won 11,673.1 billion in 2023 from Won 11,646.2 billion in 2022, as the increase in utilities cost as described above was substantially offset by a decrease in labor costs relating to SK Telecom’s employees, which mainly reflected the effect of a one-time bonus payment relating to the Spin-off made in 2022.
•	Fixed-line telecommunication services: The segment operating expenses for our fixed-line telecommunication services segment increased by 2.5% to Won 3,582.1 billion in 2023 from Won 3,494.2 billion in 2022, primarily due to an increase in SK Broadband’s marketing expenses and commissions, primarily reflecting an increase in the sale of IPTV service subscriptions, as well as an increase in utilities cost.
---	---
•	Others: The segment operating expenses for our others segment increased by 8.6% to Won 600.1 billion in 2023 from Won 552.5 billion in 2022, primarily due to the effect of our recognition of operating expenses attributable to SK M&Service, which we acquired in February 2022, for the whole year.
---	---

Operating Profit. Our consolidated operating profit increased by 10.2% to Won 1,756.3 billion in 2023 from Won 1,594.3 billion in 2022, as the increase in operating revenue outpaced the increase in operating expenses in 2023.

The following sets forth additional information about our segment operating profit (loss) with respect to each of our reportable segments. Our segment operating profit (loss) with respect to each of our reportable segments is based on K-IFRS and the sum of segment operating profit for all three reportable segments differs from our consolidated operating profit presented in accordance with IFRS as issued by the IASB. For a reconciliation of operating profit presented in accordance with IFRS as issued by the IASB and operating profit

presented in accordance with K-IFRS, see “— Explanatory Note Regarding Presentation of Certain Financial Information under K-IFRS” and note 4(2) of the notes to our consolidated financial statements.

•	Cellular services: The segment operating profit of our cellular services segment increased by 11.9% to Won 1,450.1 billion in 2023 from Won 1,296.1 billion in 2022, due to the greater increase in segment operating revenue as compared to the increase in segment operating expenses, for the various reasons described above. The segment operating margin (which, with respect to each reportable segment, is segment operating profit (loss) divided by revenue from such segment, expressed as a percentage) of our cellular services segment increased to 11.0% in 2023 from 10.0% in 2022.
•	Fixed-line telecommunication services: The segment operating profit of our fixed-line telecommunication services segment increased by 8.5% to Won 345.9 billion in 2023 from Won 318.8 billion in 2022, due to the greater increase in segment operating revenue as compared to the increase in segment operating expenses, for the reasons described above. The segment operating margin of our fixed-line telecommunication services segment remained relatively constant at 8.8% in 2023 compared to 8.4% in 2022.
---	---
•	Others: The segment operating loss of our others segment significantly increased to Won 42.8 billion in 2023 from Won 2.8 billion in 2022, due to the greater increase in segment operating expenses as compared to the increase in segment operating revenue as described above. As a result, the segment operating margin of our others segment worsened to (7.7)% in 2023 from (0.5)% in 2022.
---	---

Finance Income and Finance Costs. Our finance income increased by 38.2% to Won 248.4 billion in 2023 from Won 179.8 billion in 2022, primarily due to a significant increase in dividends received to Won 43.0 billion in 2023 (mainly attributable to dividends we received from Hana Financial Group) from Won 2.6 billion in 2022, as well as a 21.8% increase in gain relating to financial instruments at fair value through profit or loss to Won 115.0 billion in 2023 from Won 94.4 billion in 2022, primarily relating to our equity investment in Joby Aviation Inc.

Our finance costs increased by 15.6% to Won 527.4 billion in 2023 from Won 456.3 billion in 2022, primarily due to an 18.7% increase in in interest expense to Won 389.8 billion in 2023 from Won 328.3 billion in 2022, which primarily reflected higher market interest rates.

Gains (Losses) Related to Investments in Associates and Joint Ventures. We recorded net gains related to investments in associates and joint ventures of Won 10.9 billion in 2023, primarily due to our share of profits from SK China Company Ltd. of Won 24.0 billion, compared to net losses related to investments in associates and joint ventures of Won 81.7 billion in 2022, primarily due to loss of Won 48.6 billion from disposal of our equity interest in HanaCard in 2022.

Income Tax. Income tax expense increased by 18.7% to Won 342.2 billion in 2023 from Won 288.3 billion in 2022 primarily due to a 20.4% increase in profit before income tax to Won 1,488.2 billion in 2023 from Won 1,236.2 billion in 2022. Our effective tax rate in 2023 decreased to 23.0% from 23.3% in 2022. Our effective tax rates in 2023 and 2022 were lower than the maximum statutory tax rate of 26.4% for 2023 and 27.5% for 2022, primarily due to, in the case of 2023, tax credits and tax reductions, and a decrease in the corporate income tax rate in Korea beginning in 2023, and in the case of 2022, a decrease in net deferred tax liability due to an expected decrease in the corporate income tax rate in Korea beginning in 2023, as well as changes in unrecognized deferred taxes and tax credits and tax reductions.

Profit for the Year. Principally as a result of the factors discussed above, our profit for the year increased by 20.9% to Won 1,145.9 billion in 2023 from Won 947.8 billion in 2022. Profit for the year as a percentage of operating revenue and other income was 6.5% in 2023 compared to 5.5% in 2022.

2022 Compared to 2021

Operating Revenue and Other Income. Our consolidated operating revenue and other income increased by 2.9% to Won 17,361.2 billion in 2022 from Won 16,864.3 billion in 2021 due to an increase in operating revenue, as discussed below.

Our consolidated operating revenue increased by 3.3% to Won 17,305.0 billion in 2022 from Won 16,748.6 billion in 2021, primarily due to increases in cellular services revenue, others revenue and fixed-line telecommunications services revenue.

Our consolidated other income decreased by 51.4% to Won 56.3 billion in 2022 from Won 115.8 billion in 2021, primarily due to the effect of the difference in the previously estimated and actual amounts of certain regulatory fees recognized in 2021.

The following sets forth additional information about our operating revenues with respect to each of our reportable segments.

•	Cellular services: The revenue of our cellular services segment increased by 1.8% to Won 12,942.3 billion in 2022 from Won 12,718.5 billion in 2021. The increase in our cellular services revenue was due to increases in wireless service revenue, miscellaneous cellular services revenue and wireless device sales revenue, partially offset by a decrease in cellular interconnection revenue.
-	Wireless service revenue increased by 1.5% to Won 10,253.2 billion in 2022 from Won 10,100.4 billion in 2021, primarily attributable to the continued increase in the number of subscribers who subscribe to our 5G subscription plans and an increase in the usage of our roaming services in light of the substantial lifting of travel restrictions imposed by governments in response to the COVID-19 pandemic.
---	---
-	Miscellaneous cellular services revenue increased by 7.3% to Won 1,248.9 billion in 2022 from Won 1,164.4 billion in 2021, primarily due to increases in revenue from our cloud services, IoT solutions and other new businesses.
---	---
-	Wireless device sales revenue slightly increased by 0.9% to Won 969.0 billion in 2022 from Won 959.9 billion in 2021, primarily due to an increase in the sale of 5G-compatible devices that generally command higher prices.
---	---
-	Cellular interconnection revenue decreased by 4.6% to Won 471.2 billion in 2022 from Won 493.8 billion in 2021. The decrease was primarily attributable to a decrease in interconnection rates, partially offset by an increase in the volume of mobile to mobile calls.
---	---
•	Fixed-line telecommunications services: The revenue of our fixed-line telecommunication services segment increased by 3.7% to Won 3,813.0 billion in 2022 from Won 3,677.7 billion in 2021, primarily due to an increase in miscellaneous fixed-line telecommunication services revenue, partially offset by decreases in fixed-line telephone service revenue and fixed-line interconnection revenue.
---	---
-	Miscellaneous fixed-line telecommunication services revenue increased by 27.7% to Won 1,001.9 billion in 2022 from Won 784.6 billion in 2021, primarily due to an increase in revenue from our business communications services, including our data center services.
---	---
-	Fixed-line telephone service revenue decreased by 27.8% to Won 156.7 billion in 2022 from Won 217.0 billion in 2021, primarily due to decreases in residential calling volume as a result of a continued shift in consumer preference toward wireless communication and the number of fixed-line telephone subscribers to 3.56 million as of December 31, 2022 from 3.63 million as of December 31, 2021.
---	---
-	Fixed-line interconnection revenue decreased by 69.6% to Won 21.2 billion in 2022 from Won 69.8 billion in 2021, primarily due to a decrease in interconnection rates, as well as decreases in residential calling volume and the number of fixed-line telephone subscribers as described above.
---	---

•	Others: The revenue of our others segment increased by 56.0% to Won 549.7 billion in 2022 from Won 352.4 billion in 2021, primarily due to our acquisition of SK M&Service in February 2022 as well as a 4.1% increase in revenue of SK Stoa’s T-commerce business to Won 329.3 billion in 2022 from Won 316.2 billion in 2021, which mainly reflected an increase in the volume of merchandise sold.

Operating Expenses. Our consolidated operating expenses increased by 2.2% to Won 15,766.9 billion in 2022 from Won 15,432.0 billion in 2021, primarily due to a 6.5% increase in labor costs to Won 2,449.8 billion in 2022 from Won 2,300.8 billion in 2021, a 8.6% increase in cost of goods sold to Won 1,268.1 billion in 2022 from Won 1,167.4 billion in 2021, a 6.8% increase in other operating expenses to Won 1,529.0 billion in 2022 from Won 1,431.6 billion in 2021 and a 1.7% increase in commissions to Won 5,518.8 billion in 2022 from Won 5,426.1 billion in 2021.

The increase in labor costs was primarily due to a general increase in the base salary of our employees.

The increase in cost of goods sold was primarily due to an increase in sales of miscellaneous telecommunications equipment to our corporate customers.

The increase in other operating expenses was primarily due to an increase in utilities, mainly reflecting increases in the number of base stations and electricity prices.

The increase in commissions was primarily due to increases in fees paid to third party service and contents providers relating to our new businesses and the sales of IPTV service subscriptions through our authorized dealers and independent retailers.

The following sets forth additional information about our segment operating expenses with respect to each of our reportable segments, which do not include certain expenses that are classified as other non-operating expenses under K-IFRS. For more information on the difference between our consolidated operating expenses pursuant to K-IFRS and pursuant to IFRS as issued by the IASB, see “ — Explanatory Note Regarding Presentation of Certain Financial Information under K-IFRS” and note 4(2) of the notes to our consolidated financial statements.

•	Cellular services: The segment operating expenses for our cellular services segment remained relatively constant at Won 11,646.2 billion in 2022 compared to Won 11,643.4 billion in 2021, as increases in SK Telecom’s labor costs as described above as well as fees paid to third party service and contents providers and advertising fees relating to SK Telecom’s new businesses were substantially offset by decreases in commissions paid to SK Telecom’s authorized dealers and independent retailers, as the market for new 5G subscribers began to stabilize, and depreciation and amortization expenses, primarily reflecting the expiration of the applicable amortization period for certain of our software assets and a decrease in the amortization expenses for our frequency usage rights.
•	Fixed-line telecommunication services: The segment operating expenses for our fixed-line telecommunication services segment increased by 3.4% to Won 3,494.2 billion in 2022 from Won 3,380.2 billion in 2021, primarily due to an increase in SK Broadband’s marketing expenses and commissions, primarily reflecting an increase in the sale of IPTV service subscriptions.
---	---
•	Others: The segment operating expenses for our others segment increased by 63.6% to Won 552.5 billion in 2022 from Won 337.8 billion in 2021, primarily due to our acquisition of SK M&Service in February 2022 and an increase in the operating expenses of SK Stoa, which mainly reflected a corresponding increase in the revenue generated by SK Stoa’s T-commerce business.
---	---

Operating Profit. Our consolidated operating profit increased by 11.3% to Won 1,594.3 billion in 2022 from Won 1,432.4 billion in 2021, as the increase in operating revenue outpaced the increase in operating expenses in 2022.

The following sets forth additional information about our segment operating profit (loss) with respect to each of our reportable segments. Our segment operating profit (loss) with respect to each of our reportable segments is based on K-IFRS and the sum of segment operating profit for all three reportable segments differs from our consolidated operating profit presented in accordance with IFRS as issued by the IASB. For a reconciliation of operating profit presented in accordance with IFRS as issued by the IASB and operating profit presented in accordance with K-IFRS, see “— Explanatory Note Regarding Presentation of Certain Financial Information under K-IFRS” and note 4(2) of the notes to our consolidated financial statements.

•	Cellular services: The segment operating profit of our cellular services segment increased by 20.6% to Won 1,296.1 billion in 2022 from Won 1,075.1 billion in 2021, due to the greater increase in segment operating revenue as compared to the increase in segment operating expenses, for the various reasons described above. The segment operating margin of our cellular services segment increased to 10.0% in 2022 from 8.5% in 2021.
•	Fixed-line telecommunication services: The segment operating profit of our fixed-line telecommunication services segment increased by 7.2% to Won 318.8 billion in 2022 from Won 297.5 billion in 2021, due to the greater increase in segment operating revenue as compared to the increase in segment operating expenses, for the reasons described above. The segment operating margin of our fixed-line telecommunication services segment increased to 8.4% in 2022 from 8.1% in 2021.
---	---
•	Others: Our others segment recorded operating loss of Won 2.8 billion in 2022 compared to operating profit of Won 14.6 billion in 2021, due to the greater increase in segment operating expenses as compared to the increase in segment operating revenue as described above. As a result, the segment operating margin of our others segment declined to (0.5)% in 2022 from 4.1% in 2021.
---	---

Finance Income and Finance Costs. Our finance income increased by 15.9% to Won 179.8 billion in 2022 from Won 155.1 billion in 2021, primarily due to a 56.8% increase in gain relating to financial instruments at fair value through profit or loss to Won 94.4 billion in 2022 from Won 60.2 billion in 2021, primarily relating to a decrease in the fair value of long-term derivative financial liability recognized with respect to our rights and obligations under the shareholders agreement with the former shareholders of Tbroad, which we had entered into in connection with the Tbroad Merger in April 2020, as well as a 59.4% increase in interest income to Won 58.5 billion in 2022 from Won 36.7 billion in 2021, which primarily reflected higher market interest rates. The impact of such increases was partially offset by a decrease in gain on sale of accounts receivable – other related to our sale of accounts receivable for handset installment payments to Won 1.0 billion in 2022 from Won 27.7 billion in 2021.

Our finance costs increased by 44.6% to Won 456.3 billion in 2022 from Won 315.6 billion in 2021, primarily due to a loss on sale of accounts receivable – other related to our sale of accounts receivable for handset installment payments of Won 61.8 billion in 2022 compared to nil in 2021, as well as a 17.4% increase in in interest expense to Won 328.3 billion in 2022 from Won 279.7 billion in 2021, which primarily reflected higher market interest rates.

Gains (Losses) Related to Investments in Associates and Joint Ventures. We recorded net losses related to investments in associates and joint ventures of Won 81.7 billion in 2022, primarily due to loss of Won 48.6 billion from disposal of our equity interest in HanaCard in 2022, compared to net gains related to investments in associates and joint ventures of Won 446.3 billion in 2021, primarily due to an increase of Won 270.3 billion in our share of profits of SK China Company Ltd., as well as gain of Won 100.0 billion from disposal of our equity interest in SK Wyverns Co., Ltd.

Income Tax. Income tax expense decreased by 35.5% to Won 288.3 billion in 2022 from Won 446.8 billion in 2021 primarily due to a 28.1% decrease in profit before income tax to Won 1,236.2 billion in 2022 from Won 1,718.2 billion in 2021. Our effective tax rate in 2022 decreased to 23.3% from 26.0% in 2021. Our effective tax

rates in 2022 and 2021 were lower than the maximum statutory tax rate of 27.5% for both years, primarily due to, in the case of 2022, a decrease in net deferred tax liability due to an expected decrease in the corporate income tax rate in Korea beginning in 2023, as well as changes in unrecognized deferred taxes and tax credits and tax reductions, and in the case of 2021, changes in unrecognized deferred taxes and tax credits and tax reductions.

Profit from Continuing Operations. Principally as a result of the factors discussed above, our profit from continuing operations decreased by 25.5% to Won 947.8 billion in 2022 from Won 1,271.4 billion in 2021.

Profit from Discontinued Operations. We did not recognize any profit from discontinued operations in 2022. Our profit from discontinued operations, net of taxes, was Won 1,147.6 billion in 2021, primarily reflecting our share of profits of SK Hynix, our equity interest in which was transferred to SK Square as of November 1, 2021 pursuant to the Spin-off.

Profit for the Year. Principally as a result of the factors discussed above, our profit for the year decreased by 60.8% to Won 947.8 billion in 2022 from Won 2,419.0 billion in 2021. Profit for the year as a percentage of operating revenue and other income was 5.5% in 2022 compared to 14.3% in 2021.

Item 5.B.	Liquidity and Capital Resources

Liquidity

We had a working capital deficit (current liabilities in excess of current assets) of Won 408.4 billion as of December 31, 2023, Won 827.3 billion as of December 31, 2022 and Won 607.8 billion as of December 31, 2021. The decrease in our working capital deficit as of December 31, 2023 compared to December 31, 2022 was due to a decrease in our current liabilities, primarily in relation to accounts payable – other, current portion of long-term debt and short-term borrowings, which outpaced the decrease in our current assets, primarily in relation to cash and cash equivalents and accounts receivable – other, net. We plan to fund our current liabilities with the cash flow generated by our operations, proceeds from the disposal of investment securities or property and equipment that are no longer deemed profitable and proceeds from additional borrowings, as necessary.

We had cash and cash equivalents and short term financial instruments of Won 1,749.9 as of December 31, 2023 and Won 2,119.5 billion as of December 31, 2022, and we had cash and cash equivalents, short term financial instruments and short term investment securities of Won 1,386.4 billion as of December 31, 2021. We had outstanding short term borrowings and current portion of long-term debt of Won 1,621.8 billion as of December 31, 2023, Won 2,110.6 billion as of December 31, 2022 and Won 1,443.3 billion as of December 31, 2021. As of December 31, 2023, SK Telecom had credit lines with several local banks that provided for borrowing of up to Won 1,050.0 billion, all of which was available for borrowing.

For the presentation of the statement of cash flows for the year ended December 31, 2021 in our consolidated financial statements, we elected to combine cash flows from discontinued operations with cash flows from continuing operations within each cash flow statement category. The absence of cash flows from discontinued operations is not expected to affect our future liquidity and capital resources.

Cash flows from operating activities and debt financing have been our principal sources of liquidity. We had cash and cash equivalents of Won 1,455.0 billion as of December 31, 2023, Won 1,882.3 billion as of December 31, 2022 and Won 872.7 billion as of December 31, 2021. We believe that we have a variety of alternatives available to us to satisfy our financial requirements to the extent that they are not met by funds generated by operations, including the issuance of debt securities and bank borrowings.

	Year ended December 31,									Change
	2023			2022			2021			2022 to 2023					2021 to 2022
	(In billions of Won, except percentages)
Net cash provided by operating activities	W	4,947.2		W	5,159.3		W	5,031.3		W	(212.1	)	(4.1	)%	W	128.0		2.5	%
Net cash used in investing activities		(3,352.9	)		(2,807.8	)		(3,486.2	)		(545.1	)	19.4			678.4		(19.5	)
Net cash used in financing activities		(2,021.0	)		(1,349.9	)		(2,053.6	)		(671.1	)	49.7			703.7		(34.3	)
Net increase (decrease) in cash and cash equivalents		(426.7	)		1,001.6			(508.5	)		(1,428.3	)	N.A.			1,510.1		N.A.
Effect of exchange rate changes on cash and cash equivalents held in foreign currencies		(0.6	)		7.9			11.6			(8.5	)	N.A.			(3.7	)	31.9
Cash and cash equivalents at beginning of period		1,882.3			872.7			1,369.7			1,009.6		115.7			(497.0	)	(36.3	)
Cash and cash equivalents at end of period		1,455.0			1,882.3			872.7			(427.3	)	(22.7	)		1,009.6		115.7

N.A. = Not available

Cash Flows from Operating Activities. Net cash provided by operating activities was Won 4,947.2 billion in 2023, Won 5,159.3 billion in 2022 and Won 5,031.3 billion in 2021 (which includes Won 59.3 billion of net cash provided by operating activities of our discontinued operations). Profit for the year was Won 1,145.9 billion in 2023, Won 947.8 billion in 2022 and Won 2,419.0 billion in 2021 (of which Won 1,147.6 billion was from discontinued operations). Net cash provided by operating activities in 2023 decreased by 4.1% from 2022, primarily due to decreases in accounts payable – other and accrued expenses, mainly reflecting a decrease in the outstanding year-end payables related to our operational expenditures. Net cash provided by operating activities in 2022 increased by 2.5% from 2021, primarily due to an increase in accounts payable – other, mainly reflecting an increase in the outstanding year-end payables relating to our operational expenditures, as well as income tax paid in 2022.

Cash Flows from Investing Activities. Net cash used in investing activities was Won 3,352.9 billion in 2023, Won 2,807.8 billion in 2022 and Won 3,486.2 billion in 2021 (which includes Won 967.1 billion of net cash used in investing activities of our discontinued operations). Cash inflows from investing activities were Won 272.6 billion in 2023, Won 1,229.9 billion in 2022 and Won 600.2 billion in 2021. Cash inflows in 2023 mainly reflected collection of short-term loans, primarily related to SK Telecom’s collection of short-term loans that were made to authorized dealers, and proceeds from disposals of long-term investment securities, mainly related to the disposal of investment assets held by our subsidiary Atlas Investment. Cash inflows in 2022 mainly reflected proceeds from disposals of investments in associates and joint ventures, mainly related to the disposal of our equity interest in HanaCard, and a decrease in long-term financial instruments, mainly related to the acquisition of shares of Hana Financial Group. Cash inflows in 2021 mainly reflected a net decrease in short-term financial instruments, mainly related to SK Broadband’s disposal of certain investment securities, and collection of short-term loans, primarily related to SK Telecom’s collection of short-term loans that were made to authorized dealers.

Cash outflows for investing activities were Won 3,625.5 billion in 2023, Won 4,037.7 billion in 2022 and Won 4,086.4 billion in 2021. Cash outflows in 2023, 2022 and 2021 were primarily attributable to expenditures related to the acquisition of property and equipment of Won 2,973.9 billion, Won 2,908.3 billion and Won 2,915.9 billion, respectively, primarily in connection with the acquisition of 5G and LTE equipment, the expansion of our 5G network and the maintenance of our LTE network.

Cash Flows from Financing Activities. Net cash used in financing activities was Won 2,021.0 billion in 2023, Won 1,349.9 billion in 2022 and Won 2,053.6 billion in 2021 (which includes Won 88.9 billion of net cash used in financing activities of our discontinued operations). Cash inflows from financing activities were Won 2,416.8 billion in 2023, Won 1,802.0 billion in 2022 and Won 1,796.8 billion in 2021. Such inflows were primarily driven by the issuance of debentures, which provided cash of Won 1,785.1 billion in 2023, Won 1,200.1 billion in 2022 and Won 873.2 billion in 2021, and, for 2023, proceeds from issuance of hybrid bonds, which provided cash of Won 398.5 billion, and for 2022 and 2021, proceeds from long-term borrowings, which provided cash of Won 440.0 billion and Won 350.0 billion, respectively.

Cash outflows for financing activities were Won 4,437.8 billion in 2023, Won 3,151.9 billion in 2022 and Won 3,850.4 billion in 2021. Cash outflows for financing activities included repayments of debentures, repayments of long-term borrowings, payments of dividends, repayments of other long-term payables, repayments of lease liabilities and redemption of hybrid bonds, among other items. Repayments of debentures were Won 1,869.2 billion in 2023, Won 1,390.0 billion in 2022 and Won 890.0 billion in 2021. Repayments of long-term borrowings were Won 125.0 billion in 2023, Won 41.5 billion in 2022 and Won 286.9 billion in 2021. Payments of dividends were Won 773.8 billion in 2023, Won 904.0 billion in 2022 and Won 1,028.5 billion in 2021. Repayments of other long-term payables were Won 400.2 billion in 2023, Won 400.2 billion in 2022 and Won 426.3 billion in 2021. In addition, repayments of lease liabilities were Won 402.5 billion in 2023, Won 401.1 billion in 2022 and Won 431.7 billion in 2021. Acquisition of treasury shares was Won 285.5 billion in 2023, nil in 2022 and Won 76.1 billion in 2021. Redemption of hybrid bonds was Won 400.0 billion in 2023. Cash outflows for spin-off were Won 626.0 billion in 2021.

As of December 31, 2023, we had total long-term debt (excluding current portion) outstanding of Won 7,421.9 billion, which included debentures in the amount of Won 7,106.3 billion and bank and institutional borrowings in the amount of Won 315.6 billion. As of December 31, 2022, we had total long-term debt (excluding current portion) outstanding of Won 7,192.2 billion, which included debentures in the amount of Won 6,524.1 billion and bank and institutional borrowings in the amount of Won 668.1 billion. For a description of our long-term debt, see note 18 of the notes to our consolidated financial statements.

As of December 31, 2023, we had (i) Won 7,000.0 billion aggregate principal amount of Korean Won-denominated debentures outstanding, of which SK Telecom issued Won 5,780.0 billion and SK Broadband issued Won 1,220.0 billion, and (ii) Won 1,351.3 billion aggregate principal amount of debentures outstanding denominated in U.S. dollars. The fixed interest rates of our debentures range from 1.17% to 6.63% depending on the offering size, maturity, interest rate environment at the time of the offering and currency, among other factors. We have a diversified maturity profile with respect to our debentures. See “— Contractual Obligations and Commitments” for more details.

As of December 31, 2023, substantially all of our foreign currency-denominated long-term borrowings and debentures, which in the aggregate amounted to 14.8% of our total outstanding long-term debt, including the current portion and net of present value discount and discounts on bonds as of such date, was denominated in Dollars. However, substantially all of our revenue and operating expenses are denominated in Won. We generally pay for imported capital equipment in Dollars. Appreciation of the Won against the Dollar will result in net foreign currency transaction and translation gains, while depreciation of the Won against the Dollar will result in net foreign currency transaction and translation losses. Changes in foreign currency exchange rates will also affect our liquidity because of the effect of such changes on the amount of funds required for us to make interest and principal payments on our foreign currency-denominated debt. For a description of swap or derivative transactions we have entered into, among other transactions, to mitigate the effects of such losses, see “Item 11. Quantitative and Qualitative Disclosures about Market Risk.”

Capital Requirements

Historically, capital expenditures, repayment of outstanding debt, frequency usage payments and lease payments have represented our most significant use of funds. In recent years, we have also increasingly dedicated

capital resources to develop and invest in new ICT businesses (some of which were transferred to SK Square as of November 1, 2021 pursuant to the Spin-off) as well as other innovative services and products utilizing our AI and digital infrastructure capabilities and our telecommunications platforms.

To fund our scheduled debt repayment and planned capital expenditures over the next several years, we intend to rely primarily on cash flows from operating activities, as well as bank and institutional borrowings, and offerings of debt or equity in the domestic or international markets. We believe that these sources will be sufficient to fund our planned capital expenditures for 2024. Our ability to rely on these alternatives could be affected by the liquidity of the Korean financial markets or by Government policies regarding Won and foreign currency borrowings and the issuance of equity and debt. Our failure to make needed expenditures would adversely affect our ability to sustain subscriber growth and provide quality services and, consequently, our results of operations.

Capital Expenditures. The following table sets forth our actual capital expenditures for 2023, 2022 and 2021, in each case including capital expenditures relating to discontinued operations:

	Year ended December 31,
	2023		2022		2021
	(In billions of Won)
Wireless Networks^(1)^	W	1,380.6	W	1,833.4	W	1,850.9
Fixed-line Network^(2)^		999.5		820.2		822.8
Others^(3)^		593.8		254.7		242.2
Total	W	2,973.9	W	2,908.3	W	2,915.9
(1)	Includes investments in wireless networks, primarily our 5G, LTE and Wi-Fi networks, as well as other capital expenditures related to our networks.
---	---
(2)	Includes all capital expenditures made by SK Broadband.
---	---
(3)	Includes non-network related investments such as capital expenditures for product development, upgrades of our information technology systems and equipment and investments in data infrastructure, including certain investments made in connection with our discontinued operations.
---	---

We set our capital expenditure budget for each upcoming year on an annual basis. Our actual capital expenditures in 2023, 2022 and 2021 were Won 2,973.9 billion, Won 2,908.3 billion and Won 2,915.9 billion, respectively. Of such amounts, we spent approximately 46.4%, 63.2% and 63.5%, respectively, on capital expenditures related to building and enhancing our wireless networks. Our capital expenditures related to building and enhancing our wireless networks, including in connection with our 5G network which we launched in 2019, have generally decreased in recent years. See “Item 4.B. Business Overview — Cellular Services — Digital Wireless Network — 5G Network.” Our other non-network related capital expenditures in 2023, 2022 and 2021 primarily related to developing new products, services and technology, upgrades to our information technology systems and equipment and investments in data infrastructure, which included certain capital expenditures made in connection with our discontinued operations.

In particular, we have been making capital expenditures to further expand and improve our 5G network. We commenced commercial 5G services in April 2019. We have also been making capital expenditures to maintain our LTE network. For a more detailed description of our 5G and LTE networks, see “Item 4.B. Business Overview — Cellular Services — Digital Wireless Network.” We plan to continue to make capital investments in 2024 to build and expand our 5G network and develop related technologies, as well as to maintain our LTE network.

The following table sets forth our payment obligations relating to our acquisitions of frequency usage rights.

Spectrum	Technology (width)	Date of<br>Acquisition<br>(including<br>renewals)	Initial Payment<br>Amount<br>(in billions of Won)			Annual Payment<br>Amount<br>(in billions of Won)
800 MHz	LTE (20 MHz)	Jul. 2021	W	56.8	2021	W	34.1	2022-2026
1.8 GHz	LTE (20 MHz + 15 MHz)	Dec. 2021		136.9	2021		82.2	2022-2026
2.1 GHz	LTE (30 MHz)<br>WCDMA (10 MHz)	Dec. 2021		102.9	2021		61.8	2022-2026
2.6 GHz	LTE (40 MHz + 20 MHz)	Aug. 2016		332.5	2016		99.8	2017-2026
3.5 GHz	5G (100 MHz)	Dec. 2018		304.6	2018		91.4	2019-2028

We currently expect to spend a similar amount for capital expenditures in 2024 compared to 2023 for a range of projects, including investments to further expand and improve our 5G network, investments to maintain our LTE network and related services, investments to improve and expand our Wi-Fi network, investments to develop our IoT solutions and platform services business portfolio, including AI solutions, investments in data infrastructure, investments in further research and development of 5G technology, investments in businesses that can potentially leverage our 5G network, and investments in funding for mid- to long-term research and development projects. Such projects also include other initiatives related to the development of new growth businesses and our ongoing businesses in the ordinary course, in each case with an emphasis on incorporating AI technology into our various existing and new business areas. In 2021, the MSIT reallocated a total of 310 MHz of frequency bandwidths to KT, LG U+ and us, 95 MHz of which in the 800 MHz, 2.1 GHz and 2.6 GHz spectrums was allocated to us. We would be required to spend additional amounts on capital expenditures in connection with our continued efforts to build out our networks on such reallocated bandwidths. However, our overall expenditure levels and our allocation among projects remain subject to many uncertainties. We may increase, reduce or suspend our planned capital expenditures for 2024 or change the timing and area of our capital expenditure spending from the estimates described above in response to market conditions or for other reasons. We may also make additional capital expenditures and other investments beyond our currently anticipated level as opportunities arise, including in relation to any acquisitions of additional frequency usage rights or execution of additional AI-related investments. Accordingly, we periodically review the amount of our capital expenditures and other investments and may make adjustments based on the current progress of capital expenditure projects and market conditions. No assurance can be given that we will be able to meet any such increased expenditure requirements or obtain adequate financing for such requirements, on terms acceptable to us, or at all.

Repayment of Outstanding Debt. As of December 31, 2023, our principal repayment obligations with respect to long-term borrowings, bonds and short-term borrowings outstanding were as follows for the periods indicated:

Year Ending December 31,	Total
	(In billions of Won)
2024	W	1,622.5
2025		2,419.1
2026		918.1
2027 and thereafter		4,117.6

Lease Payments. Pursuant to IFRS 16, Leases, we recognize right-of-use assets representing our rights to use the underlying assets and lease liabilities representing our obligation to make lease payments in relation to substantially all of our lease arrangements, except for certain short-term leases and leases of low-value assets. As of December 31, 2023, our aggregate current and long-term lease liabilities amounted to Won 1,611.4 billion, which primarily related to land, buildings and structures we leased from third parties in the ordinary course of

our business. As of December 31, 2023, our payment obligations with respect to our lease liabilities were as follows for the periods indicated:

Year Ending December 31,	Total
	(In billions of Won)
2024	W	386.2
2025		390.0
2026		281.8
2027 and thereafter		841.9

Investments in New Growth Businesses. We may also require capital for investments to support our development of new growth businesses.

In February 2022, we acquired a 100.0% interest in SK M&Service for Won 72.9 billion in order to strengthen the competitiveness of our online distribution capabilities and explore synergies with our other businesses in the ICT sector.

In June 2022, we acquired a minority equity interest in HAEGIN Co., Ltd., a metaverse game developer, for Won 25.1 billion in order to improve the user experience of our AI service customers and add game-related functions to our metaverse platforms.

In June 2023, we acquired a minority equity interest in Joby Aviation Inc., a transportation company based in Santa Cruz developing electric vertical take-off and landing aircrafts, for US$100 million as part of our ongoing efforts to develop emissions-free aerial ridesharing services to cities and communities across Korea.

In August 2023, we acquired a minority equity interest in Anthropic, a generative AI technology company based in San Francisco, for US$100 million in order to jointly develop a multilanguage large-language model customized for telecommunications companies.

From time to time, we may make other investments in telecommunications or other businesses in Korea or abroad, where we perceive attractive opportunities for investment. From time to time, we may also dispose of existing investments when we believe that doing so would be in our best interest. Effective as of November 1, 2021, we conducted the Spin-off, pursuant to which we spun off our equity interests in the Spin-off Portfolio Companies engaged in the semiconductor and certain other non-telecommunications businesses to SK Square, a newly established holding company, and we distributed SK Square’s shares of common stock on a pro rata basis to the holders of our common stock. See “Item 4.A. History and Development of the Company.”

Severance Payments. The present value of our defined benefit obligations, which is the present value of total accrued and unpaid retirement and severance benefits for our employees, as of December 31, 2023, was Won 1,121.7 billion, which was more than offset by the fair value of our defined benefit plan assets of Won 1,292.4 billion as of such date. Accordingly, we recognized net defined benefit assets of Won 170.7 billion as of December 31, 2023.

Also see “Item 6.D. Employees — Employee Benefits” and note 21 of the notes to our consolidated financial statements.

Dividends. Total cash outflows for payments of dividends amounted to Won 773.8 billion in 2023, Won 904.0 billion in 2022 and Won 1,028.5 billion in 2021.

In April 2024, we distributed annual dividends at Won 1,050 per share (exclusive of aggregate interim dividends of Won 2,490 per share distributed during the course of 2023) to our shareholders for an aggregate payout amount of Won 223.3 billion.

Contractual Obligations and Commitments

The following summarizes our contractual cash obligations (excluding short-term leases and leases of low-value assets) at December 31, 2023, and the effect such obligations are expected to have on liquidity and cash flow in future periods:

	Payments Due by Period^(1)^
	Total		Less Than<br>1 Year		1-3 Years		4-5 Years		More Than<br>5 Years
	(In billions of Won)
Bonds
Principal	W	8,359.2	W	1,220.0	W	3,021.6	W	2,167.6	W	1,950.0
Interest		1,173.3		273.1		389.8		221.2		289.2
Long-term borrowings
Principal		718.1		402.5		315.6		—		—
Interest		21.7		14.6		7.1		—		—
Lease liabilities		1,899.9		386.2		671.8		354.7		487.2
Facility deposits		12.8		7.5		—		—		5.3
Other long-term payables^(2)^
Principal		1,290.2		369.2		738.2		182.8		—
Interest		80.3		34.1		38.9		7.3		—
Short-term borrowings		—		—		—		—		—
Total contractual cash obligations	W	13,555.5	W	2,707.2	W	5,183.0	W	2,933.6	W	2,731.7
(1)	We are contractually obligated to make severance payments to eligible employees we have employed for more than one year, upon termination of their employment, regardless of whether such termination is voluntary or involuntary. Accruals for severance indemnities are recorded based on the amount we would be required to pay in the event the employment of all our employees were to terminate at the balance date. However, we have not yet estimated cash flows for future periods. Accordingly, payments due in connection with severance indemnities have been excluded from this table.
---	---
(2)	Related to acquisition of frequency licenses. See note 19 of the notes to our consolidated financial statements.
---	---

See note 37 of the notes to our consolidated financial statements for details related to our other commitments and contingencies.

Item 5.C.	Research and Development, Patents and Licenses, etc.

We maintain a high level of spending on our research and development activity. We also donate funds to several Korean research institutes and educational organizations that focus on research and development activity. We believe that we must maintain a substantial in-house technology capability to achieve our strategic goals.

The main focus of our research and development activity is the development of new wireless technologies and services and value-added technologies and services for our 5G network and LTE network, such as wireless data communications, as well as the development of new technologies that reflect the growing convergence between telecommunications and other industries, such as AI, big data analytics, media, metaverse and urban air mobility. SK Telecom’s research and development activity is primarily conducted through our Global Solution Technology Center, which is subdivided into Future R&D Group, Cloud R&D Group, Vision R&D Group, Open AIX R&D Group, Media R&D Group and Global Solution Synergy Group. The Infrastructure Technology Group under our ICT Infrastructure Center also conducts related research and development activities.

Each business unit also has its own research team that can concentrate on specific short-term research needs, and some of our consolidated subsidiaries also have their own research and development organizations to focus

on activities related to their respective business areas. Such research teams permit our research center to concentrate on long-term, technology-intensive research projects. We aim to establish strategic alliances with selected domestic and foreign companies with a view to exchanging or jointly developing technologies, products and services.

Item 5.D.	Trend Information

These matters are discussed under “Item 5.A. Operating Results” and “Item 5.B. Liquidity and Capital Resources” above where relevant.

Item 5.E.	Critical Accounting Estimates

Our financial statements are prepared in accordance with IFRS as issued by the IASB. See notes 2(4) and 3 of the notes to our consolidated financial statements which provide summaries of certain critical accounting estimates that require our management to make difficult, complex or subjective judgments relating to matters which are highly uncertain and that may have a material impact on our financial conditions and results of operations.

Item 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
Item 6.A.	Directors and Senior Management
---	---

Directors and Senior Management

Our board of directors has ultimate responsibility for the management of our affairs. Under our articles of incorporation, our board is to consist of at least three but no more than twelve directors, more than half of whom must be independent non-executive directors. We currently have a total of nine directors, five of whom are independent non-executive directors. We elect our directors at a general meeting of shareholders with the approval of at least a majority of those shares present or represented at such meeting. Such majority must represent at least one-fourth of our total issued and outstanding shares with voting rights.

As required under relevant Korean laws and our articles of incorporation, we have a committee for recommendation of independent non-executive directors within the board of directors, the Independent Director Nomination Committee. Independent non-executive directors are appointed from among those candidates recommended by the Independent Director Nomination Committee.

The term of offices for directors is until the close of the third annual general shareholders meeting convened after he or she commences his or her term. Our directors may serve consecutive terms. The total term of office of independent directors may not exceed six years, and when combined with the term of office at our affiliates, may not exceed nine years. Our shareholders may remove them from office by a resolution at a general meeting of shareholders adopted by the holders of at least two-thirds of the voting shares present or represented at the meeting, and such affirmative votes also represent at least one-third of our total voting shares then issued and outstanding.

Representative directors are directors elected by the board of directors with the statutory power to represent our company.

The following are the names and positions of our executive and non-executive directors. The business address of all of our directors is the address of our registered office at SK T-Tower, 65, Eulji-ro, Jung-gu, Seoul 04539, Korea.

Executive directors are our directors who also serve as our executive officers, and they also comprise the senior management, or the key personnel who manage us. Their names, dates of birth and positions at our company, other positions and business experience are set forth below:

Name				Position	Other<br>Positions	Business<br> <br>Experience
Young Sang Ryu	May 1970	2018	2027	Executive<br>Director,<br>President and<br>Chief<br>Executive<br>Officer	President and<br>Chief Executive<br>Officer of SK<br>Broadband	President of Mobile Network Operations Division, SK Telecom; Executive Vice President of Business Development Group, SK Inc.; Head of Corporate Center, SK Telecom
Jong Ryeol Kang	Oct. 1964	2022	2025	Executive<br>Director, Head<br>of ICT Infra	—	Head of Corporate Culture Center, SK Telecom
Yang Seob Kim	Feb. 1966	2024	2027	Head of<br>Corporate<br>Planning and<br>Chief Financial<br>Officer	—	Head of Finance Division and Chief Financial Officer, SK Innovation;

Our current non-executive directors are as set forth below:

Name				Position	Other<br>Positions	Business Experience
Sung Hyung Lee	Dec. 1965	2024	2027	Non-executive<br>Director	President, Chief<br>Financial Officer<br>and Head of<br>Finance Division,<br>SK Inc.	President, Chief Financial Officer and Head of PM Division, SK Inc.; Head of Finance Division, SK Inc.; Head of Financial Management, SK Telecom; Head of Finance Department 1, SK Inc.
Mi Kyung Noh	Aug. 1965	2024	2027	Independent<br>Non-executive<br>Director	Regional Head of<br>Credit Risk<br>Review, Asia<br>Pacific Risk,<br>HSBC Hong<br>Kong	Executive Vice President and Chief Risk Officer, HSBC Seoul; Executive Vice President and Deputy Chief Risk Officer, HSBC Seoul
Seok-Dong Kim	May 1953	2019	2025	Independent<br>Non-executive<br>Director	Chairman,<br>JIPYONG<br>Institute of<br>Humanities and<br>Society	Chairman, Financial Services Commission; Vice Minister, Ministry of Finance and Economy; Vice Chairman, Financial Supervisory Commission

Name				Position	Other<br>Positions	Business Experience
Yong-Hak Kim	Jan. 1953	2020	2026	Independent<br>Non-executive<br>Director	Professor<br>Emeritus, Yonsei<br>University	President, Yonsei University; BK Planning Committee, Ministry of Education; Member, Presidential Advisory Council of Policy Planning; Professor of Sociology, Yonsei University
Junmo Kim	Sept. 1976	2020	2026	Independent<br>Non-executive<br>Director	Associate<br>Professor of<br>Electrical<br>Engineering,<br>KAIST	Assistant Professor of Electrical Engineering, KAIST; Senior Researcher, Samsung Advanced Institute of Technology
Haeyun Oh	Nov. 1974	2023	2026	Independent<br>Non-executive<br>Director	President, KAIST<br>Artificial<br>Intelligence<br>Research<br>Institute	Director, KAIST Center for MARS Artificial Intelligence Research

Other Executive Officers

In addition to our executive directors, we currently have the following executive officers:

Name	Month and<br> <br>Year of<br> <br>Birth	Position	Business<br> <br>Experience
Hyuncheol Ku	Dec. 1971	Head of Sales	Leader of Policy Cell
Young Sang Kwon	Mar. 1971	Head of CR Strategy	Leader of Policy System Team
Hai Sung Kwon	Jul. 1975	Head of MNO AI Platform	Acting Head of AI/DT
Kyeong Deog Kim	Apr. 1966	Head of Enterprise Business Division	Chief Executive Officer, Dell Technologies Korea
Dae Sung Kim	Dec. 1971	Head of Corporate Planning	Head of MNO Support
Do Youn Kim	Feb. 1973	Head of Ethics Management	Vice President, SK China
Dong Hyun Kim	May 1977	Head of Brand Communications	Acting Head of Brand Communications
Myoung Gook Kim	Jul. 1972	Head of Cloud CO	Acting Head of Cloud Business
Byong Jun Kim	Feb. 1970	Officer of SK Research Institute	Leader of mySUNI Innovation Design College
Sang Bum Kim	Jul. 1970	Head of Distribution	Acting Head of Distribution
Seong Joon Kim	Jul. 1970	Head of MNO AI Marketing	Representative of Service Top
Yong Hun Kim	Jul. 1978	Head of AI Service Business Division	Chief Product Officer, WooWa Brothers
Eun Jung Kim	May 1978	Officer of SV Promotion Team, SUPEX Council Project	Acting Officer of SV Promotion Team, SUPEX Council Project
Jung Hoon Kim	Nov. 1963	Head of IT Infra	Head of Platform Infrastructure Group
Jiwon Kim	Jun. 1985	Head of AI Model	Professional Researcher, Samsung Advanced Institute of Technology

Name	Month and<br> <br>Year of<br> <br>Birth	Position	Business<br> <br>Experience
Ji Eun Kim	Dec. 1973	Officer of SV Promotion Team, SUPEX Council Project	Head of Marketing Department, Mintit
Jee Hyun Kim	Oct. 1972	Officer of SK Research Institute	Research Officer of Deep Change, SK Research Institute
Ji Hyung Kim	Oct. 1971	Head of Integrated Marketing Strategy	Head of Untact CP
Ji Hoon Kim	Sept. 1978	Head of AI Assistant	Leader of Integrated Product Offering Team
Hyuk Kim	Sept. 1967	Head of Media Business & Alliance	Head of Media Business Support Group
Hogeun Kim	Sept. 1969	Head of Legal	Acting Head of Legal
Hee Sup Kim	Oct. 1968	Head of Communication	Head of Public Relations Office
Suk Kwon Na	Nov. 1966	Officer of SK Research Institute	Director of Statistical Policy, Statistics Korea
Jae Sang Noh	Mar. 1973	Head of Malaysia Office	Country Office Project Leader, SK E&S Indonesia
Hoon Do	Sept. 1973	Officer of PR Team, SUPEX Council Project	Head of PR, SK ecoplant
Jung Hwan Ryu	Jun. 1970	Head of Infra Strategy & Tech CT	Head of Infrastructure Support Group
Kap In Moon	May 1969	Head of Metropolitan Area CP	Head of Strategy Group Team
Kyu Hyun Park	May 1972	Head of Digital Communication	Acting Head of Digital Communication
Myung Soon Park	Feb. 1969	Head of Infra AI/DT	Head of AI Business Unit
Yong Joo Park	May 1965	Head of ESG	Seoul Central District Prosecutor’s Office
Ji Su Park	Jun. 1976	Officer of Talent Development, SUPEX Council Project	Project Leader of HR Support Team, SUPEX Council Project
Byeong Chan Bai	Jun. 1972	Head of Mobile CO	Representative, SK USA
Jae Jun Bae	Jan. 1972	Head of Enterprise Business Strategy	Head of Corporate Planning, SK Broadband
Jae Won Bok	Aug. 1973	Head of Infra Red	Acting Head of IP Infrastructure
Jin Woo So	Dec. 1961	Chairman of China’s Foreign Cooperation, SUPEX Council Project	Representative, SK Planet
Ji Hwan Suk	Sept. 1976	Head of Data	Acting Head of Cloud Data
Suk Ham Sung	Apr. 1970	Head of Policy Cooperation	Evaluation Manager of Performance Evaluation Office, MSIT
Jin Soo Seong	May 1968	Head of Infra Service CT	Head of Daegu Infrastructure Division
In Hyuk Sohn	Oct. 1978	Head of GS AIX Development	Head of PMO
Sang Wook Shin	Jun. 1979	Head of Ad Business	Head of A. Service Unit
Yong Sik Shin	Aug. 1971	Head of Enterprise AI CO	Head of Energy Business Team
Jung Whan Ahn	Jul. 1966	Head of Corporate Culture	Head of HR Support Division, SK shieldus
June Hyeon Ahn	Nov. 1969	Officer of CR Team, SUPEX Council Project	Officer of Corporate Relations Team, SUPEX Council Project
Maeng Seog Yang	Mar. 1969	Head of Metaverse CO	Head of 5GX MNO Business Group

Name	Month and<br> <br>Year of<br> <br>Birth	Position	Business<br> <br>Experience
Seung Hyun Yang	Apr. 1969	Head of Global Solution Tech	Vice President, Konan Technology
Jong Hwan Um	Jul. 1974	Head of ESG Innovation	Project Leader of Business Support Team, SK Inc.
Sung Jin Yeum	Oct. 1972	Officer of Corporate Culture Department	Head of CR Support
Yong-Seop Yum	Oct. 1962	Head of SK Research Institute	Head of Future Research Office
Hui Kang Yea	Oct. 1970	Head of Brand Strategy	Head of Brand 2 Office, Hyundai Card
Kyung Sig Oh	Mar. 1966	Head of Sports Marketing	Leader of Sports Communications Team
Se Hyeon Oh	Jul. 1963	Head of Web3 CO	Head of DT Business Development Division, SK C&C
Kyung Sang Yu	Dec. 1981	Head of Strategy & Development	Director of the Investment Center, SK Inc
Jae Ho Yoo	Dec. 1973	Head of Portfolio Management	Growth Business Group, Eleven Street
Chul Jun Yu	Sept. 1971	Head of Smart Device Center	Head of Service Ace
Sung Eun Yoon	Jan. 1973	Officer of Communication Team, SUPEX Council Project	Head of Corporate Relations Strategy Office Policy System Team
Yong Chul Yoon	May 1965	Officer of SK Research Institute	Head of Department, MBC Newsroom
Jae Woong Yoon	Nov. 1972	Head of MNO AI Service	Head of 5GX Cluster Marketing
Hyeong Sig Yoon	Apr. 1968	Head of Infra Customer CT	Head of Infrastructure DT Team
Gahp Jae Lee	Feb. 1973	Head of Region CP	Head of Central Marketing Office
Kwan Woo Lee	Jun. 1973	Head of Subscription Development	Head of Data Development Operations Group
Gyu Sik Lee	Jan. 1970	Head of AI Contact Business	Leader of Change 1 Cell
Kun Koo Lee	Aug. 1976	Officer of Strategy Support Team, SUPEX Council Project	Project Leader of Strategy Support Team, SUPEX Council Project
Ki Yoon Lee	Dec. 1969	Head of CR	Project Leader of Customer Value Innovation Office
Dong Kee Lee	Jan. 1982	Head of Cloud R&D	Head of 5GX MEC Product
Sang Gu Lee	Jul. 1970	Head of Messaging CO	Head of MNO Data Business Team
Seung Yeoll Lee	Feb. 1970	Head of PR	Head of Public Relations Planning
Young Tak Lee	Jul. 1972	Head of Growth Support	Acting Head of CR Support
Yong Suk Lee	Nov. 1961	Research Officer at SK Research Institute	Head of ESG Group, SK Research Institute
Jae Shin Lee	Feb. 1976	Head of AI Growth Strategy	Acting Head of Global AI Business Development
Jae Joon Lee	Jan. 1975	Head of SKTA	Acting Head of P-TF
Jung Ryong Lee	Dec. 1975	Head of Data Platform	Acting PO, Data Engineering
Jong Min Lee	Jul. 1978	Head of Future R&D	Head, Media Technology Institute

Name	Month and<br> <br>Year of<br> <br>Birth	Position	Business<br> <br>Experience
Jong Hoon Lee	Nov. 1975	Head of Infra Engineering	Acting Head of Infrastructure Solutions
Joo Young Lee	May 1975	Officer of SK Research Institute	RF Researcher, Deep Change
Joon Hyoung Lee	Dec. 1973	Head of Platform Development	Acting Head of A. Platform
Hyunwoo Lee	Dec. 1971	Head of GS AIDC Development	Acting Head of Global Business Development
Hye Yeon Lee	May. 1983	Head of Change Management	Acting Head of Change Management
Kyoo Nan Im	Apr. 1970	Director of SK Academy	Head of HR Support Division, SK Siltron
Bong Ho Lim	Dec. 1966	Head of Customer Business Division	Head of Metropolitan Area Marketing Division
Jeong Yeon Lim	May 1976	Head of Media R&D	Leader of Media Processing Development Team
Hyun Ki Chang	Jan. 1971	Head of MNO AIX CT	General Manager of Digital Platform Implementation, Shinhan Financial Group
Hong Sung Chang	Mar. 1969	Head of AdTech CO	Head of Data Technology Center
Dae Dug Jeong	Sept. 1967	Head of Finance	Head of Tax Team
Dae In Jeong	Jul. 1971	Head of SKTA GDG	Project Leader, SKTA
Doh Hee Jung	Sept. 1974	Head of AI Data	Head of Data Analysis Team 2
Min Young Jeong	Dec. 1986	Head of AI Platform	Tech Leader, Naver Clova
Suk Geun Chung	Dec. 1976	Head of Global/AI Tech Business Division	Head of CIC, Naver Clova
Jai Hun Jung	Jun. 1968	Head of Governance & External Affairs	Director of the Investment Support Center, SK Square
Jae Hyun Chung	Dec. 1959	Officer of ICT Advisory Division	Officer of Corporate Growth, SK Square
Chang Kawn Jung	Jul. 1970	Head of Serious-accident Prevention	Head of Infrastructure Engineering Group
Hui Yong Jeong	Mar. 1973	Head of GS Business Development	Head of Strategic Planning Office, SK Inc.
Dong Hwan Cho	Nov. 1970	Chief Information Officer	Head of Data CoE
Sang Hyuk Cho	Jun. 1972	Head of AI Strategic Partnership	Acting Head of Strategic Alliances
Young Log Cho	Jun. 1971	Officer of SK Research Institute	Assistant to Head of External Cooperation Office
Ik Hwan Cho	Oct. 1977	Head of Metaverse Development	Head of 5GX Service Development
Hyun Deuk Cho	Feb. 1975	Head of AI Communication	Acting Head of AI Phone
Young Hun Chae	Sept. 1969	Head of Daegu	Acting Head of Daegu
Jong Keun Chae	Jul. 1968	Head of Compliance	Head of Compliance Team
Nag Hun Choi	Nov. 1972	Head of Connectivity CO	Head of IoT Business Support Group
Dong Hee Choi	Feb. 1978	Head of Corporate Strategy	Head of Digital Invest Center, SK Inc.
Yong Jin Choi	Feb. 1977	Head of Open AIX R&D	Head of MNO DT Labs
Jai Won Choi	Oct. 1970	Head of Western Regional CP	Acting Head of West Region

Name	Month and<br> <br>Year of<br> <br>Birth	Position	Business<br> <br>Experience
Chang Won Chey	Aug. 1964	Vice President of SK Research Institute	Chief Executive Officer, SK Chemical
Tae Won Chey	Dec. 1960	Chairman	Representative Director of SK Inc., SK Innovation and SK Hynix
Hwan Seok Choi	Aug. 1971	Head of Corporate Strategy	Head of IPO Promotion
Myung Bok Ha	Mar. 1971	Head of Central Regional CP	Head of Service Ace
Min Yong Ha	Sept. 1970	Head of Global Solution Office	Head of Global Alliance Group
Sang Dong Han	Apr. 1974	Head of CR Support	Acting Head of Growth Support
Sun Kee Hong	Mar. 1972	Head of Metropolitan Infra	Head of Western Infra
Seung Tae Hong	Jul. 1971	Head of Customer Value Innovation	Leader of Portfolio Innovation Team
Jae Man Hwang	Feb. 1977	Head of HR	Acting Head of HR
Davis Eric Hartman	Oct. 1980	Head of GLM	Head of Global AI Development Group
Item 6.B.	Compensation
---	---

The aggregate of the remuneration paid and in-kind benefits granted to our directors (all executive directors, who also serve as our executive officers, and non-executive directors) during the year ended December 31, 2023 totaled approximately Won 4.1 billion.

The compensation of our directors who received total annual compensation exceeding Won 500 million in 2023 was as follows:

Name	Position			Composition of Total Compensation										Total<br>Compensation
			Salary			Bonus			Other Earned<br>Income			Severance
				(in millions of Won)
Young Sang Ryu		Executive Director		W	1,200		W	836		W	29		—	W	2,065	^(1)^
Jong Ryeol Kang		Executive Director			700			525			5		—		1,230	^(2)^
(1)	Does not include 25,380 performance stock units granted in consideration of short-term and long-term achievements (“PSUs”). See “— Other Equity-based Compensation — PSU Program” below.
---	---
(2)	Does not include 4,400 PSUs. See “— Other Equity-based Compensation — PSU Program” below.
---	---

Remuneration for our directors is determined by shareholder resolution. Severance allowances for our directors are determined by the board of directors in accordance with our regulation on severance allowances for officers, which was adopted by shareholder resolution. The regulation provides for monthly salary, performance bonus, severance payment and fringe benefits. The amount of performance bonuses is independently decided by a resolution of the board of directors.

The aggregate of the remuneration paid and in-kind benefits granted to our executive officers (excluding all executive directors, who also serve as our executive officers) during the year ended December 31, 2023 totaled approximately Won 47.2 billion.

The compensation of the five individuals who received the highest compensation among those who received total annual compensation exceeding Won 500 million in 2023 was as follows:

Name	Position	Composition of Total Compensation								Total<br>Compensation
		Salary		Bonus		Other Earned<br>Income		Severance
		(in millions of Won)
Jin Woo So	Vice Chairman	W	—	W	2,537	W	—	W	—	W	2,537
Man Seog Ryu	Head of SK Academy		489		362		—		1,391		2,242
Young Sang Ryu	Representative Director		1,200		836		29		—		2,065	^(1)^
Yong-Seop Yum	Head of SK Research Institute		825		888		—		—		1,713
HyunA Lee	Vice President		430		338		4		641		1,413	^(2)^
(1)	Does not include 25,380 PSUs. See “— Other Equity-based Compensation — PSU Program” below.
---	---
(2)	Does not include 1,000 PSUs. See “— Other Equity-based Compensation — PSU Program” below.
---	---

Stock Options

On February 25, 2021, our board of directors resolved to grant options to purchase shares of our common stock to certain directors and executive officers, which was approved by shareholder resolution on March 25, 2021. On February 24, 2022, our board of directors resolved to grant options to purchase shares of our common stock to certain directors and executive officers, which was approved by shareholder resolution on March 25, 2022. On February 24, 2023, our board of directors resolved to grant options to purchase shares of our common stock to certain directors and executive officers, which was approved by shareholder resolution on March 28, 2023. The following table summarizes the exercisable stock options granted to our current and former directors and executive officers as of March 31, 2024:

Recipient	Position						Exercise<br>price<br>(per share)
			From		To
Jung Ho Park	Former Executive Director, President and Chief Executive Officer	March 26, 2020		March 27, 2023		March 26, 2027	W	38,452	337,408
Young Sang Ryu	Executive Director, President and Chief Executive Officer	March 26, 2020		March 27, 2023		March 26, 2027		38,452	7,145
		March 25, 2021		March 26, 2023		March 25, 2026		50,276	18,190
		March 25, 2022		March 26, 2025		March 25, 2029		56,860	98,425	^(2)^
Jong Ryeol Kang	Executive Director, Head of ICT Infra	March 26, 2020		March 27, 2023		March 26, 2027		38,452	6,219
		March 25, 2021		March 26, 2023		March 25, 2026		50,276	7,136
		March 25, 2022		March 26, 2024		March 25, 2027		56,860	21,743
Hyoung Il Ha	Former Head of Corporate Development	March 26, 2020		March 27, 2023		March 26, 2027		38,452	5,955
		March 25, 2021		March 26, 2023		March 25, 2026		50,276	11,418
Poong Young Yoon	Former Head of Corporate Center 1	March 26, 2020		March 27, 2023		March 26, 2027		38,452	5,293
		March 25, 2021		March 26, 2023		March 25, 2026		50,276	10,203
Seong Ho Ha	Former Head of Corporate Relations Center	March 26, 2020		March 27, 2023		March 26, 2027		38,452	5,028
		March 25, 2021		March 26, 2023		March 25, 2026		50,276	5,830
		March 25, 2022		March 26, 2024		March 25, 2027		56,860	9,341
Dong Hwan Cho	Chief Information Officer	March 26, 2020		March 27, 2023		March 26, 2027		38,452	4,631
		March 25, 2021		March 26, 2023		March 25, 2026		50,276	5,375
		March 25, 2022		March 26, 2024		March 25, 2027		56,860	8,697
HyunA Lee	Head of Comm Service	March 26, 2020		March 27, 2023		March 26, 2027		38,452	4,631
		March 25, 2021		March 26, 2023		March 25, 2026		50,276	8,746

Recipient	Position	Grant date^(1)^	Exercise period
			From	To
Jae Seung Song	Former Head of Corporate Development Croup	March 25, 2021	March 26, 2023	March 25, 2026	50,276	8,047
Myung Jin Han	Former Head of Corporate Strategy	March 25, 2021	March 26, 2023	March 25, 2026	50,276	4,403
		March 25, 2022	March 26, 2024	March 25, 2027	56,860	11,274
Byung Hoon Ryu	Former Head of Corporate Strategy Group	March 25, 2021	March 26, 2023	March 25, 2026	50,276	3,796
Bong Ho Lim	Head of Customer Business	March 25, 2022	March 26, 2024	March 25, 2027	56,860	8,858
Jin Won Kim	Former Head of Corporate Planning	March 25, 2022	March 26, 2024	March 25, 2027	56,860	10,629
Yong Joo Park	Head of ESG	March 25, 2022	March 26, 2024	March 25, 2027	56,860	10,334
Hee Sup Kim	Head of Communication	March 25, 2022	March 26, 2024	March 25, 2027	56,860	7,086
Jung Whan Ahn	Head of Corporate Culture	March 25, 2022	March 26, 2024	March 25, 2027	56,860	8,858
(1)	The stock options granted on March 28, 2023 were cancelled and replaced with PSUs.
---	---
(2)	Two-thirds of the stock options granted to Young Sang Ryu on March 25, 2022 were cancelled and replaced with PSUs.
---	---

Other Equity-based Compensation

PSU Program

Since 2023, we have been granting PSUs to certain of our and our subsidiaries’ directors (including the representative director) and executive officers in order to align management and shareholder interests and further align growth in our enterprise value with management compensation. Future performance targets are set when entering into the relevant stock compensation agreement, and the final number of shares to be received by each grantee, which will be settled out of our treasury shares, will be determined based on the achievement levels of such targets subject to approval by the board of directors. In consideration of the representative director’s role and importance, additional shares of up to 100% of the representative director’s annual salary at the time of the PSU grant may be granted in recognition of his or her outstanding achievements upon satisfaction of certain conditions. The validity of the PSUs, which is subject to a three-year vesting period, is dependent on the grantee meeting a minimum term of incumbency under his or her title until the end of the year in which the PSUs were issued. In 2023, we granted a total of 228,708 PSUs to 194 directors and executive officers.

Stock Appreciation Rights (“SARs”) Program

In 2021 and 2022, we granted SARs to certain of our executive officers as equity compensation. SARs entitle the grantee to receive in cash the product of (a) the difference between the base share price at the time of grant (calculated based on the arithmetic mean of the weighted average of recent share prices) and the base share price after a three-year vesting period (calculated based on the arithmetic mean of the weighted average of recent share prices), and (b) the number of shares of our common stock equal to 100% of a grantee’s annual salary. If the grantee’s employment with us is terminated within two years of the grant date, no such payment is made. If a grantee’s employment with us is terminated at a date between two and three years after the grant date, settlement is made based on the share price on the termination date. The maximum payout is capped at 100% of the grantee’s annual salary at the time of grant. In 2021, we granted a total of 253,081 SARs to 86 executive officers. In 2022, we granted a total of 338,525 SARs to 72 executive officers. In 2023, we did not grant any SARs.

Shareholder Participation Program

Since 2021, pursuant to the Korean Commercial Code, we have been operating the “Shareholder Participation Program” as equity compensation in order to align management and shareholder interests and strengthen commitment to enhance our enterprise value. All of our employees, including the representative director, are eligible to participate in the Shareholder Participation Program, under which we grant treasury shares equal to a portion of a participating employee’s bonus. The participating employee must be employed with us at the time of actual grant and there is no transfer restriction period. In 2021, we granted a total of 366,309 treasury shares (reflecting the effects of the Stock Split) to 1,985 employees. In 2022, we granted a total of 413,080 treasury shares to 2,005 employees. In 2023, we granted a total of 434,088 treasury shares to 1,863 employees.

Stock Grant Program

Since 2021, we have been granting portions of our independent non-executive directors’ remuneration in the form of shares in order to align the interests of our board of directors and shareholders. The number of shares granted, which is in the form of treasury shares, is based on the independent non-executive director’s role and responsibility and our director compensation payment criteria. Transfer of such shares is restricted for three years following initial receipt. In 2021, we granted a total of 1,515 treasury shares (reflecting the effects of the Stock Split) to five independent non-executive directors. In 2022, we granted a total of 5,984 treasury shares to five independent non-executive directors. In 2023, we granted a total of 6,999 treasury shares to five independent non-executive directors.

In addition, in 2021, we awarded a total of 1,531,210 treasury shares to 5,054 employees of SK Telecom in order to enhance our enterprise value and maximize synergies following the Spin-off. The treasury shares were granted to our then-current employees and the transfer of such shares was restricted for six months.

Item 6.C.	Board Practices

For information regarding the expiration of each director’s term of appointment, as well as the period from which each director has served in such capacity, see the table set out under “Item 6.A. Directors and Senior Management” above.

Termination of Directors’ Services

Directors are given a retirement and severance payment upon termination of employment in accordance with our internal regulations on severance payments. Upon retirement, directors who have made significant contributions to our company during their term may be appointed to serve either as an advisor to us or as an officer of an affiliate company.

Audit Committee

Under relevant Korean laws and our articles of incorporation, we are required to have an audit committee under the board of directors. The committee is composed of at least three members, two-thirds of whom must be independent non-executive directors in accordance with applicable rules. The members of the audit committee are appointed annually by a resolution of the general meeting of shareholders. They are required to:

•	examine the agenda for the general meeting of shareholders;
•	examine financial statements and other reports to be submitted by the board of directors to the general meeting of shareholders;
---	---

•	review the administration by the board of directors of our affairs; and
•	examine the operations and asset status of us and our subsidiaries.
---	---

In addition, the audit committee must appoint independent auditors to examine our financial statements. An audit and review of our financial statements by independent auditors is required for the purposes of a securities report. Listed companies must provide such report on an annual, semi-annual and quarterly basis to the FSC and the KRX KOSPI Market.

Our audit committee is composed of four independent non-executive directors: Seok-Dong Kim, Yong-Hak Kim, Haeyun Oh and Mi Kyung Noh, each of whom is financially literate and independent under the rules of the NYSE as applicable. Seok-Dong Kim is the chairman of the committee. The board of directors has determined that Seok-Dong Kim is an “audit committee financial expert” as defined under the applicable rules of the SEC. See “Item 16A. Audit Committee Financial Expert.”

Independent Director Nomination Committee

This committee is devoted to recommending independent non-executive directors for the board of directors. The objective of the committee is to help promote fairness and transparency in the nomination of candidates for these positions. The board of directors decides from time to time who will comprise the members of this committee. The committee is comprised of one non-independent director, Sung Hyung Lee, and three independent directors, Yong-Hak Kim, Haeyun Oh and Junmo Kim. Junmo Kim is the chairman of the committee.

Strategy Committee

This committee is responsible for reviewing our annual business plan as well as establishing our key performance indicators (“KPIs”) and measuring our performance against such KPIs. The committee is comprised of three executive directors, Young Sang Ryu, Jong Ryeol Kang and Yang Seob Kim, one non-independent director, Sung Hyung Lee, and five independent directors, Yong-Hak Kim, Seok-Dong Kim, Junmo Kim, Haeyun Oh and Mi Kyung Noh. Yong-Hak Kim is the chairman of the committee.

Compensation Committee

This committee oversees our overall compensation scheme for the representative director and the non-independent directors. The committee is responsible for reviewing both the criteria for and level of compensation. It is comprised of one non-independent director, Sung Hyung Lee, and three independent directors, Yong-Hak Kim, Seok-Dong Kim and Mi Kyung Noh. Mi Kyung Noh is the chairwoman of the committee.

ESG Committee

This committee is responsible for establishing and reviewing the direction of our environmental, social and governance policy as well as public filings and communications with related parties. This committee was established to help us achieve world-class sustainable growth and to help us fulfill our corporate social responsibilities. It is comprised of one executive director, Jong Ryeol Kang, and three independent directors, Junmo Kim, Haeyun Oh and Mi Kyung Noh. Haeyun Oh is the chairwoman of the committee.

Item 6.D.	Employees

The following table sets forth the numbers of our regular employees, temporary employees and total employees as of the dates indicated:


December 31, 2021	23,457	668	24,125
December 31, 2022	25,099	954	26,053
December 31, 2023	25,103	1,092	26,195

Labor Relations

As of December 31, 2023, SK Telecom had a company union consisting of 2,624 regular employees out of 5,131 total regular employees. We have never experienced a work stoppage of a serious nature. Every two years, the union and management negotiate and enter into a new collective bargaining agreement that has a two-year duration, which is focused on employee benefits and welfare. Employee wages are separately negotiated on an annual basis. Our wage negotiations for 2021 were completed in March 2021 and resulted in an average monthly wage increase of 3.0% for SK Telecom employees. Our wage negotiations for 2022 were completed in May 2022 and resulted in an average monthly wage increase of 5.3% for SK Telecom employees. Our wage negotiations for 2023 were completed in September 2023 and resulted in an average monthly wage increase of 3.0% for SK Telecom employees. We consider our relations with our employees to be good.

Employee Benefits

Since April 1999, we have been required to contribute an amount equal to 4.5% of employee wages toward a national pension plan. Employees are eligible to participate in an employee stock ownership association. We are not required to, and we do not, make any contributions to the employee stock ownership association, although we subsidize the employee stock ownership association through the Employee Welfare Fund by providing low interest rate loans to employees who desire to purchase our stock through the plan in the event of a capitalization by the association.

We are required to pay a severance amount to eligible employees who voluntarily or involuntarily cease employment with us, including through retirement. This severance amount is based upon the employee’s length of service with us and the employee’s salary level at the time of severance. The present value of our defined benefit obligations, which is the present value of total accrued and unpaid retirement and severance benefits for our employees, as of December 31, 2023, was Won 1,121.7 billion, which was more than offset by the fair value of our defined benefit plan assets of Won 1,292.4 billion as of such date. Accordingly, we recognized net defined benefit assets of Won 170.7 billion as of December 31, 2023. Under Korean laws and regulations, we are prevented from involuntarily terminating a full-time employee except under certain limited circumstances. In September 2000, we entered into an employment stabilization agreement with the union. Among other things, in the event that we reorganize a department into a separate entity or we outsource an employee to a separate entity where the wage is lower, this agreement provides for a guarantee of the same wage level for the year that such an event occurs.

Under the Basic Labor Welfare Act, we may also contribute up to 5.0% of our annual earnings before tax for employee welfare. Contribution amounts are determined annually following negotiation with the union. The contribution amount for 2023 was set at 4.58% of SK Telecom’s profit before income tax on a separate basis, or Won 62.0 billion. The contribution amount for 2022 was set at 5.32% of SK Telecom’s profit before income tax on a separate basis, or Won 61.0 billion. The contribution amount for 2021 was set at 4.09% of SK Telecom’s profit before income tax on a separate basis, or Won 56.0 billion.

In addition, we provide our employees with miscellaneous other fringe benefits including medical cost subsidies, family camp programs and sabbatical programs for long-term employees.

Item 6.E.	Share Ownership

The following table sets forth the share ownership by our directors and executive officers as of March 31, 2024:

Name	Position
Directors:
Young Sang Ryu	Executive Director, President and Chief Executive Officer	20,309	*	None	123,760	^(1)^
Jong Ryeol Kang	Executive Director, Head of ICT Infra	8,823	*	None	39,498	^(2)^
Yong-Hak Kim	Independent Non-executive Director	3,358	*	None	—
Seok-Dong Kim	Independent Non-executive Director	2,785	*	None	—
Junmo Kim	Independent Non-executive Director	2,785	*	None	—
Haeyun Oh	Independent Non-executive Director	1,338	*	None	—
Executive Officers:
Hyuncheol Ku	Head of Sales	3,354	*	None	—
Young Sang Kwon	Head of Strategy	3,354	*	None	—
Hai Sung Kwon	Head of MNO AI Platform	2,199	*	None	—
Kyeong Deog Kim	Head of Enterprise Business Division	2,113	*	None	12,000
Dae Sung Kim	Head of Corporate Planning	3,352	*	None	—
Do Youn Kim	Head of Ethics Management	549	*	None	—
Dong Hyun Kim	Head of Brand Comm	5,469	*	None	—
Myoung Gook Kim	Head of Cloud CO	1,474	*	None	—
Sang Bum Kim	Head of Distribution	2,677	*	None	—
Seong Joon Kim	Head of MNO AI Marketing	5,699	*	None	—
Yong Hun Kim	Head of AI Service Business Division	3,334	*	None	12,000
Jung Hoon Kim	Head of IT Infra	4,149	*	None	—
Jiwon Kim	Head of AI Model	3,935	*	None	—
Jee Hyun Kim	Officer of SK Research Institute	1,576	*	None	—
Ji Hyung Kim	Head of Integrated Marketing Strategy	1,957	*	None	—
Ji Hoon Kim	Head of AI Assistant	2,299	*	None	—
Hyuk Kim	Head of Media Business & Alliance	4,010	*	None	12,000
Hogeun Kim	Head of Legal	1,982	*	None	12,000
Hee Sup Kim	Head of Communication	5,714	*	None	19,086
Jung Hwan Ryu	Head of Infra Strategy & Tech CT	5,102	*	None	—
Kap In Moon	Head of Metropolitan Area CP	6,772	*	None	—
Kyu Hyun Park	Head of Digital Communication	4,368	*	None	—
Myung Soon Park	Head of Infra AI/DT	1,294	*	None	—
Yong Joo Park	Head of ESG	9,238	*	None	22,334
Jae Won Bok	Head of Infra Red	1,297	*	None	—
Ji Hwan Suk	Head of Data	2,256	*	None	—
Suk Ham Sung	Head of Policy Cooperation	5,322	*	None	—
Jin Soo Seong	Head of Infra Service CT	8,090	*	None	—
In Hyuk Sohn	Head of GS AIX Development	4,352	*	None	—
Sang Wook Shin	Head of Ad Business	2,427	*	None	—
Yong Sik Shin	Head of Enterprise AI CO	5,313	*	None	—
Jung Whan Ahn	Head of Corporate Culture	3,503	*	None	20,858
Maeng Seog Yang	Head of Metaverse CO	3,550	*	None	—
Seung Hyun Yang	Head of Global Solution Tech	2,667	*	None	—
Jong Hwan Um	Head of ESG Innovation	597	*	None	—

Name	Position
Sung Jin Yeum	Officer of Corporate Culture Department	3,450	*	None	—
Hui Kang Yea	Head of Brand Strategy	5,269	*	None	—
Kyung Sig Oh	Head of Sports Marketing	3,101	*	None	—
Se Hyeon Oh	Head of Web3 CO	2,215	*	None	—
Jae Ho Yoo	Head of Portfolio Management	4,157	*	None	—
Chul Jun Yu	Head of Smart Device Center	928	*	None	—
Sung Eun Yoon	Officer of Communication Team, SUPEX Council Project	1,911	*	None	—
Yong Chul Yoon	Officer of SK Research Institute	303	*	None	—
Jae Woong Yoon	Head of MNO AI Service	2,163	*	None	—
Hyeong Sig Yoon	Head of Infra Customer CT	4,675	*	None	—
Gahp Jae Lee	Head of Region CP	5,716	*	None	—
Kwan Woo Lee	Head of Subscription Development	4,584	*	None	—
Gyu Sik Lee	Head of AI Contact Business	5,801	*	None	—
Ki Yoon Lee	Head of CR	6,171	*	None	—
Dong Kee Lee	Head of Cloud R&D	2,758	*	None	—
Sang Gu Lee	Head of Messaging CO	5,799	*	None	—
Seung Yeoll Lee	Head of PR	3,612	*	None	—
Young Tak Lee	Head of Growth Support	2,890	*	None	—
Jae Shin Lee	Head of AI Growth Strategy	2,563	*	None	—
Jae Joon Lee	Head of SKTA	200	*	None	—
Jung Ryong Lee	Head of Data Platform	2,675	*	None	—
Jong Min Lee	Head of Future R&D	2,987	*	None	—
Jong Hoon Lee	Head of Infra Engineering	1,622	*	None	—
Joon Hyoung Lee	Head of Platform Development	2,369	*	None	—
Hyunwoo Lee	Head of GS AIDC Development	624	*	None	—
Hye Yeon Lee	Head of Change Management	2,021	*	None	—
Bong Ho Lim	Head of Customer Business Division	7,021	*	None	20,858
Jeong Yeon Lim	Head of Media R&D	2,693	*	None	—
Hyun Ki Chang	Head of MNO AIX CT	508	*	None	12,000
Hong Sung Chang	Head of AdTech CO	4,331	*	None	—
Dae Dug Jeong	Head of Finance	3,855	*	None	—
Doh Hee Jung	Head of AI Data	2,530	*	None	—
Jai Hun Jung	Head of Governance & External Affairs	1,518	*	None	—
Jae Hyun Chung	Officer of ICT Advisory Division	303	*	None	—
Chang Kawn Jung	Head of Serious Accident Prevention	3,722	*	None	—
Hui Yong Jeong	Head of GS Business Development	3,014	*	None	—
Dong Hwan Cho	Chief Information Officer	4,221	*	None	30,703
Sang Hyuk Cho	Head of AI Strategic Partnership	3,416	*	None	—
Young Log Cho	Officer of SK Research Institute	5,135	*	None	12,000
Ik Hwan Cho	Head of Metaverse Development	3,824	*	None	—
Hyun Deuk Cho	Head of AI Communication	1,727	*	None	—
Young Hun Chae	Head of Daegu	2,637	*	None	—
Jong Keun Chai	Head of Compliance	7,278	*	None	—
Nag Hun Choi	Head of Connectivity CO	4,004	*	None	—
Yong Jin Choi	Head of Open AIX R&D	3,650	*	None	—
Jai Won Choi	Head of Western Regional CP	2,168	*	None	—

Name	Position
Tae Won Chey	Chairman	303	*	None	—
Hwan Seok Choi	Head of Corporate Strategy	3,540	*	None	—
Myung Bok Ha	Head of Central Regional CP	4,641	*	None	—
Min Yong Ha	Head of Global Solution Office	9,099	*	None	12,000
Sang Dong Han	Head of CR Support	1,520	*	None	—
Sun Kee Hong	Head of Metropolitan Infra	3,984	*	None	—
Seung Tae Hong	Head of Customer Value Innovation	3,590	*	None	—
Jae Man Hwang	Head of HR	891	*	None	—
Davis Eric Hartman	Head of GLM	1,772	*	None	—
Total		342,201	*		361,097
*	Less than 1%.
---	---
(1)	Does not include 25,380 PSUs. See “— Other Equity-based Compensation — PSU Program” above.
---	---
(2)	Does not include 4,400 PSUs. See “— Other Equity-based Compensation — PSU Program” above.
---	---

See “Item 6.B. Compensation” for information regarding the exercisable stock options granted to our directors and executive officers.

Item 6.F.	Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation

Not applicable.

Item 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
Item 7.A.	Major Shareholders
---	---

As of the close of our shareholders’ registry on December 31, 2023, approximately 60.0% of our issued shares were held in Korea by approximately 211,331 shareholders. We estimate that, as of December 31, 2023, there were at least 22,051 record holders of our ADRs evidencing ADSs resident in the United States, and 3,161,929 shares of our common stock were held in the form of ADSs. As of such date, outstanding ADSs represented approximately 6.3% of our outstanding common shares.

The following table sets forth certain information as of December 31, 2023 with respect to any person known to us to be the beneficial owner of more than 5.0% of our common shares:

Shareholder	Number of<br>Shares
SK Inc.		65,668,397	30.0	%	30.9	%
National Pension Service		16,330,409	7.5		7.7
(1)	Calculated based on 218,833,144 total issued shares, which include 6,133,414 treasury shares, as of December 31, 2023.
---	---
(2)	Calculated based on 212,699,730 total outstanding shares as of December 31, 2023.
---	---

The following table sets forth significant changes in the percentage ownership held by our major shareholders during the past three years:

	As of December 31,
Shareholder	2023			2022			2021
	(As a percentage of total issued shares)^(1)^
SK Group(2)		30.0	%		30.0	%		30.0	%
SK Inc.		30.0			30.0			30.0
National Pension Service		7.5			7.7			9.6
(1)	Includes 6,133,414 shares, 801,091 shares and 1,250,992 shares held in treasury as of December 31, 2023, 2022 and 2021, respectively. In 2023, we repurchased 5,773,410 common shares under a share repurchase agreement with SK Securities Co., Ltd., a securities brokerage firm (“SK Securities”), dated July 27, 2023 (the “2023 Share Repurchase Agreement”), and transferred 441,087 treasury shares as bonus payments to certain of our officers and employees. The 2023 Share Repurchase Agreement was terminated on January 26, 2024. In 2022, we transferred 449,901 treasury shares as bonus payments to certain of our officers and employees. In 2021, we repurchased 288,000 common shares under a share repurchase agreement with SK Securities dated August 28, 2020 (the “2020 Share Repurchase Agreement”), and transferred 626,740 treasury shares as bonus payments to certain of our officers and employees, in each case prior to the effectiveness of the Stock Split. The 2020 Share Repurchase Agreement was terminated on April 30, 2021.
---	---
(2)	SK Group’s ownership interest as of December 31, 2023, 2022 and 2021 consisted of the ownership interest of SK Inc. only.
---	---

Except as described above, other than companies in the SK Group, no other persons or entities known by us to be acting in concert, directly or indirectly, jointly or severally, own in excess of 5.0% of our total shares outstanding or exercise control or could exercise control over our business.

As of March 31, 2024, SK Inc. held 30.57% of our total issued shares of common stock. For a description of our foreign ownership limitation, see “Item 3.D. Risk Factors — Risks Relating to Our Business — If SK Inc. causes us to breach the foreign ownership limitations on our common shares, we may experience a change of control.” and “Item 4.B. Business Overview — Law and Regulation — Foreign Ownership and Investment Restrictions and Requirements.” In the event that SK Inc. announces plans of a sale of our shares, we expect to be able to discuss the details of such sale with them in advance and will endeavor to minimize any adverse effects on our share prices as a result of such sale.

As of March 31, 2024, the total number of our common shares outstanding was 212,880,865.

Other than as disclosed herein, there are no other arrangements, to the best of our knowledge, which would result in a material change in the control of us. Our major shareholders do not have different voting rights.

Item 7.B.	Related Party Transactions

We are part of the SK Group of affiliated companies. See “Item 7.A. Major Shareholders.” As disclosed in note 36 of the notes to our consolidated financial statements, we had related party transactions with a number of affiliated companies of the SK Group during the year ended December 31, 2023.

SK Networks

As of December 31, 2023, we had Won 0.1 billion of accounts receivable from SK Networks. As of the same date, we had Won 156.3 billion of accounts payable to SK Networks, mainly relating to payments for wireless devices provided by PS&Marketing. The operating expenses we incurred with respect to SK Networks, including aggregate fees we paid to SK Networks for dealer commissions, amounted to Won 970.7 billion in 2023, Won 904.3 billion in 2022 and Won 1,055.5 billion in 2021.

SK Inc.

We enter into agreements with SK Inc. from time to time for specific information technology-related projects, and we also pay SK Inc. for use of the SK brand. The operating expenses we incurred with respect to SK Inc., including aggregate fees we paid to SK Inc. for such information technology services and the use of the SK brand, amounted to Won 415.2 billion in 2023, Won 389.7 billion in 2022 and Won 385.2 billion in 2021. We also purchase various information technology-related equipment from SK Inc. from time to time. The total amount of such purchases was Won 120.9 billion in 2023, Won 114.9 billion in 2022 and Won 82.2 billion in 2021. We are a party to several service agreements with SK Inc. relating to the development and maintenance of our information technologies systems.

Item 7.C.	Interests of Experts and Counsel

Not applicable.

Item 8.	FINANCIAL INFORMATION
Item 8.A.	Consolidated Statements and Other Financial Information
---	---

See “Item 18. Financial Statements” and pages F-1 through F-134.

Legal Proceedings

KFTC Proceedings

In March 2021, the KFTC imposed a fine of Won 3.2 billion on each of SK Telecom and SK Broadband (which SK Telecom and SK Broadband have paid in full) and issued a correctional order in connection with the payment by SK Telecom of a portion of sales commissions for SK Broadband’s IPTV services in the course of bundling and selling services that combine SK Telecom’s wireless and high-speed wireless Internet services with SK Broadband’s IPTV services in violation of the Fair Trade Act.

In August 2023, the KFTC imposed a fine of Won 16.8 billion, Won 13.9 billion and Won 2.8 billion on SK Telecom (which SK Telecom has paid in full), KT and LG U+, respectively, and issued a correctional order for violating the Act on Fair Labeling and Advertising by engaging in inappropriate and potentially misleading advertising regarding the transmission speeds of their respective 5G wireless services. In August 2023, we initiated an administrative proceeding with the Seoul High Court to request the revocation of the fine and the correctional order, which proceeding currently remains pending.

In January 2024, the KFTC imposed a fine of Won 8.6 billion, Won 5.8 billion, Won 1.4 billion and Won 4.1 billion on KT, LG U+, SK Telecom and SK O&S Co., Ltd., a wholly-owned subsidiary of SK Telecom which engages in the base station maintenance service business, respectively, and issued a correctional order for violating the Fair Trade Act by colluding from 2013 to 2019 to reduce costs for renting locations that house their base stations.

In April 2024, the KFTC notified SK Telecom and the two other major telecommunications providers that it is reviewing potential violations of the Fair Trade Act, including in connection with the sharing of certain customer activation data among these companies. If any violations are found to have occurred, the KFTC may impose penalties including penalty surcharges and corrective measures. It is not possible to predict the final outcome of such matter at this time, and there can be no assurance that the final decision to be made by the KFTC will not adversely affect our business, financial condition and results of operation.

Except as described above, neither we nor any of our subsidiaries are involved in any litigation, arbitration or administrative proceedings relating to claims which may have, or have had during the twelve months preceding the date hereof, a significant effect on our financial position or the financial position of our subsidiaries taken as a whole, and, so far as we are aware, no such litigation, arbitration or administrative proceedings are pending or threatened.

Dividends

Annual dividends, if any, on our outstanding shares must be approved at the annual general meeting of shareholders. This meeting is generally held in March of the following year, and the annual dividend is generally paid shortly after the meeting. Since our shareholders have discretion to declare annual dividends, we cannot give any assurance as to the amount of dividends per share or that any dividends will be declared at all. Interim dividends, if any, could be approved by a resolution of our board of directors. We replaced the interim dividend system with a quarterly dividend system pursuant to an amendment to our articles of incorporation at our annual general meeting of shareholders held on March 25, 2021. Once declared, dividends must be claimed within five years, after which the right to receive the dividends is extinguished and reverted to us.

We pay cash dividends to the ADR depositary in Won. Under the terms of the deposit agreement, cash dividends received by the ADR depositary generally are to be converted by the ADR depositary into Dollars and distributed to the holders of the ADSs, less withholding tax, other governmental charges and the ADR depositary’s fees and expenses. The ADR depositary’s designated bank in Korea must approve this conversion and remittance of cash dividends. See “Item 10.D. Exchange Controls — Korean Foreign Exchange Controls and Securities Regulations.”

The following table sets forth the interim and annual dividend per share and the aggregate total amount of dividends declared, as well as the number of outstanding shares entitled to dividends, with respect to the years ended December 31, 2021, 2022 and 2023. The annual dividend was paid in the immediately following year, and the interim dividends were paid in the same year.

Dividend Type	Dividend<br>per Share		Total Amount<br>of Dividends
	(In Won)		(In billions of Won)
Interim dividend (for the period ended June 30, 2021)	W	2,500	W	177.9	71,160,643
Interim dividend (for the period ended September 30, 2021)		2,500		177.9	71,160,643
Annual dividend (for the year ended December 31, 2021)		1,660		361.2	217,582,152	^(1)^
Interim dividend (for the period ended March 31, 2022)		830		180.9	218,002,830	^(1)^
Interim dividend (for the period ended June 30, 2022)		830		181.0	218,032,053	^(1)^
Interim dividend (for the period ended September 30, 2022)		830		181.0	218,032,053	^(1)^
Annual dividend (for the year ended December 31, 2022)		830		181.0	218,032,053	^(1)^
Interim dividend (for the period ended March 31, 2023)		830		181.3	218,466,141	^(1)^
Interim dividend (for the period ended June 30, 2023)		830		181.3	218,473,140	^(1)^
Interim dividend (for the period ended September 30, 2023)		830		179.6	216,412,898	^(1)^
Annual dividend (for the year ended December 31, 2023)		1,050		223.3	212,699,730	^(1)^
(1)	Reflects the Stock Split, which became effective as of October 28, 2021.
---	---

Holders of non-voting shares are entitled to receive dividends in priority to the holders of common shares. The dividend on the non-voting shares is between 9.0% and 25.0% of the par value as determined by the board of directors at the time of their issuance. If the dividends for common shares exceed the dividends for non-voting shares, the holders of non-voting shares will be entitled to participate in the distribution of such excess amount with the holders of common shares. If the amount available for dividends is less than the aggregate amount of the minimum required dividend, holders of non-voting shares will be entitled to receive such accumulated unpaid dividend from dividends payable in the next fiscal year before holders of common shares. There are no non-voting shares issued or outstanding.

We declare dividends annually at the annual general meeting of shareholders which is generally held within three months after the end of the fiscal year. We pay the annual dividend shortly after the annual general meeting to the shareholders of record or registered pledges as of the end of the preceding fiscal year. We may distribute the annual dividend in cash or in shares. However, a dividend of shares must be distributed at par value. Dividends in shares may not exceed one-half of the annual dividend. Our obligation to pay dividend expires if no claim to dividend is made for five years from the payment date.

Under the Korean Commercial Code, we may pay an annual dividend only out of the excess of our net assets, on a non-consolidated basis, over the sum of (1) our stated capital, (2) the total amount of our capital surplus reserve, (3) legal reserve accumulated up to the end of the relevant dividend period and (4) the increase in our net asset value resulting from the evaluation of our assets and liabilities that has not been offset against unrealized losses. In addition, we may not pay an annual dividend unless we have set aside as a legal reserve an amount equal to at least 10.0% of the cash portion of the annual dividend or until we have accumulated a legal reserve of not less than one-half of our stated capital. We may not use our legal reserve to pay cash dividends but may transfer amounts from our legal reserve to capital stock or use our legal reserve to reduce an accumulated deficit.

In addition, the FSCMA and our articles of incorporation provide that, in addition to annual dividends, we may pay quarterly dividends. Unlike annual dividends, the decision to pay quarterly dividends can be made by a resolution of the board of directors and is not subject to shareholder approval. Any quarterly dividends must be paid in cash to the shareholders of record as of March 31, June 30 or September 30 of the relevant fiscal year.

Under the FSCMA, the total amount of quarterly dividends payable in a fiscal year shall not be more than the net assets on the balance sheet of the immediately preceding fiscal year, after deducting (1) a company’s capital in the immediately preceding fiscal year, (2) the aggregate amount of its capital reserves and legal reserves accumulated up to the immediately preceding fiscal year, (3) the amount of earnings for dividend payments confirmed at the general shareholders’ meeting with respect to the immediately preceding fiscal year and (4) the amount of legal reserve that should be set aside for the current fiscal year following the quarterly dividend payment. Furthermore, the rate of quarterly dividends for non-voting shares must be the same as that for our common shares. In addition, no quarterly dividends can be paid if there is a concern over the net assets of the current fiscal year falling short of the aggregate sum of (1) our stated capital, (2) the total amount of our capital surplus reserve, (3) legal reserve accumulated up to the end of the current fiscal year and (4) the increase in our net asset value resulting from the evaluation of our assets and liabilities that has not been offset against unrealized losses.

Our obligation to pay quarterly dividends expires if no claims to such dividends are made for a period of five years from the payment date.

Item 8.B.	Significant Changes

None.

Item 9.	THE OFFER AND LISTING
Item 9.A.	Offering and Listing Details
---	---

These matters are described under “Item 9.C. Markets” below where relevant.

Item 9.B.	Plan of Distribution

Not applicable.

Item 9.C.	Markets

The principal trading market for our common shares is the KRX KOSPI Market. Our common shares are traded on the KRX KOSPI Market under the identification code 017670. As of March 31, 2024, 212,880,865 shares of our common stock were outstanding.

The ADSs are traded on the NYSE. The ADSs have been issued by the ADR depositary and are traded on the NYSE under the ticker symbol “SKM.” Each ADS represents five-ninths of one share of our common stock. As of March 31, 2024, ADSs representing 13,512,383 shares of our common stock were outstanding.

Item 9.D.	Selling Shareholders

Not applicable.

Item 9.E.	Dilution

Not applicable.

Item 9.F.	Expenses of the Issue

Not applicable.

Item 10.	ADDITIONAL INFORMATION
Item 10.A.	Share Capital
---	---

Not applicable.

Item 10.B.	Memorandum and Articles of Association

Description of Capital Stock

This section provides information relating to our capital stock, including brief summaries of material provisions of our articles of incorporation, the FSCMA, the Korean Commercial Code, the Telecommunications Business Act and related laws of Korea, all as currently in effect. The following summaries are subject to, and are qualified in their entirety by reference to, our articles of incorporation and the applicable provisions of the FSCMA, the Korean Commercial Code and the Telecommunications Business Act. We have filed a copy of our articles of incorporation as an exhibit to our annual reports on Form 20-F.

General

The name of our company is SK Telecom Co., Ltd. We are registered under the laws of Korea under the commercial registry number of 110111-0371346. As specified in Article 2 (Objectives) of our articles of incorporation, as amended, our objectives are the rational management of the telecommunications business, development of telecommunications technology, and contribution to public welfare and convenience. In order to achieve these objectives, we are engaged in the following:

•	information and communication business;
•	sale and lease of subscriber handsets;
---	---
•	new media business;
---	---
•	advertising business;
---	---
•	mail order sales business;
---	---
•	real estate business (development, management and leasing, etc.) and chattel leasing business;
---	---

•	research and technology development relating to the first four items above;
•	overseas and import/export business relating to the first four items above;
---	---
•	manufacture and distribution business relating to the first four items above;
---	---
•	travel business;
---	---
•	electronic financial services business;
---	---
•	film business (production, import, distribution and screening);
---	---
•	lifetime education and management of lifetime educational facilities;
---	---
•	electric engineering business;
---	---
•	information- and communication-related engineering business;
---	---
•	ubiquitous city construction and related service business;
---	---
•	any related business through investment, management and operation of our Korean or offshore subsidiaries and investment companies;
---	---
•	construction business, including the machine and equipment business;
---	---
•	export/import business and export/import intermediation/agency business;
---	---
•	electrical business such as intelligent electrical grid business;
---	---
•	data production, trading and utilization business, including MyData business;
---	---
•	manufacture, import, maintenance, sale and lease of medical equipment and veterinary medical equipment business; and
---	---
•	any business or undertaking incidental or conducive to the attainment of the objectives stated above.
---	---

Currently, our authorized share capital is 670,000,000 shares, which consists of shares of common stock, par value Won 100 per share, and shares of non-voting stock, par value Won 100 per share (common shares and non-voting shares together are referred to as “shares”). Under our articles of incorporation, we are authorized to issue up to 5,500,000 non-voting preferred shares. As of March 31, 2024, 214,790,053 common shares were issued, of which 1,909,188 shares were held by us in treasury. In connection with the Spin-off, we also engaged in the Stock Split, pursuant to which the par value of our common stock changed from Won 500 per share to Won 100 per share and the number of issued shares of our common stock increased from 72,060,143 shares to 360,300,715 shares, in each case effective as of October 28, 2021. In 2021, we repurchased 288,000 common shares under the 2020 Share Repurchase Agreement and transferred 626,740 treasury shares as bonus payments to certain of our officers and employees, in each case prior to the application of the effects of the Stock Split. In 2022, we transferred 449,901 treasury shares as bonus payments to certain of our officers and employees. In 2023, we repurchased 5,773,410 common shares under the 2023 Share Repurchase Agreement and transferred 441,087 treasury shares as bonus payments to certain of our officers and employees. We have never issued any non-voting preferred shares. All of the issued and outstanding common shares are fully-paid and non-assessable and are in registered form.

Board of Directors

Meetings of the board of directors are convened by the representative director as he or she deems necessary or upon the request of three or more directors. The board of directors determines all important matters relating to our business. In addition, the prior approval of the majority of the independent non-executive directors is required for certain matters, which include:

•	investment by us or any of our subsidiaries in a foreign company in equity or acquisition of such foreign company’s other overseas assets in an amount equal to 5.0% or more of our equity under our most recent balance sheet; and

•	contribution of capital, loans or guarantees, acquisition of our subsidiaries’ assets or similar transactions with our affiliated companies in excess of Won 10.0 billion through one or a series of transactions.

Resolutions of the board are adopted in the presence of a majority of the directors in office and by the affirmative vote of a majority of the directors present. No director who has an interest in a matter for resolution may exercise his or her vote upon such matter.

There are no specific shareholding requirements for director’s qualification. Directors are elected at a general meeting of shareholders if the approval of the holders of the majority of the voting shares present at such meeting is obtained and if such majority also represents at least one-fourth of the total number of shares outstanding. Under the Korean Commercial Code, unless otherwise stated in the articles of incorporation, holders of an aggregate of 1.0% or more of the outstanding shares with voting rights may request cumulative voting in any election for two or more directors. Our articles of incorporation do not permit cumulative voting for the election of directors.

The term of office for directors is until the close of the third annual general shareholders meeting convened after he or she commences his or her term. Our directors may serve consecutive terms and our shareholders may remove them from office at any time by a special resolution adopted at a general meeting of shareholders. The total term of office of independent directors may not exceed six years, and when combined with the term of office at our affiliates, may not exceed nine years.

Dividends

We distribute dividends to our shareholders in proportion to the number of shares owned by each shareholder. Our common shares represented by the ADSs have the same dividend rights as other outstanding common shares. For a detailed discussion of our dividend policy, see “Item 8.A. Consolidated Statements and Other Financial Information — Dividends.”

Distribution of Free Shares

In addition to paying dividends in shares out of our retained or current earnings, we may also distribute to our shareholders an amount transferred from our capital surplus or legal reserve to our stated capital in the form of free shares. We must distribute such free shares to all of our shareholders in proportion to their existing shareholdings.

Preemptive Rights and Issuance of Additional Shares

We may at times issue authorized but unissued shares, unless otherwise provided in the Korean Commercial Code, on terms determined by our board of directors. All of our shareholders are generally entitled to subscribe to any newly-issued shares in proportion to their existing shareholdings. We must offer new shares on uniform terms to all shareholders who have preemptive rights and are listed on our shareholders’ registry as of the relevant record date. We must give public notice of the preemptive rights regarding new shares and their transferability at least two weeks before the relevant record date. Our board of directors may determine how to distribute shares for which preemptive rights have not been exercised or where fractions of shares occur.

Under the Korean Commercial Code and our articles of incorporation, we may issue new shares pursuant to a board resolution to persons other than existing shareholders only if (1) the new shares are issued for the purpose of issuing depositary receipts in accordance with the relevant regulations or through an offering to public investors and (2) the purpose of such issuance is deemed necessary by us to achieve a business purpose, including, but not limited to, the introduction of new technology or the improvement of our financial condition. If we make an allotment of new shares to persons other than our existing shareholders, we are required by the Korean Commercial Code to notify our existing shareholders of (a) the class and number of new shares, (b) the

issuance price of new shares and the date set for the payment thereof, (c) in cases of no par value shares, the amount to be included in the paid-up capital out of the issuance price of new shares and (d) the method of subscription to new shares by no later than two weeks before the date of payment of the subscription price, or publicly announce such information. Under our articles of incorporation, only our board of directors is authorized to set the terms and conditions with respect to such issuance of new shares.

In addition, under our articles of incorporation, we may issue convertible bonds or bonds with warrants, each up to an aggregate principal amount of Won 400.0 billion, to persons other than existing shareholders, where such issuance is deemed necessary by us to achieve a business purpose, including, but not limited to, the introduction of new technology or the improvement of our financial condition.

Members of our employee stock ownership association, whether or not they are our shareholders, generally have a preemptive right to subscribe for up to 20.0% of the shares publicly offered pursuant to the FSCMA. This right is exercisable only to the extent that the total number of shares so acquired and held by members of our employee stock ownership association does not exceed 20.0% of the sum of the number of shares then outstanding and the number of newly-issued shares.

General Meeting of Shareholders

We generally hold the annual general meeting of shareholders within three months after the end of each fiscal year. Subject to a board resolution or court approval, we may hold an extraordinary general meeting of shareholders:

•	as necessary;
•	at the request of holders of an aggregate of 3.0% or more of our outstanding common shares;
---	---
•	at the request of shareholders holding an aggregate of 1.5% or more of our outstanding shares and preferred shares for at least six months; or
---	---
•	at the request of our audit committee.
---	---

Holders of non-voting preferred shares may request a general meeting of shareholders only after the non-voting shares become entitled to vote or “enfranchised,” as described under “— Voting Rights” below.

We must give shareholders written notice setting out the date, place and agenda of the meeting at least two weeks before the date of the general meeting of shareholders. However, for holders of less than 1.0% of the total number of issued and outstanding voting shares, we may give notice by placing at least two public notices in at least two daily newspapers at least two weeks in advance of the meeting. Currently, we use The Korea Economic Daily News and Maeil Business Newspaper, both published in Seoul, for this purpose, but we may give notice in the future through electronic means. Shareholders who are not on the shareholders’ registry as of the record date are not entitled to receive notice of the general meeting of shareholders or attend or vote at the meeting. Holders of non-voting preferred shares, unless enfranchised, are not entitled to receive notice of or vote at general meetings of shareholders.

Our general meetings of shareholders have historically been held in or near Seoul.

Voting Rights

Holders of our common shares are entitled to one vote for each common share, except that voting rights of common shares held by us (including treasury shares and shares held by bank trust funds controlled by us), or by a corporate shareholder in which we own more than 10.0% equity interest, either directly or indirectly, may not be exercised. The Korean Commercial Code, unless otherwise stated in the articles of incorporation, permits cumulative voting, which would allow each shareholder to have multiple voting rights corresponding to the

number of directors to be appointed in the voting and to exercise all voting rights cumulatively to elect one director. Our articles of incorporation do not permit cumulative voting for the election of directors.

Our shareholders may adopt resolutions at a general meeting by an affirmative majority vote of the voting shares present or represented at the meeting if such affirmative votes also represent at least one-fourth of our total voting shares then issued and outstanding. However, under the Korean Commercial Code and our articles of incorporation, the following matters, among others, require approval by the holders of at least two-thirds of the voting shares present or represented at a meeting, and such affirmative votes must also represent at least one-third of our total voting shares then issued and outstanding:

•	amending our articles of incorporation;
•	removing a director;
---	---
•	effecting any dissolution, merger or consolidation of us;
---	---
•	transferring the whole or any significant part of our business;
---	---
•	effecting our acquisition of all of the business of any other company or a part of the business of any other company having a material effect on our business;
---	---
•	reducing our capital; or
---	---
•	issuing any new shares at a price lower than their par value.
---	---

In general, holders of non-voting preferred shares are not entitled to vote on any resolution or receive notice of any general meeting of shareholders.

However, in case of amendments to our articles of incorporation, or any merger or consolidation of us, or in some other cases which affect the rights or interests of the non-voting preferred shares, approval of the holders of non-voting preferred shares is required. We may obtain the approval by a resolution of holders of at least two-thirds of the non-voting preferred shares present or represented at a class meeting of the holders of non-voting preferred shares, where the affirmative votes also represent at least one-third of our total issued and outstanding non-voting shares. In addition, if we are unable to pay dividends on non-voting preferred shares as provided in our articles of incorporation, the holders of non-voting shares will become enfranchised and will be entitled to exercise voting rights beginning at the next general meeting of shareholders to be held after the declaration of non-payment of dividends is made until such dividends are paid. The holders of enfranchised non-voting preferred shares will have the same rights as holders of common shares to request, receive notice of, attend and vote at a general meeting of shareholders.

Shareholders may exercise their voting rights by proxy. A shareholder may give proxies only to another shareholder, except that a corporate shareholder may give proxies to its officers or employees.

Holders of ADRs exercise their voting rights through the ADR depositary, an agent of which is the record holder of the underlying common shares. Subject to the provisions of the deposit agreement, ADR holders are entitled to instruct the ADR depositary how to vote our common shares underlying their ADSs.

Limitation on Shareholdings

The Telecommunications Business Act prohibits foreign governments, individuals, and entities (including Korean entities that are deemed foreigners, as discussed below) from owning more than 49.0% of our voting stock, subject to certain exceptions. See “Item 4.B. Business Overview — Foreign Ownership and Investment Restrictions and Requirements.” Korean entities whose largest shareholder is a foreign government or a foreigner (together with any of its related parties) that owns 15.0% or more of such Korean entities’ outstanding voting stock are deemed foreigners. A foreigner who has acquired shares of our voting stock in excess of such limitation may not exercise the voting rights with respect to the shares exceeding such limitation and may be subject to the MSIT’s corrective orders.

Rights of Dissenting Shareholders

Under Financial Investment Services and Capital Market Act, in some limited circumstances, including the transfer of all or a significant part of our business or our merger or consolidation with another company (with certain exceptions), dissenting shareholders have the right to require us to purchase their shares. To exercise this right, shareholders, including holders of non-voting shares, must submit to us a written notice of their intention to dissent before the general meeting of shareholders. Then, within 20 days after the relevant resolution is passed at a meeting, the dissenting shareholders must request us in writing to purchase their shares. We are obligated to purchase the shares of such dissenting shareholders within one month after the expiration of the 20-day period. The purchase price for the shares is required to be determined through negotiation between the dissenting shareholders and us. If we cannot agree on a price through negotiation, the purchase price will be the average of (1) the weighted average of the daily share prices on the KRX KOSPI Market for the two-month period before the date of the adoption of the relevant board resolution, (2) the weighted average of the daily share price on the KRX KOSPI Market for the one month period before the date of the adoption of the relevant resolution and (3) the weighted average of the daily share price on the KRX KOSPI Market for the one week period before the date of the adoption of the relevant resolution. However, a court may determine the purchase price if we or dissenting shareholders do not accept the purchase price.

Registry of Shareholders and Record Dates

Our transfer agent, Kookmin Bank, maintains the register of our shareholders at its office in Seoul, Korea. It records and registers transfers of shares on the register of shareholders.

For the purpose of determining the shareholders who are entitled to stock dividends, we may set a record date with at least two weeks’ prior public notice by a resolution of our board of directors.

Annual Report

When sending a written notice for the general meeting of shareholders, we must attach our annual report prepared under the FSCMA and audit report prepared under the Act on External Audit of Stock Companies. Alternatively, we may inform the shareholders of the annual report and audit report by email or uploading them to our website one week before the general meeting of shareholders. Furthermore, at least one week before the annual general meeting of shareholders, we must make our business reports and audited non-consolidated financial statements available for inspection at our principal office and at all of our branch offices. In addition, copies of business reports, the audited non-consolidated financial statements and any resolutions adopted at the general meeting of shareholders will be available to our shareholders.

Under the FSCMA, we must file with the FSC and the Korea Exchange (1) an annual report within 90 days after the end of our fiscal year, (2) a mid-year report within 45 days after the end of the first six months of our fiscal year and (3) quarterly reports within 45 days after the end of the third month and the ninth month of our fiscal year. Copies of these reports are or will be available for public inspection at the FSC and the Korea Exchange.

Transfer of Shares

Under the Korean Commercial Code and the Act on Electronic Registration of Stocks, Bonds, etc., the transfer of shares is effected by registration on the electronic registration ledger. However, to assert shareholders’ rights against us, the transferee must have his or her name, seal and address registered on our registry of shareholders, maintained by our transfer agent. A non-Korean shareholder may file a sample signature in place of a seal, unless he or she is a citizen of a country with a sealing system similar to that of Korea. In addition, a non-resident shareholder must appoint an agent in Korea authorized to receive notices on his or her behalf and file his or her mailing address in Korea.

Under current Korean regulations, the Korea Securities Depository, foreign exchange banks (including domestic branches of foreign banks), financial investment companies with a dealing, brokerage or collective investment license and internationally recognized custodians may act as agents and provide related services for foreign shareholders. Certain foreign exchange controls and securities regulations apply to the transfer of shares by non-residents or non-Korean citizens. See “Item 10.D. Exchange Controls — Korean Foreign Exchange Controls and Securities Regulations.”

Our transfer agent is Kookmin Bank, located at 24, Gukjegeumyung-ro, Yeongdeungpo-gu, Seoul, Korea.

Restrictions Applicable to Shares

Pursuant to the Telecommunications Business Act, the maximum aggregate foreign shareholding in us is limited to 49.0%. See “Item 4.B. Business Overview — Law and Regulation — Foreign Ownership and Investment Restrictions and Requirements.” In addition, certain foreign exchange controls and securities regulations apply to the acquisition of securities by non-residents or non-Korean citizens. See “Item 10.D. Exchange Controls — Korean Foreign Exchange Controls and Securities Regulations.”

Acquisition of Shares by Us

We may acquire our own shares pursuant to an approval at the general meeting of shareholders, through purchases on the Korea Exchange or a tender offer, or by acquiring the interests in a trust account holding our own shares through agreements with trust companies and asset management companies. The aggregate purchase price for the shares may not exceed the total amount available for distribution as dividends as of the end of the preceding fiscal year less the amount of dividends and mandatory reserves required to be set aside for that fiscal year, subject to certain procedural requirements.

Under the Korean Commercial Code, we may resell or transfer any shares acquired by us to a third party pursuant to an approval by the Board of Directors. In general, corporate entities in which we own a 50.0% or more equity interest may not acquire our common stock. Under the FSCMA, we are subject to certain selling restrictions with respect to the shares acquired by us.

Liquidation Rights

In the event of our liquidation, remaining assets after payment of all debts, liquidation expenses and taxes will be distributed among shareholders in proportion to their shareholdings. Holders of non-voting preferred shares have no preference in liquidation. Holders of debt securities have no preference over other creditors in the event of liquidation.

Item 10.C.	Material Contracts

We have not entered into any material contracts during the two years immediately preceding the date of this annual report, other than in the ordinary course of our business. For information regarding our agreements and transactions with entities affiliated with the SK Group, see “Item 7.B. Related Party Transactions” and note 36 of the notes to our consolidated financial statements. For a description of certain agreements entered into during the past three years related to our capital commitments and obligations, see “Item 5.B. Liquidity and Capital Resources.”

Item 10.D.	Exchange Controls

Korean Foreign Exchange Controls and Securities Regulations

General

The Foreign Exchange Transaction Act and the Presidential Decree and regulations under that Act and Decree, collectively referred to as the Foreign Exchange Transaction Laws, regulate investment in Korean securities by non-residents and issuance of securities outside Korea by Korean companies. Non-residents may invest in Korean securities pursuant to the Foreign Exchange Transaction Laws. The FSC has also adopted, pursuant to its authority under the FSCMA, regulations that restrict investment by foreigners in Korean securities and regulate issuance of securities outside Korea by Korean companies.

Subject to certain limitations, the MOEF has authority to take the following actions under the Foreign Exchange Transaction Laws:

•

if the Government deems it necessary on account of war, armed conflict, natural disaster or grave and sudden and significant changes in domestic or foreign economic circumstances or similar events or circumstances, the MOEF may temporarily suspend performance under any or all foreign exchange transactions, in whole or in part, to which the Foreign Exchange Transaction Laws apply (including suspension of payment and receipt of foreign exchange), impose an obligation to deposit, safe-keep or sell any means of payment to The Bank of Korea, a foreign exchange stabilization fund, certain other governmental agencies or financial companies or impose an obligation on a resident that holds a claim against a non-resident to collect such claim to enable the recovery of the relevant debt back to Korea; and

•

if the Government concludes that the international balance of payments and international financial markets are experiencing or are likely to experience significant disruption or that the movement of capital between Korea and other countries are likely to adversely affect the Won, exchange rate or other macroeconomic policies, the MOEF may take action to require any person who intends to effect or effects a capital transaction to deposit all or a portion of the means of payment acquired in such transactions with The Bank of Korea, a foreign exchange stabilization fund, certain other governmental agencies or financial companies.

---

Under the regulations of the FSC amended on February 4, 2009, (1) if a company listed on the KRX KOSPI Market or a company listed on the KRX KOSDAQ Market has submitted a public disclosure of material matters to a foreign financial investment supervisory authority pursuant to the laws of the foreign jurisdiction, then it must submit a copy of the public disclosure and a Korean translation thereof to the FSC and the Korea Exchange, and (2) if a KRX KOSPI Market-listed company or KRX KOSDAQ Market-listed company is approved for listing on a foreign stock market or determined to be de-listed from the foreign stock market or actually listed on, or de-listed from a foreign stock market, then it must submit a copy of any document, which it submitted to or received from the relevant foreign government, foreign financial investment supervisory authority or the foreign stock market, and a Korean translation thereof to the FSC and the Korea Exchange.

Government Review of Issuances of ADSs

In order for us to issue ADSs in excess of US$50 million, we are required to submit a report to the MOEF with respect to the issuance of the ADSs prior to and after such issuance; provided that such US$50 million threshold amount would be reduced by the aggregate principal amount of any foreign currency loans borrowed, and any securities offered and issued, outside Korea during the one-year period immediately preceding the report’s submission date; provided further that when calculating this principal amount, any borrowing of funds or issuance of securities for the purpose of overseas usage shall be excluded. The MOEF may at its discretion direct us to take necessary measures to avoid exchange rate fluctuation in connection with its acceptance of report of the issuance of the ADSs.

•	Under current Korean laws and regulations, the depositary is required to obtain our prior consent for any proposed deposit of common shares if the number of shares to be deposited in such proposed

<br>deposit exceeds the number of common shares initially deposited by us for the issuance of ADSs (including deposits in connection with the initial and all subsequent issuances of ADSs by us or with our consent and stock dividends or other distributions related to the ADSs).
•	In addition to such restrictions under Korean laws and regulations, there are also restrictions on the deposits of our common shares for issuance of ADSs. Therefore, a holder of ADRs who surrenders ADRs and withdraws shares may not be permitted subsequently to deposit those shares and obtain ADRs.
---	---

We submitted a report to and obtained acceptance thereof by the MOEF for the issuance of ADSs up to an amount corresponding to 24,321,893 common shares. No additional Korean governmental approval is necessary for the issuance of ADSs except that if the total number of our common shares on deposit for conversion into ADSs exceeds 24,321,893 common shares, we may be required to file a report to and obtain acceptance thereof by the MOEF with respect to the increase of such limit and the issuance of additional ADSs.

Reporting Requirements for Holders of Substantial Interests

Under the FSCMA, any person whose direct or beneficial ownership of shares with voting rights, certificates representing the rights to subscribe for shares and equity-related debt securities including convertible bonds and bonds with warrants (collectively referred to as “equity securities”), together with the equity securities beneficially owned by certain related persons or by any person acting in concert with the person, accounts for 5.0% or more of the total outstanding equity securities is required to report the status and purpose (in terms of whether the purpose of shareholding is to affect control over management of the issuer) of the holdings to the FSC and the Korea Exchange within five business days after reaching the 5.0% ownership interest threshold and promptly deliver a copy of such report to the issuer. In addition, any change (1) in the ownership interest subsequent to the report which equals or exceeds 1.0% of the total outstanding equity securities, or (2) in the shareholding purpose is required to be reported to the FSC and the Korea Exchange within five business days from the date of the change. However, the reporting deadline of such reporting requirement is extended for (1) certain professional investors, as specified under the FSCMA, or (2) persons who hold shares for purposes other than management control by up to the tenth day of the month immediately following the last month of the quarter in which the share acquisition or change in their shareholding occurred. Those who reported the purpose of shareholding is to affect control over management of the issuer are prohibited from exercising their voting rights and acquiring additional shares for five days subsequent to the report under the FSCMA.

Violation of these reporting requirements may subject a person to criminal sanctions such as fines or imprisonment and may result in a loss of voting rights with respect to the ownership of unreported equity securities exceeding 5.0%. Furthermore, the FSC may issue an order to dispose of such non-reported equity securities.

In addition to the reporting requirements described above, any person whose direct or beneficial ownership of our common shares accounts for 10.0% or more of the total issued and outstanding shares with voting rights (a “major shareholder”) must report the status of his or her shareholding to the Securities and Futures Commission and the Korea Exchange within five business days after he or she becomes a major shareholder. In addition, any change in the ownership interest subsequent to the report must be reported to the Securities and Futures Commission and the Korea Exchange by the fifth business day of any changes in his or her shareholding. Violations of these reporting requirements may subject a person to criminal sanctions, such as fines or imprisonment.

Furthermore, a major shareholder must report his or her trading plan to the Securities and Futures Commission and the Korea Exchange at least between 30 to 90 days prior to the trading, with the specific timeframe to be determined by the Enforcement Decree of the FSCMA, which is yet to be formally promulgated. According to the related legislative notice, this timeframe is set to be 30 days. The enforcement of such reporting obligations is scheduled to take effect on July 24, 2024.

Restrictions Applicable to ADSs

No Korean governmental approval is necessary for the sale and purchase of ADSs in the secondary market outside Korea or for the withdrawal of shares underlying ADSs and the delivery of shares in Korea in connection with the withdrawal, provided that a foreigner who intends to acquire the shares must obtain an investment registration card from the Financial Supervisory Service of Korea (the “FSS”), as described below. The acquisition of the shares by a foreigner must be reported by the foreigner or his or her standing proxy in Korea immediately to the Governor of the FSS (the “Governor”).

Persons who have acquired shares as a result of the withdrawal of shares underlying the ADSs may exercise their preemptive rights for new shares, participate in free distributions and receive dividends on shares without any further governmental approval.

In addition, we are required to file a securities registration statement with the FSC and such securities registration statement has to become effective pursuant to the FSCMA in order for us to issue shares represented by ADSs, except in certain limited circumstances.

Restrictions Applicable to Shares

As a result of amendments to the Foreign Exchange Transaction Laws and the regulations of the FSC, together referred to as the “Investment Rules,” adopted in connection with the stock market opening from January 1992 and after that date, foreigners may invest, with limited exceptions and subject to procedural requirements, in all shares of Korean companies, whether listed on the KRX KOSPI Market or the KRX KOSDAQ Market, unless prohibited by specific laws. Foreign investors may trade shares listed on the KRX KOSPI Market or the KRX KOSDAQ Market only through the KRX KOSPI Market or the KRX KOSDAQ Market, except in limited circumstances, including, among others:

•	odd-lot trading of shares;
•	acquisition of shares by a foreign company as a result of a merger;
---	---
•	acquisition or disposal of shares in connection with a tender offer;
---	---
•	acquisition of shares by exercise of warrant, conversion right under convertible bonds, exchange right under exchangeable bonds or withdrawal right under depositary receipts issued outside of Korea by a Korean company (“converted shares”);
---	---
•	acquisition of shares through exercise of rights under securities issued outside of Korea;
---	---
•	acquisition of shares as a result of inheritance, donation, bequest or exercise of shareholders’ rights, including preemptive rights or rights to participate in free distributions and receive dividends;
---	---
•	over-the-counter transactions between foreigners of a class of shares for which the ceiling on aggregate acquisition by foreigners, as explained below, has been reached or exceeded;
---	---
•	acquisition of shares by direct investment (including de facto direct investment) under the Foreign Investment Promotion Law;
---	---
•	acquisition and disposal of shares on an overseas stock exchange market, if such shares are simultaneously listed on the KRX KOSPI Market or KRX KOSDAQ Market and such overseas stock exchange;
---	---
•	arm’s length transactions between foreigners in the event all such foreigners belong to an investment group managed by the same person; and
---	---
•	transactions between foreigners outside the securities market and alternative trading systems which do not result in a change in the substantive ownership of the securities.
---	---

For over-the-counter transactions of shares between foreigners outside the KRX KOSPI Market or the KRX KOSDAQ Market for shares with respect to which the limit on aggregate foreign ownership has been reached or exceeded, a financial investment company with a brokerage license in Korea must act as an intermediary. Odd-lot trading of shares outside the KRX KOSPI Market or the KRX KOSDAQ Market must involve a financial investment company with a dealing license in Korea as the other party. Foreign investors are prohibited from engaging in margin transactions through borrowing shares from financial investment companies with respect to shares which are subject to a foreign ownership limit.

The Investment Rules previously required a foreign investor who wished to invest in shares for the first time on the KRX KOSPI Market or the KRX KOSDAQ Market (including converted shares) and shares being publicly offered for initial listing on the KRX KOSPI Market or the KRX KOSDAQ Market to register its identity with the FSS prior to making any such investment. Upon registration, the FSS issued an investment registration certificate (the “IRC”), also referred to as a “foreign investment ID,” to the foreign investor, and the foreign investor was required to present the IRC each time he or she opened a brokerage account with a financial investment company or financial institution in Korea. Foreigners eligible to obtain IRCs included foreign nationals who had not been residing in Korea for a consecutive period of six months or longer, foreign governments, foreign municipal authorities, foreign public institutions, international financial institutions or similar international organizations, corporations incorporated under foreign laws and any person in any additional category designated by decree promulgated under the FSCMA. All Korean offices of a foreign corporation as a group were treated as a separate foreigner from the offices of the corporation outside Korea for the purpose of investment registration.

However, the IRC requirement was abolished on June 13, 2023. Recent amendments to the Investment Rules now permit a foreign investor to trade shares listed on the KRX KOSPI Market or the KRX KOSDAQ Market by providing its Legal Entity Identifier (“LEI”) (in case of corporate entities) or his or her passport number (in case of individuals) to a local securities broker and open a securities account. Foreign investors who have already obtained IRCs can continue to use them for purposes of trading shares listed on the KRX KOSPI Market or the KRX KOSDAQ Market.

If a foreign investor acquires or sells shares outside the KRX KOSPI Market and the KRX KOSDAQ Market, such acquisition or sale of shares must be reported by the foreign investor or such foreign investor’s standing proxy to the Governor at the time of each such acquisition or sale; provided, however, that a foreign investor must ensure that any acquisition or sale of shares outside the KRX KOSPI Market or the KRX KOSDAQ Market in the case of trades in connection with a tender offer, odd-lot trading of shares or trades of a class of shares for which the aggregate foreign ownership limit has been reached or exceeded, is reported to the Governor by the Korea Securities Depository, financial investment companies with a dealing or brokerage license or securities finance companies engaged to facilitate such transaction. In the event a foreign investor desires to acquire or sell shares outside the KRX KOSPI Market or the KRX KOSDAQ Market and the circumstances in connection with such sale or acquisition do not fall within the exceptions made for certain limited circumstances described above, then the foreign investor must obtain the prior approval of the Governor. In addition, in the event a foreign investor acquires or sells shares outside the KRX KOSPI Market or the KRX KOSDAQ Market, a prior report to the Bank of Korea may also be required in certain circumstances. A foreign investor must appoint one or more standing proxies among the Korea Securities Depository, foreign exchange banks (including domestic branches of foreign banks), financial investment companies with a dealing, brokerage or collective investment license and certain eligible foreign custodians which will act as a standing proxy to exercise shareholders’ rights, or perform any matters related to the foregoing activities if the foreign investor does not perform these activities himself. Generally, a foreign investor may not permit any person, other than his, her or its standing proxy, to exercise rights relating to its shares or perform any tasks related thereto on his, her or its behalf. However, a foreign investor may be exempted from complying with these standing proxy rules with the approval of the Governor in cases deemed inevitable by reason of conflict between laws of Korea and the home country of the foreign investor.

Shares of Korean companies must be electronically registered with an eligible custodian in Korea, except in cases where physical security is necessary for the exercise of securities rights or for physical inspections. The Korea Securities Depository, foreign exchange banks (including domestic branches of foreign banks), financial investment companies with a dealing, brokerage or collective investment license and certain eligible foreign custodians are eligible to act as a custodian of shares for a non-resident or foreign investor.

Under the Investment Rules, with certain exceptions, foreign investors may acquire shares of a Korean company without being subject to any foreign investment ceiling. As two such exceptions, designated public corporations are subject to (i) a 40.0% ceiling on the acquisition of shares by foreigners in the aggregate and (ii) unless the corporations’ articles of incorporation set a lower threshold, a 3.0% ceiling on the acquisition of shares by a single foreign individual or entity. Currently, Korea Electric Power Corporation is the only designated public corporation, but it has not set a lower threshold for ownership by a single foreign individual or entity. Furthermore, an investment by a foreign investor of not less than 10.0% of the outstanding shares with voting rights of a Korean company is defined as a direct foreign investment under the Foreign Investment Promotion Law, which is, in general, subject to the report to, and acceptance by, the Ministry of Trade, Industry and Energy of Korea, which delegates its authority to foreign exchange banks or the Korea Trade-Investment Promotion Agency under the relevant regulations. The acquisition of our shares by a foreign investor is also subject to the restrictions prescribed in the Telecommunications Business Act. The Telecommunications Business Act generally limits the maximum aggregate foreign shareholdings in us to 49.0% of the outstanding shares. A foreigner who has acquired shares in excess of such restriction described above may not exercise the voting rights with respect to the shares exceeding such limitations and may be subject to corrective orders.

Under the Foreign Exchange Transaction Laws, a foreign investor who intends to make a portfolio investment in shares of a Korean company listed on the KRX KOSPI Market or the KRX KOSDAQ Market must designate a foreign exchange bank at which he, she or it must open a foreign currency account and a Won account exclusively for stock investments. No approval is required for remittance into Korea and deposit of foreign currency funds in the foreign currency account. Foreign currency funds may be transferred from the foreign currency account at the time required to place a deposit for, or settle the purchase price of, a stock purchase transaction to a Won account opened at a securities company. Funds in the foreign currency account may be remitted abroad without any governmental approval.

Dividends on shares are paid in Won. No governmental approval is required for foreign investors to receive dividends on, or the Won proceeds of the sale of, any such shares to be paid, received and retained in Korea. Dividends paid on, and the Won proceeds of the sale of, any such shares held by a non-resident of Korea must be deposited either in a Won account with the investor’s financial investment companies with a securities dealing, brokerage or collective investment license or the investor’s Won account. Funds in the investor’s Won account may be transferred to such investor’s foreign currency account or withdrawn for local living expenses, provided that any withdrawal of local living expenses in excess of a certain amount is reported to the tax authorities by the foreign exchange bank at which the Won account is maintained. Funds in the investor’s Won account may also be used for future investment in shares or for payment of the subscription price of new shares obtained through the exercise of preemptive rights.

Financial investment companies with a securities dealing, brokerage or collective investment license are allowed to open foreign currency accounts with foreign exchange banks exclusively for accommodating foreign investors’ stock investments in Korea. Through these accounts, these financial investment companies may enter into foreign exchange transactions on a limited basis, such as conversion of foreign currency funds and Won funds, either as a counterparty to or on behalf of foreign investors, without the investors having to open their own accounts with foreign exchange banks.

100

Item 10.E.	Taxation

United States Taxation

This summary describes certain U.S. federal income tax consequences for a U.S. holder (as defined below) of acquiring, owning, and disposing of common shares or ADSs. This summary applies to you only if you hold our common shares or ADSs as capital assets for tax purposes. This summary does not apply to you if you are a member of a class of holders subject to special rules, such as:

•	a dealer in securities or currencies;
•	a trader in securities that elects to use a mark-to-market method of accounting for securities holdings;
---	---
•	a bank or other financial institution;
---	---
•	a life insurance company;
---	---
•	a tax-exempt organization;
---	---
•	a person that holds common shares or ADSs that are a hedge or that are hedged against interest rate or currency risks;
---	---
•	a person that holds common shares or ADSs as part of a straddle or conversion transaction for tax purposes;
---	---
•	a person whose functional currency for tax purposes is not the U.S. dollar;
---	---
•	a person that owns or is deemed to own 10.0% or more of any class of our stock (by vote or value); or
---	---
•	an entity or arrangement that is treated as a partnership for U.S. federal income tax purposes (or partners therein).
---	---

This summary is based on the Internal Revenue Code of 1986, as amended, its legislative history, existing and proposed regulations promulgated thereunder, and published rulings and court decisions, all as currently in effect. These laws are subject to change, possibly on a retroactive basis.

Please consult your own tax advisers concerning the U.S. federal, state, local, and other tax consequences of purchasing, owning, and disposing of common shares or ADSs in your particular circumstances.

For purposes of this summary, you are a “U.S. holder” if you are the beneficial owner of a common share or an ADS and are:

•	a citizen or resident of the United States;
•	a U.S. domestic corporation; or
---	---
•	otherwise subject to U.S. federal income tax on a net income basis with respect to income from the common share or ADS.
---	---

In general, if you are the beneficial owner of ADSs, you will be treated as the beneficial owner of the common shares represented by those ADSs for U.S. federal income tax purposes, and no gain or loss will be recognized if you exchange an ADS for the common share represented by that ADS.

Dividends

The gross amount of cash dividends that you receive (prior to deduction of Korean taxes) generally will be subject to U.S. federal income taxation as foreign source “passive income” dividend income and will not be eligible for the dividends received deduction. Dividends paid in Won will be included in your income in a U.S. dollar amount calculated by reference to the exchange rate in effect on the date of your receipt of the dividend, in the case of common shares, or the depositary’s receipt, in the case of ADSs, regardless of whether

101

the payment is in fact converted into U.S. dollars. If such a dividend is converted into U.S. dollars on the date of receipt, you generally should not be required to recognize foreign currency gain or loss in respect of the dividend income.

Subject to certain exceptions for short-term and hedged positions, the U.S. dollar amount of dividends received by an individual with respect to the ADSs will be subject to taxation at a preferential rate if the dividends are “qualified dividends.” Dividends paid on the ADSs will be treated as qualified dividends if (1) the ADSs are readily tradable on an established securities market in the United States and (2) we were not, in the year prior to the year in which the dividend was paid, and are not, in the year in which the dividend is paid, a PFIC, as discussed below under “ — Passive Foreign Investment Company Rules.” The ADSs are listed on the NYSE, and will qualify as readily tradable on an established securities market in the United States so long as they are so listed. As described below under “Passive Foreign Investment Company Rules,” we do not believe that we were classified as a PFIC with respect to our taxable years ending December 31, 2022 and 2023. We do not expect to be classified as a PFIC for the current taxable year or in the reasonably foreseeable future based on the present composition of our income and assets and our expectations regarding our income and assets in the future. Accordingly, U.S. holders of commons shares or ADSs should consult their own tax advisors regarding the availability of the reduced dividend tax rate for dividends with respect to our common shares or ADSs.

Distributions of additional shares in respect of common shares or ADSs that are made as part of a pro-rata distribution to all of our stockholders generally will not be subject to U.S. federal income tax.

Sale or Other Disposition

Subject to the discussion below under “Passive Foreign Investment Company Rules,” for U.S. federal income tax purposes, gain or loss you realize on a sale or other disposition of common shares or ADSs generally will be treated as U.S. source capital gain or loss, and will be long-term capital gain or loss if the common shares or ADSs were held for more than one year. Your ability to offset capital losses against ordinary income is limited. Long-term capital gain recognized by an individual U.S. holder generally is subject to taxation at reduced rates.

Passive Foreign Investment Company Rules

Special U.S. tax rules apply to companies that are considered to be PFICs. We will be classified as a PFIC in a particular taxable year if either (i) 75 percent or more of our gross income for the taxable year is passive income; or (ii) 50 percent or more of the value of our assets (generally determined on the basis of a quarterly average) is attributable to assets that produce or are held for the production of passive income. Investments in companies in which we own less than 25 percent of the stock (by value) are considered to be assets that produce passive income.

The determination whether we are a PFIC is made annually based on the particular facts and circumstances, such as the composition of our income and the valuation of our assets. We do not believe that we were classified as a PFIC with respect to our taxable years ending December 31, 2022 and 2023. We do not expect to be classified as a PFIC for the current taxable year or in the reasonably foreseeable future, based on the present composition of our income and assets and our expectations regarding our income and assets in the future. Stock market volatility could exacerbate these considerations. See “Item 3.D. Risk Factors — Risks Relating to Korea — Unfavorable financial and economic developments in Korea may have an adverse effect on us.”

You should consult your own tax advisors regarding our classification as a PFIC for 2022, 2023 or in the current or future years.

If we are classified as a PFIC, and you do not make a mark-to-market election, as described in the following paragraph, you will be subject to a special tax at ordinary income tax rates on “excess distributions” (generally, any distributions that you receive in a taxable year that are greater than 125 percent of the average annual

102

distributions that you have received in the preceding three taxable years, or your holding period, if shorter), including gain that you recognize on the sale of your common shares or ADSs. The amount of income tax on any excess distributions will be increased by an interest charge to compensate for tax deferral, calculated as if the excess distributions were earned ratably over the period you hold your common shares or ADSs. Classification as a PFIC may also have other adverse tax consequences, including, in the case of individuals, the denial of a step-up in the basis of your common shares or ADSs at death.

Although the determination of whether we are a PFIC is made annually, if we are a PFIC for any taxable year during which a U.S. holder holds our common shares or ADSs, such U.S. holder will generally be subject to the unfavorable rules described above for that year and for each subsequent year in which such U.S. holder holds the common shares or ADSs (even if we do not qualify as a PFIC in such subsequent years). However, if we cease to be a PFIC, a U.S. holder can avoid the continuing impact of the PFIC rules by making a special election to recognize gain as if such U.S. holder’s common shares or ADSs had been sold on the last day of the last taxable year during which we were a PFIC.

A U.S. holder may be able to avoid the unfavorable rules described above by electing to mark its ADSs to market, provided the ADSs are treated as “marketable stock.” The ADSs generally will be treated as marketable stock if the ADSs are “regularly traded” on a “qualified exchange or other market” (which includes the NYSE). Further, it should also be noted that only the ADSs and not the common shares are listed on the NYSE. Consequently, a U.S. holder that holds common shares that are not represented by ADSs may not be eligible to make a mark-to-market election in respect of those common shares. If the U.S. holder makes a mark-to-market election, the U.S. holder will be required in any year in which we are a PFIC to include as ordinary income the excess of the fair market value of its ADSs at year-end over the U.S. holder’s basis in those ADSs. If at the end of the U.S. holder’s taxable year, the U.S. holder’s basis in the common shares or ADSs exceeds their fair market value, the U.S. holder will be entitled to deduct the excess as an ordinary loss, but only to the extent of the U.S. holder’s net mark-to-market gains from previous years. A U.S. holder’s adjusted tax basis in the ADSs will be increased by the amount of any income inclusion and decreased by the amount of any deductions under the mark-to-market rules. In addition, any gain the U.S. holder recognizes upon the sale of the U.S. holder’s ADSs in a year in which we are a PFIC will be taxed as ordinary income in the year of sale and any loss will be treated as an ordinary loss to the extent of the U.S. holder’s net mark-to-market gains from previous years. If a U.S. holder makes a mark-to-market election, it will be effective for the taxable year for which the election is made and all subsequent taxable years unless the ADSs are no longer regularly traded on a “qualified exchange or other market” or the Internal Revenue Service (“IRS”) consents to the revocation of the election. If a U.S. holder makes a mark-to-market election in respect of a corporation classified as a PFIC and such corporation ceases to be classified as a PFIC, the U.S. holder will not be required to take into account the mark-to-market gain or loss described above during any period that such corporation is not classified as a PFIC. Because a mark-to-market election generally cannot be made for any lower-tier PFICs that we may own (unless shares of such lower-tier PFIC are themselves “marketable”), a U.S. holder who makes a mark-to-market election with respect to our common shares may continue to be subject to the general PFIC rules with respect to such U.S. holder’s indirect interest in any of our non-United States subsidiaries that is classified as a PFIC. U.S. holders are urged to consult their own tax advisors about the availability of the mark-to-market election, the consequences of not making a mark-to-market election for the first year during which a U.S. holder holds interests in our common shares or ADSs and we are a PFIC, and whether making the election would be advisable in their particular circumstances.

Although a U.S. holder can also avoid the unfavorable PFIC rules described above by electing to treat its common shares or ADSs as interests in a qualified electing fund (“QEF”), we do not intend to provide the information that would allow a U.S. holder to make such an election. Accordingly, in the event that we are treated as a PFIC, a U.S. holder will not be able to make a “QEF election.”

A U.S. holder that owns an equity interest in a PFIC must annually file IRS Form 8621, and may be required to file other IRS forms. A failure to file one or more of these forms as required may toll the running of the statute of limitations in respect of each of the U.S. holder’s taxable years for which such form is required to be filed. As

103

a result, the taxable years with respect to which the U.S. holder fails to file the form may remain open to assessment by the IRS indefinitely, until the form is filed.

The U.S. federal income tax rules relating to PFICs are complex. U.S. holders are strongly urged to consult their own tax advisors regarding our potential classification as a PFIC and regarding the U.S. federal income tax consequences of acquiring, holding and disposing of our common shares or ADSs if we are so classified, including the advisability of making a mark-to-market election, if available.

Foreign Tax Credit Considerations

You should consult your own tax advisers to determine whether you are subject to any special rules that limit your ability to make effective use of foreign tax credits, including the possible adverse impact of failing to take advantage of benefits under the income tax treaty between the United States and Korea (the “Treaty”).

Subject to generally applicable limitations and conditions, Korean withholding tax imposed on dividends paid at the appropriate rate applicable to a U.S. holder may be eligible for a credit against such U.S. holder’s U.S. federal income tax liability. These generally applicable limitations and conditions include requirements adopted by the IRS in regulations promulgated in December 2021 and any Korean tax will need to satisfy these requirements in order to be eligible to be a creditable tax for a U.S. holder. In the case of a U.S. holder that consistently elects to apply a modified version of these rules under recently issued temporary guidance, and complies with specific requirements set forth in such guidance, the Korean tax on dividends will be treated as meeting the new requirements and therefore as a creditable tax. In the case of all other U.S. holders, the application of these requirements to the Korean tax on dividends is uncertain and we have not determined whether these requirements are met. If the Korean tax is not a creditable tax for a U.S. holder or the U.S. holder does not elect to claim a foreign tax credit for any foreign income taxes paid or accrued in the same taxable year, the U.S. holder may be able to deduct the Korean tax in computing such U.S. holder’s taxable income for U.S. federal income tax purposes. Dividends will constitute income from sources without the United States and, if such withholding tax is a creditable tax for a U.S. holder that elects to claim foreign tax credits, generally will constitute “passive category income” for foreign tax credit purposes.

Gain, if any, realized by a U.S. holder on the sale or other disposition of the common shares or ADSs generally will be treated as U.S. source income for U.S. foreign tax credit purposes. A U.S. holder that is eligible for, and properly elects, the benefits of the Treaty, will generally not be subject to Korean withholding tax on capital gains. If a U.S. holder is not eligible for benefits under the Treaty and is therefore subject to Korean withholding tax on capital gains, the U.S. holder generally will not be entitled to credit any Korean tax imposed on the sale or other disposition of the shares against such U.S. holder’s U.S. federal income tax liability, except in the case of a U.S. holder that consistently elects to apply a modified version of the U.S. foreign tax credit rules that is permitted under recently issued temporary guidance and complies with the specific requirements set forth in such guidance. Consequently, even if the withholding tax qualifies as a creditable tax, a U.S. holder may not be able to credit the tax against its U.S. federal income tax liability unless such credit can be applied (subject to generally applicable conditions and limitations) against tax due on other income treated as derived from foreign sources. If the Korean tax is not a creditable tax, the tax would reduce the amount realized on the sale or other disposition of the shares even if the U.S. holder has elected to claim a foreign tax credit for other taxes in the same year.

The temporary guidance discussed above also indicates that the U.S. Department of the Treasury and the IRS are considering proposing amendments to the December 2021 regulations and that the temporary guidance can be relied upon until additional guidance is issued that withdraws or modifies the temporary guidance.

Any Korean securities transaction tax or agricultural and fishery special surtax that you pay will not be creditable for foreign tax credit purposes.

The rules with respect to foreign tax credits are complex and U.S. holders should consult their own tax advisors regarding the application of the foreign tax credit rules to their investment in, and disposition of, the common shares or ADSs.

104

Specified Foreign Financial Assets

Certain U.S. holders that own “specified foreign financial assets” with an aggregate value in excess of U.S.$50,000 on the last day of the taxable year or U.S.$75,000 at any time during the taxable year are generally required to file an information statement along with their tax returns, currently on IRS Form 8938, with respect to such assets. “Specified foreign financial assets” include any financial accounts held at a non-U.S. financial institution, as well as securities issued by a non-U.S. issuer (which would include the common shares or ADSs) that are not held in accounts maintained by financial institutions. Higher reporting thresholds apply to certain individuals living abroad and to certain married individuals. Regulations extend this reporting requirement to certain entities that are treated as formed or availed of to hold direct or indirect interests in specified foreign financial assets based on certain objective criteria. U.S. holders who fail to report the required information could be subject to substantial penalties. Prospective investors should consult their own tax advisers concerning the application of these rules to their investment in the common shares or ADSs, including the application of the rules to their particular circumstances.

U.S. Information Reporting and Backup Withholding Rules

Payments of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries are subject to information reporting and may be subject to backup withholding unless the holder (1) is a corporation or other exempt recipient and demonstrates this when required or (2) provides a taxpayer identification number and certifies that no loss of exemption from backup withholding has occurred. Holders that are not a “United States Person” (as defined in the Code) generally are not subject to information reporting or backup withholding. However, such a holder may be required to provide a certification of its non-U.S. status in connection with payments received within the United States or through a U.S.-related financial intermediary.

Korean Taxation

The following is a summary of the principal Korean tax consequences to owners of the common shares or ADSs, as the case may be, who are non-resident individuals or non-Korean corporations without a permanent establishment in Korea to which the relevant income is attributable or with which the relevant income is effectively connected (“Non-resident Holders”). The statements regarding Korean tax laws set forth below are based on the laws in force and as interpreted by the Korean taxation authorities as of the date hereof. This summary is not exhaustive of all possible tax considerations which may apply to a particular investor and potential investors are advised to satisfy themselves as to the overall tax consequences of the acquisition, ownership and disposition of the common shares or ADSs, including specifically the tax consequences under Korean law, the laws of the jurisdiction of which they are resident, and any tax treaty between Korea and their country of residence, by consulting their own tax advisors.

Tax on Dividends

Dividends on the common shares or ADSs paid (whether in cash or in shares) to a Non-resident Holder will be subject to Korean withholding taxes at the rate of 22.0% (including local income tax) or such lower rate as is applicable under a treaty between Korea and such Non-resident Holder’s country of tax residence. Free distributions of shares representing a capitalization of certain capital surplus reserves may be subject to Korean withholding taxes.

The tax is withheld by the payer of the dividend. While it is the payer that is required to withhold the tax, Korean law generally entitles the person who was subject to the withholding of Korean tax to recover from the Government any part of the Korean tax withheld upon providing evidence that it was entitled to have tax withheld at a lower rate if certain conditions are met.

105

Tax on Capital Gains

As a general rule, capital gains earned by Non-resident Holders upon transfer of the common shares or ADSs are subject to Korean withholding tax at the lower of (1) 11.0% (including local income tax) of the gross proceeds realized or (2) 22.0% (including local income tax) of the net realized gains (subject to the production of satisfactory evidence of the acquisition costs and certain direct transaction costs), unless exempt from Korean income taxation under the effective Korean tax treaty with the Non-resident Holder’s country of tax residence.

However, a Non-resident Holder will not be subject to Korean income taxation on capital gains realized upon the sale of the common shares through the KRX KOSPI Market if the Non-resident Holder (1) has no permanent establishment in Korea and (2) did not or has not owned (together with any shares owned by any entity with certain special relationship with such Non-resident Holder) 25.0% or more of the total issued and outstanding shares of us at any time during the calendar year in which the sale occurs and during the five calendar years prior to the calendar year in which the sale occurs.

It should be noted that capital gains earned by you (regardless of whether you have a permanent establishment in Korea) from a transfer of ADSs outside Korea will generally be exempt from Korean income taxation, provided that the ADSs are deemed to have been issued overseas. If and when an owner of the underlying common shares transfers the ADSs following the conversion of the underlying shares for ADSs, such person will not be exempt from Korean income taxation.

Inheritance Tax and Gift Tax

Korean inheritance tax is imposed upon (1) all assets (wherever located) of the deceased if at the time of his death he was a tax resident of Korea and (2) all property located in Korea which passes on death (irrespective of the domicile of the deceased). Gift tax is imposed in similar circumstances to the above. The taxes are imposed if the value of the relevant property is above a certain limit and vary depending on the value of the property and the identity of the parties involved.

Under Korean inheritance and gift tax laws, securities issued by a Korean corporation are deemed to be located in Korea irrespective of where they are physically located or by whom they are owned.

Securities Transaction Tax

Securities transaction tax is imposed on the transfer of shares issued by a Korean corporation or the right to subscribe for such shares generally at the rate of 0.35% of the sales price. In the case of the transfer of shares listed on the KRX KOSPI Market (such as our common shares), the securities transaction tax is imposed generally at the rate of (1) 0.18% of the sales price of such shares (including agricultural and fishery special surtax thereon) if traded on the KRX KOSPI Market or (2) subject to certain exceptions, 0.35% of the sales price of such shares if traded outside the KRX KOSPI Market.

Securities transaction tax or the agricultural and fishery special surtax is not applicable if (1) the shares or rights to subscribe for shares are listed on a designated foreign stock exchange and (2) the sale of the shares takes place on such exchange.

Securities transaction tax, if applicable, must be paid by the transferor of the shares or rights, in principle. When the transfer is effected through a securities settlement company, such settlement company is generally required to withhold and pay (to the tax authority) the tax, and when such transfer is made through a financial investment company with a brokerage license only, such company is required to withhold and pay the tax. Where the transfer is effected by a Non-resident Holder without a permanent establishment in Korea, other than through a securities settlement company or a financial investment company with a brokerage license, the transferee is required to withhold the securities transaction tax. Failure to do so will result in the imposition of penalties equal to the sum of (1) between 10.0% to 40.0% of the tax amount due, depending on the nature of the improper reporting, and (2) 8.03% per annum on the tax amount due for the default period.

106

Tax Treaties

Currently, Korea has income tax treaties with a number of countries, inter alia, Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Italy, Japan, Luxembourg, Ireland, the Netherlands, New Zealand, Norway, Singapore, Sweden, Switzerland, the United Kingdom and the United States under which the rate of withholding tax on dividend and interest is reduced, generally to between 5.0% and 16.5% (including local income tax), and the tax on capital gains derived by a non-resident from the transfer of securities issued by a Korean company is often eliminated.

Each Non-resident Holder of common shares should inquire for itself whether it is entitled to the benefits of a tax treaty with Korea. It is the responsibility of the party claiming the benefits of a tax treaty in respect of interest, dividend, capital gains or “other income” to submit to us (or our agent), the purchaser or the financial investment company with a brokerage license, as the case may be, prior to or at the time of payment, such evidence of tax residence of the party claiming the treaty benefit as the Korean tax authorities may require in support of its claim for treaty protection. In the absence of sufficient proof, we (or our agent), the purchaser or the financial investment company with a brokerage license, as the case may be, must withhold tax at the normal rates.

Furthermore, in order for a non-resident of Korea to obtain the benefits of tax exemption on certain Korean source income (e.g., capital gains and interest) under an applicable tax treaty, Korean tax law requires such non-resident (or its agent) to submit to the payer of such Korean source income an application for a tax exemption along with a certificate of tax residency of such non-resident issued by a competent authority of the non-resident’s country of tax residence, subject to certain exceptions. The payer of such Korean source income, in turn, is required to submit such application to the relevant district tax office by the ninth day of the month following the date of the first payment of such income.

For a non-resident of Korea to obtain the benefits of treaty-reduced tax rates on certain Korean source income (e.g., capital gains and interest) under an applicable tax treaty, Korean tax law requires such non-resident (or its agents) to submit to the payer of such Korean source income an application for treaty-reduced tax rates prior to receipt of such Korean source income; provided, however, that an owner of ADSs who is a non-resident of Korea is not required to submit such application, if the Korean source income on the ADSs is paid through an account opened at the Korea Securities Depository by a foreign depository.

At present, Korea has not entered into any tax treaty relating to inheritance or gift tax.

Item 10.F.	Dividends and Paying Agents

Not applicable.

Item 10.G.	Statements by Experts

Not applicable.

Item 10.H.	Documents on Display

We file reports, including annual reports on Form 20-F, and other information with the SEC pursuant to the rules and regulations of the SEC that apply to foreign private issuers. You may read and copy any materials filed with the SEC at the Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at

1-800-SEC-0330.

Any filings we make electronically will be available to the public over the Internet at the SEC’s Website at www.sec.gov.
Documents filed with annual reports and documents filed or submitted to the SEC are also available for inspection at our principal business office during normal business hours. Our principal business office is located at SK T-Tower, 65, Eulji-ro, Jung-gu, Seoul 04539, Korea.

107

Item 10.I.	Subsidiary Information

Not applicable.

Item 10.J.	Annual Report to Security Holders

Not applicable.

Item 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to foreign exchange rate and interest rate risk primarily associated with underlying liabilities and to equity price risk as a result of our investment in equity instruments.

We have entered into a floating-to-fixed cross currency interest rate swap contract to hedge foreign currency and interest rate risks with respect to US$300 million of bonds issued in March 2020. In addition, we have entered into fixed-to-fixed cross currency swap contracts to hedge the foreign currency risks of US$400 million of bonds issued in July 2007 and US$300 million of bonds issued in June 2023. See note 22 of the notes to our consolidated financial statements. We may consider in the future entering into other such transactions solely for hedging purposes.

The following discussion and tables, which constitute “forward looking statements” that involve risks and uncertainties, summarize our market-sensitive financial instruments including fair value, maturity and contract terms. These tables address market risk only and do not present other risks which we face in the normal course of business, including country risk, credit risk and legal risk.

Exchange Rate Risk

Korea is our main market and, therefore, substantially all of our cash flow is denominated in Won. We are exposed to foreign exchange risk related to foreign currency denominated liabilities. These liabilities relate primarily to foreign currency denominated debt, primarily in Dollars. A 10.0% increase in the exchange rate between the Won and all foreign currencies would result in an increase in profit before income tax of Won 6.3 billion, with a decrease of 10.0% in the exchange rate having the opposite effect, as of December 31, 2023. For a further discussion of our exchange rate risk exposures, see note 35(1) of the notes to our consolidated financial statements.

108

Interest Rate Risk

We are also subject to market risk exposure arising from changing interest rates. The following table summarizes the carrying amounts and fair values, maturity and contract terms of our exchange rate and interest sensitive short-term and long-term liabilities as of December 31, 2023:

	Maturities
	2024			2025			2026			2027			2028			Thereafter			Total		Fair Value
	(In billions of Won, except for percentage data)
Local currency:
Fixed-rate	W	1,569.3		W	1,897.4		W	940.8		W	424.0		W	837.4		W	1,944.5		W	7,613.4	W	7,241.3
Average weighted rate^(1)^		2.28	%		2.90	%		3.18	%		3.46	%		3.87	%		2.55	%
Variable rate		40.0			49.9			—			—			—			—			89.9		89.9
Average weighted rate^(1)^		5.21	%		4.88	%		—			—			—			—
Sub-total		1,609.3			1,947.3			940.8			424.0			837.4			1,944.5			7,703.3		7,331.2
Foreign currency:
Fixed-rate		—			59.2			—			513.1			381.9			—			954.2		1,030.1
Average weighted rate^(1)^		—			—			—			6.63	%		4.88	%		—
Variable rate		—			386.2			—			—			—			—			386.2		386.2
Average weighted rate^(1)^		—			6.55	%		—			—			—			—
Sub-total		—			445.4			—			513.1			381.9			—			1,340.4		1,416.3
Total	W	1,609.3		W	2,392.7		W	940.8		W	937.1		W	1,219.3		W	1,944.5		W	9,043.7	W	8,747.5
(1)	Weighted average rates of the portfolio at the period end.
---	---

A 1.0% point increase in interest rates would result in a decrease in profit before income tax of Won 13.8 billion (consisting of Won 0.9 billion in relation to the floating-rate borrowings for which we have not entered into interest rate swaps and Won 12.9 billion in relation to the floating-rate long-term payables – other that are exposed to interest rate risk) with a 1.0% point decrease in interest rates having the opposite effect, as of December 31, 2023. For a further discussion of our interest rate risk exposures, see note 35(1) of the notes to our consolidated financial statements.

Equity Price Risk

We are also subject to market risk exposure arising from changes in the equity securities market, which affect the fair value of our equity portfolio. As of December 31, 2023, 2022 and 2021, a 10.0% increase in the equity indices where our equity investments at fair value are listed, with all other variables held constant, would have increased our total equity by Won 85.0 billion, Won 77.8 billion and Won 103.2 billion, respectively, with a 10.0% decrease in the equity index having the opposite effect. The foregoing sensitivity analysis assumes that all variables other than changes in the equity index are held constant, and that our equity investments at fair value through other comprehensive income had moved according to the historical correlation to the index, and as such, does not reflect any correlation between the equity index and other variables. For a further discussion of our equity price risk exposures, see note 35(1) of the notes to our consolidated financial statements.

109

Item 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
Item 12.A.	Debt Securities
---	---

Not applicable.

Item 12.B.	Warrants and Rights

Not applicable.

Item 12.C.	Other Securities

Not applicable.

Item 12.D.	American Depositary Shares

Fees and Charges under Deposit Agreement

The ADR depositary will charge the party receiving ADSs up to US$5.00 per 100 ADSs (or fraction thereof), provided that the ADR depositary has agreed to waive such fee as would have been payable by us in the case of (1) an offering of ADSs by us or (2) any distribution of shares of common stock or any rights to subscribe for additional shares of common stock. The ADR depositary will not charge the party to whom ADSs are delivered against deposits. The ADR depositary will charge the party surrendering ADSs for delivery of deposited securities up to US$5.00 per 100 ADSs (or fraction thereof) surrendered. The ADR depositary will also charge the party to whom any cash distribution, or for whom the sale or exercise of rights or other corporate action involving distributions to shareholders, is made with respect to ADSs up to US$0.02 per ADS held plus the expenses of the ADR depositary on a per-ADS basis. We will pay the expenses of the ADR depositary and any entity acting as registrar for the shares only as specified in the deposit agreement. The ADR depositary will pay any other charges and expenses of the ADR depositary and the entity acting as registrar for the shares.

Holders of ADRs must pay (1) taxes and other governmental charges, (2) share transfer registration fees on deposits of shares of common stock, (3) such cable, telex, facsimile transmission and delivery expenses as are expressly provided in the deposit agreement to be at the expense of persons depositing shares of common stock or holders of ADRs and (4) such reasonable expenses as are incurred by the ADR depositary in the conversion of foreign currency into United States dollars.

Notwithstanding any other provision of the deposit agreement, in the event that the ADR depositary determines that any distribution in property (including shares or rights to subscribe therefor or other securities) is subject to any tax or governmental charges which the ADR depositary is obligated to withhold, the ADR depositary may dispose of all or a portion of such property (including shares and rights to subscribe therefor) in such amounts and in such manner as the ADR depositary deems necessary and practicable to pay such taxes or governmental charges, including by public or private sale, and the ADR depositary will distribute the net proceeds of any such sale or the balance of any such property after deduction of such taxes or governmental charges to the holders of ADSs entitled thereto in proportion to the number of ADSs held by them respectively.

All such charges may be changed by agreement between the ADR depositary and us at any time and from time to time, subject to the deposit agreement. The right of the ADR depositary to receive payment of fees, charges and expenses shall survive the termination of this deposit agreement and, as to any depositary, the resignation or removal of such depositary pursuant to the deposit agreement.

Payments made by ADR Depositary

The ADR depositary reimburses us for certain expenses we incur in connection with our ADR program, subject to certain ceilings. These reimbursable expenses currently include expenses relating to the preparation of SEC filings and submissions, listing fees, education and training fees, corporate action expenses and other miscellaneous fees. In the fiscal year 2023, we received US$201,641.87, net of taxes, from the ADR depositary in connection with such reimbursements.

110

PART II

Item 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

Item 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

None.

Item 15.	CONTROLS AND PROCEDURES

Our management has evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of December 31, 2023. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon our evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of such date. Our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that it is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, as of December 31, 2023. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our consolidated financial statements would be prevented or detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework (2013 framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with IFRS, as issued by the IASB. Based on our evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2023.

Report of the Independent Registered Public Accounting Firm on the Effectiveness of Our Internal Control Over Financial Reporting

The report of our independent registered public accounting firm, Ernst & Young Han Young, or E&Y, on the effectiveness of our internal control over financial reporting as of December 31, 2023 is included in Item 18 of this annual report.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting during 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

111

Item 16.	RESERVED
Item 16A.	AUDIT COMMITTEE FINANCIAL EXPERT
---	---

Seok-Dong Kim is the chairman of our audit committee and determined to be an “audit committee financial expert” within the meaning of this Item 16A by the board of directors. The board of directors have further determined that Seok-Dong Kim is independent within the meaning of applicable SEC rules and the listing standards of the NYSE. See “Item 6.C. Board Practices — Audit Committee” for additional information regarding our audit committee.

Item 16B.	CODE OF ETHICS

Code of Ethics for Chief Executive Officer, Chief Financial Officer and Controller

We have a code of ethics that applies to our Chief Executive Officer, Chief Financial Officer, senior accounting officers and employees. We also have internal control and disclosure policy designed to promote full, fair, accurate, timely and understandable disclosure in all of our reports and publicly filed documents. A copy of our code of ethics is available on our website at www.sktelecom.com. If we amend the provisions of our code of ethics that apply to our Chief Executive Officer, Chief Financial Officer and persons performing similar functions, or if we grant any waiver of such provisions, we will disclose such amendment or waiver on our website.

Item 16C.	PRINCIPAL ACCOUNTANT FEES AND SERVICES

The table sets forth the fees we paid to our independent registered public accounting firm E&Y and its affiliates for the years ended December 31, 2023 and 2022:

	Year Ended December 31,
	2023		2022
	(In millions of Won)
Audit Fees	W	4,829	W	4,654
Audit-Related Fees		190		—
Tax Fees		—		26
All Other Fees		—		200
Total	W	5,019	W	4,880

“Audit Fees” are the aggregate fees billed by our independent registered public accounting firm for the audit of our consolidated annual financial statements, reviews of interim financial statements and attestation services that are provided in connection with statutory and regulatory filings or engagements.

“Audit-Related Fees” are fees charged by our independent registered public accounting firm for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit Fees.” This category comprises fees billed for, in 2023, the issuance of comfort letters.

“Tax Fees” are fees for professional services rendered by our independent registered public accounting firm for tax compliance, tax advice on actual or contemplated transactions and tax planning services.

“All Other Fees” are fees billed by our independent registered public accounting firm for the issuance of System and Organization Controls (“SOC”) reports for a subsidiary in 2022.

112

Pre-Approval of Audit and Non-Audit Services Provided by Independent Registered Public Accounting Firm

Our audit committee pre-approves all audit services to be provided by our independent registered public accounting firm. Our audit committee’s policy regarding the pre-approval of non-audit services to be provided to us by our independent auditors is that all such services shall be pre-approved by our audit committee. Non-audit services that are prohibited to be provided to us by our independent auditors under the rules of the SEC and applicable law may not be pre-approved. In addition, prior to the granting of any pre-approval, our audit committee must be satisfied that the performance of the services in question will not compromise the independence of our independent registered public accounting firm.

Our audit committee did not pre-approve any non-audit services under the de minimis exception of Rule 2-01 (c)(7)(i)(C) of Regulation S-X as promulgated by the SEC.

Item 16D.	EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

Item 16E.	PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

The following table sets forth information regarding purchases by us of our common shares during the fiscal year ended December 31, 2023.

Period	Total Number of<br>Shares Purchased^(1)^		Average Price Paid<br>per Share^(2)^			Approximate Value<br>of Shares that May<br>Still Be Purchased<br>Under the Plans or<br>Programs^(3)^
						(In billions of Won)
July 27, 2023 –December 31, 2023		5,773,410	W	49,449	5,773,410	W	15.8
Total		5,773,410	W	49,449	5,773,410	W	15.8
(1)	Repurchases made in the open market pursuant to the 2023 Share Repurchase Agreement, pursuant to which we were authorized to repurchase up to Won 300 billion of our common shares from July 27, 2023 to January 26, 2024.
---	---
(2)	Average price paid per share is a weighted average calculation using the aggregate price, excluding commissions and fees.
---	---
(3)	Remaining under the 2023 Share Repurchase Agreement at the end of the period.
---	---
Item 16F.	CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
---	---

Not applicable.

113

Item 16G.	CORPORATE GOVERNANCE

The following is a summary of the significant differences between the NYSE’s corporate governance standards and those that we follow under Korean law.

NYSE Corporate Governance Standards	Our Corporate Governance Practice
Director Independence
Listed companies must have a majority of independent directors.	Of the nine members of our board of directors, five are independent directors.
Executive Session
Non-management directors must meet in regularly scheduled executive sessions without management. Independent directors should meet alone in an executive session at least once a year.	Our audit committee, which is comprised solely of four independent directors, holds meetings whenever there are matters related to management directors, and such meetings are generally held once every month.
Nomination/Corporate Governance Committee
Listed companies must have a nomination/corporate governance committee composed entirely of independent directors. The committee must have a charter that addresses the purpose, responsibilities (including development of corporate governance guidelines) and annual performance evaluation of the committee.	Although we do not have a separate nomination/corporate governance committee, we maintain an independent director nomination committee composed of one non-independent director and three independent directors.
Compensation Committee
Listed companies must have a compensation committee composed entirely of independent directors. The committee must have a charter that addresses the purpose, responsibilities and annual performance evaluation of the committee. The charter must be made available on the company’s website. In addition, in accordance with the SEC rules adopted pursuant to Section 952 of the Dodd-Frank Act, the NYSE listing standards were amended to expand the factors relevant in determining whether a committee member has a relationship with the company.	We maintain a compensation committee comprised of one non-independent director and three independent directors.
Audit Committee
Listed companies must have an audit committee that satisfies the independence and other requirements of Rule 10A-3 under the Exchange Act. All members must be independent. The committee must have a charter addressing the committee’s purpose, an annual performance evaluation of the committee, and the duties and responsibilities of the committee. The charter must be made available on the company’s website.	We maintain an audit committee comprised solely of four independent directors.
Audit Committee Additional Requirements
Listed companies must have an audit committee that is composed of at least three directors.	Our audit committee has four independent directors.

114

NYSE Corporate Governance Standards	Our Corporate Governance Practice
Shareholder Approval of Equity Compensation Plan
Listed companies must allow its shareholders to exercise their voting rights with respect to any material revision to the company’s equity compensation plan.	We currently have four equity compensation plans or programs: a PSU program for officers and directors, a stock appreciation rights program for officers and directors, a shareholder participation program for employees and a stock grant program for independent directors. We manage such compensation plans and programs in compliance with applicable laws, provided that, under certain circumstances, the grant of equity compensation or matters relating to the foregoing equity compensation programs are not subject to shareholders’ approval under Korean law.
Shareholder Approval of Equity Offerings
Listed companies must allow its shareholders to exercise their voting rights with respect to equity offerings that do not qualify as public offerings for cash, and offerings of equity of related parties.	Pursuant to the Korean Commercial Code and the FSCMA, our shareholders are generally entitled to preemptive rights with respect to the issuance of new shares. Exceptions include public offerings as prescribed in the FSCMA and allotments to third parties in cases necessary for the achievement of a business purpose, such as the introduction of new technology and the improvement of our financial condition.
Corporate Governance Guidelines
Listed companies must adopt and disclose corporate governance guidelines.	We have adopted a Corporate Governance Charter, which is available (in Korean) on our website at www.sktelecom.com. We are also in compliance with the Korean Commercial Code in connection with such matters, including the governance of the board of directors.
Code of Business Conduct and Ethics
Listed companies must adopt and disclose a code of business conduct and ethics for directors, officers and employees and promptly disclose any waivers of the code for directors or executive officers.	We have adopted a Code of Business Conduct and Ethics for all of our directors, officers and employees, and such code is also available on our website at www.sktelecom.com.
Item 16H.	MINE SAFETY DISCLOSURE
---	---

Not applicable.

Item 16I.	DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

Item 16J.	INSIDER TRADING POLICIES

Not applicable.

115

Item 16K.	CYBERSECURITY

Risk Management and Strategy

We maintain a comprehensive process for assessing, identifying and managing material risks from cybersecurity threats as part of our overall risk management system and processes.

We understand the importance of preserving trust and protecting personal and other confidential and sensitive information. Cybersecurity is a critical component of our overall risk management system and we have established an information security and cybersecurity framework to help safeguard the confidentiality, integrity and access of our information assets, and to ensure regulatory, contractual and operational compliance. We utilize policies, software, training programs and hardware solutions to protect and monitor our environment, including multifactor authentication, firewalls, intrusion detection and prevention systems, vulnerability and penetration testing, and identity management systems.

Our information security and cybersecurity framework and infrastructure comply with and incorporate the Information Security Management System (“ISMS”) and Personal Information and Information Security Management System (“ISMS-P”) standards, which significantly overlap with International Organization for Standardizations (“ISO”) standards. Our certifications under such standards are valid for three years, and we are subject to an annual audit to maintain such certifications.

Our Chief Information Security Officer (“CISO”), under the supervision of our board of directors and the ESG Committee, oversees our approach to managing cybersecurity and digital risk and regularly engages with cross-functional teams including legal, human resources, facilities and corporate risk. We also carry insurance that provides protection against potential losses arising from cybersecurity incidents and annually review our policy and levels of coverage based on current risks.

We conduct annual information security awareness training for all directors, officers and employees and enhanced training for specialized personnel, such as personal information handlers, location information handlers and information security managers, and publish periodic cybersecurity newsletters to highlight any emerging or urgent security threats. We also conduct cyber awareness training and run tabletop exercises to simulate responses to cybersecurity incidents, and use the findings to improve our practices, procedures and technologies.

We also engage with a range of external experts, including cybersecurity assessors and consultants, to assess and report on the effectiveness of our cybersecurity and data privacy controls, and our internal incident response preparedness, as well as to help identify areas for continued focus and improvement. In addition, we engage outside legal counsel regarding cybersecurity issues such as regulatory compliance, materiality determinations, disclosure obligations and best practices for oversight, as needed. Since 2006, we have been a member of CONCERT, a Government-sponsored organization which allows members to share best practices, fight cybercrime, enhance privacy, discuss new technologies and better understand the evolving regulatory environment and advance capabilities in these areas.

Our cybersecurity risk management processes extend to the oversight and identification of threats associated with our use of third-party service providers. We review our vendors’ cybersecurity practices before we enter into business transactions with them, and we seek to contractually obligate vendors to operate their environments in accordance with strict cybersecurity standards. We also develop contingency plans for business continuity if our vendors are subject to a cyberattack that impacts our use of their systems. Furthermore, we assess the risks faced by our partners, including branch offices and stores in our extensive distribution network, at least once a year in order to assess risks and identify threats and vulnerabilities, and implement corrective measures. Since 2015, we have been engaging third-party assessors to conduct annual audits of our distribution network and have been conducting remote diagnoses of all personal information-processing personal computers on a weekly basis.

116

Our internal audit department conducts annual audits to review and evaluate the effectiveness of our internal controls relating to information security and disclosure obligations.

Our business, financial condition and results of operations have not been materially affected by risks from cybersecurity threats, including as a result of previous cybersecurity incidents, but we cannot provide assurance that they will not be materially affected in the future by such risks and any future material incidents.

Governance

Management

The cybersecurity risk management processes described above are primarily managed by our CISO, who also serves as our Chief Privacy Officer and has been acting in such role since 2019. Our CISO has more than 20 years of experience in the area of information technology and more than six years of experience in the area of information protection. Our CISO maintains the following internationally recognized certificates: ISO27001, ISO27017 and ISO27018. In order to streamline our information protection and privacy governance regime, we operate an integrated control center led by our CISO to prevent common malicious and abusive Internet activities, such as spam, hacking of personal information, distributed denial-of-service attacks and dissemination of viruses, worms and other destructive or disruptive software, and to respond in real time when a situation arises. We also hold an Information Protection Committee meeting every week under the leadership of our CISO. Furthermore, key executive officers such as our Chief Operating Officer and Chief Serious-accident Prevention Officer manage company-wide information security risks under the leadership of our Chief Executive Officer.

Board of Directors

Our board of directors is committed to mitigating data privacy and cybersecurity risks and recognizes the importance of these issues as part of our risk management framework. While the board of directors, with assistance from the ESG Committee, maintains ultimate responsibility for the oversight of our data privacy and cybersecurity program and risks due to the complexities of the risks involved or the importance of cybersecurity-related risks to stakeholders, it has delegated certain responsibilities to our CISO who heads an execution organization composed of executive officers with relevant experience. In addition, our board of directors receives annual review reports covering the status of the company’s management and protection of personal credit information from our CISO. For information security issues that have a company-wide impact, our board of directors convenes a crisis response situation room to directly engage with and advise our CISO, and the CISO reports to the board of directors the results of work performed based on such advice.

Our board of directors’ principal role is one of oversight, recognizing that management is responsible for the design, implementation and maintenance of an effective program for protecting against and mitigating data privacy and cybersecurity risks. Members of the board of directors stay apprised of the rapidly evolving cyber threat landscape and provide guidance to management as appropriate in order to address the effectiveness of our overall data privacy and cybersecurity program.

117

PART III

Item 17.	FINANCIAL STATEMENTS

Not applicable.

Item 18.	FINANCIAL STATEMENTS
Index to Financial Statements	F-1
---	---
Report of Independent Registered Public Accounting Firm on the Consolidated Financial Statements	F-2
Report of Independent Registered Public Accounting Firm on the Consolidated Financial Statements	F-4
Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting	F-5
Consolidated Statements of Financial Position as of December 31, 2023 and 2022	F-7
Consolidated Statements of Income for the years ended December 31, 2023, 2022 and 2021	F-9
Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2022 and 2021	F-10
Consolidated Statements of Changes in Equity for the years ended December 31, 2023, 2022 and 2021	F-11
Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021	F-14
Notes to the Consolidated Financial Statements	F-16
Financial Statements of SK Hynix (incorporated by reference to Item 18 of the Registrant’s Annual Report on Form 20-F filed on April 28, 2022)
Report of Independent Registered Public Accounting Firm on the Consolidated Financial Statements (incorporated by reference to Item 18 of the Registrant’s Annual Report on Form 20-F filed on April 28, 2022)
Consolidated Statements of Financial Position as of October 31, 2021 and December 31, 2020 (incorporated by reference to Item 18 of the Registrant’s Annual Report on Form 20-F filed on April 28, 2022)
Consolidated Statements of Comprehensive Income for the ten months ended October 31, 2021 and the years ended December 31, 2020 and 2019 (incorporated by reference to Item 18 of the Registrant’s Annual Report on Form 20-F filed on April 28, 2022)
Consolidated Statements of Changes in Equity for the ten months ended October 31, 2021 and the years ended December 31, 2020 and 2019 (incorporated by reference to Item 18 of the Registrant’s Annual Report on Form 20-F filed on April 28, 2022)
Consolidated Statements of Cash Flows for the ten months ended October 31, 2021 and the years ended December 31, 2020 and 2019 (incorporated by reference to Item 18 of the Registrant’s Annual Report on Form 20-F filed on April 28, 2022)
Notes to the Consolidated Financial Statements for the ten months ended October 31, 2021 and the years ended December 31, 2020 and 2019 (incorporated by reference to Item 18 of the Registrant’s Annual Report on Form 20-F filed on April 28, 2022)

118

Item 19.	EXHIBITS
Number	Description
---	---
1.1	Articles of Incorporation
2.1	Deposit Agreement dated as of May 31, 1996, as amended by Amendment No. 1 dated as of March 15, 1999, Amendment No. 2 dated as of April 24, 2000 and Amendment No. 3 dated as of July 24, 2002, entered into among SK Telecom Co., Ltd., Citibank, N.A., as Depositary, and all Holders and Beneficial Owners of American Depositary Shares (incorporated by reference to Exhibit 2.1 to the Registrant’s Annual Report on Form 20-F filed on June 30, 2006)
2.2	Description of Capital Stock (See Item 10.B. Memorandum and Articles of Association)
2.3	Description of American Depositary Shares (incorporated by reference to Exhibit 2.3 to the Registrant’s Annual Report on Form 20-F filed on April 29, 2020)
8.1	List of Subsidiaries of SK Telecom Co., Ltd.
12.1	Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12.2	Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
13.1	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
13.2	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
97.1	SK Telecom Co., Ltd. Policy for the Recovery of Erroneously Awarded Compensation
101.INS	Inline XBRL Instance Document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	The cover page for the Company’s Annual Report on Form 20-F for the year ended December 31, 2023, has been formatted in Inline XBRL

119

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

SK TELECOM CO., LTD.<br> <br>(Registrant)
/s/ Hee Jun Chung
Name:	Hee Jun Chung
Title:	Vice President, Head of IR

Date: April 29, 2024

120

INDEX TO FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm on the Consolidated Financial Statements (as of December 31, 2023 and 2022 and for each of the two years in the period ended December 31, 2023)		F-2
Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements (for the year ended December 31, 2021)		F-4
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting		F-5
Consolidated Statements of Financial Position as of December 31, 2023 and 2022		F-7
Consolidated Statements of Income for the years ended December 31, 2023, 2022 and 2021		F-9
Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2022 and 2021		F-10
Consolidated Statements of Changes in Equity for the years ended December 31, 2023, 2022 and 2021		F-11
Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021		F-14
Notes to the Consolidated Financial Statements		F-16

F-1

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of

SK Telecom Co., Ltd.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statement of financial position of SK Telecom Co., Ltd. and subsidiaries (the “Group”) as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively, the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Group as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Group’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated April 29, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

These consolidated financial statements are the responsibility of the Group’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error of fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosures to which it relates.

F-2

Table of Contents

Impairment assessment of goodwill for the fixed-line telecommunication services cash generating unit

Description of the Matter

At December 31, 2023, the amount of goodwill allocated to the fixed-line telecommunication services CGU is W 764,082 million. As described in notes 3 (10) and 16 of the consolidated financial statements, the Group assesses impairment of goodwill allocated to a cash generating unit (“CGU”), at least, annually or when there is an indication of possible impairment by comparing the carrying amount of the CGU to its recoverable amount based on value-in-use (“VIU”). Auditing management’s evaluation of goodwill impairment for the fixed-line telecommunication services CGU was complex due to the significant judgment involved in the management’s estimates of future operating revenue, perpetual growth rate and discount rate applied in determining the recoverable amount of the fixed-line telecommunication services CGU.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design, and tested the operating effectiveness, of controls over the Group’s goodwill impairment assessment process, including controls over management’s review of the significant assumptions described above. To test the estimated recoverable amount of the Group’s fixed line telecommunication services CGU, we performed audit procedures that included, among others, sensitivity analyses over both the discount rate and the perpetual growth rate used in the discounted cash flow forecast to assess the impact of changes in these assumptions on the Group’s determination of the VIU of the fixed-line telecommunication services CGU. We also assessed the Group’s ability to make accurate forecast by comparing the historical projections with the actual results and evaluated the appropriateness of the estimated operating revenue by comparing it with the financial budgets approved by the Group. In addition, we involved our internal specialists to assist us in evaluating the reasonableness of: (1) the estimated operating revenue and perpetual growth rate by comparing them with telecommunication industry reports as well as the Group’s historical performance; and (2) the discount rate by comparing it with a discount rate that was independently developed using publicly available market data for comparable entities.

/s/ Ernst &Young Han Young

We have served as the Group’s auditor since 2022.

Seoul, the Republic of Korea

April 29, 2024

F-3

Table of Contents

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

SK Telecom Co., Ltd.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statement of income, comprehensive income, changes in equity and cash flows of SK Telecom Co., Ltd. and subsidiaries (the “Group”) for the year ended December 31, 2021, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the results of the Group’s operations and its cash flows for the year ended December 31, 2021, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Spin-off of Semiconductor and New ICT businesses

As described in Note 3 and Note 41, SK Telecom Co., Ltd. completed the spin-off of certain businesses on November 1, 2021. The spin-off company, namely SK Square Co., Ltd., is engaged in managing investments in semiconductor, new Information and Communication Technologies (“ICT”) and making new investments. The spun-off businesses are presented as discontinued operations.

Basis for Opinion

These consolidated financial statements are the responsibility of the Group’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange C o mmission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ KPMG Samjong Accounting Corp.

We served as the Group’s auditor from 2012 to 2021.

Seoul, Korea

April 28, 2022

F-4

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

ON INTERNAL CONTROL OVER FINANCIAL REPORTING

To the Shareholders and Board of Directors of

SK Telecom Co., Ltd.:

Opinion on Internal Control Over Financial Reporting

We have audited SK Telecom Co., Ltd. and subsidiaries (the “Group”)’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, the Group maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statement of financial position of the Group as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”), and our report dated April 29, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

The Group’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Group’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

F-5

Table of Contents

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst &Young Han Young

Seoul, the Republic of Korea

April 29, 2024

F-6

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Consolidated Statements of Financial Position

As of December 31, 2023 and 2022

(In millions of won)		December 31, 2023
Assets
Current Assets:
Cash and cash equivalents	5,34,35	W	1,454,978	1,882,291
Short-term financial instruments	5,34,35		294,934	237,230
Accounts receivable – trade, net	6,34,35,36		1,978,532	1,970,611
Short-term loans, net	6,34,35,36		78,129	78,590
Accounts receivable – other, net	6,34,35,36,37		344,350	479,781
Contract assets	8,35		89,934	83,058
Prepaid expenses	7		1,953,769	1,974,315
Prepaid income taxes	31		161	415
Derivative financial assets	22,34,35,38		8,974	168,527
Inventories, net	9		179,809	166,355
Non-current assets held for sale	40		10,515	6,377
Advanced payments and others	6,34,35		191,517	171,646
			6,585,602	7,219,196
Non-Current Assets:
Long-term financial instruments	5,34,35		375	375
Long-term investment securities	10,34,35		1,679,384	1,410,736
Investments in associates and joint ventures	12		1,915,012	1,889,289
Investment property, net	14		34,812	25,137
Property and equipment, net	13,15,36,37		13,006,196	13,322,492
Goodwill	11,16		2,075,009	2,075,009
Intangible assets, net	17		2,861,137	3,324,910
Long-term contract assets	8,35		39,837	49,163
Long-term loans, net	6,34,35,36		30,455	26,973
Long-term accounts receivable – other, net	6,34,35,36,37		312,531	373,951
Long-term prepaid expenses	7		1,086,107	1,073,422
Guarantee deposits, net	6,34,35,36		156,863	167,441
Long-term derivative financial assets	22,34,35,38		139,560	152,633
Deferred tax assets	31		11,609	6,860
Defined benefit assets	21		170,737	175,748
Other non-current assets	6,34,35		14,001	14,927
			23,533,625	24,089,066
Total Assets		W	30,119,227	31,308,262

(Continued)

F-7

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Consolidated Statements of Financial Position, Continued

As of December 31, 2023 and 2022

(In millions of won)		December 31, 2023
Liabilities and Shareholders’ Equity
Current Liabilities:
Accounts payable – trade	34,35,36	W	139,876		89,255
Accounts payable – other	34,35,36		1,913,006		2,427,906
Withholdings	34,35,36		802,506		803,555
Contract liabilities	8		155,576		172,348
Accrued expenses	26,34,35		1,439,786		1,505,549
Income tax payable	31		142,496		112,358
Provisions	20,39		38,255		39,683
Short-term borrowings	18,34,35,38		—		142,998
Current portion of long-term debt, net	18,34,35,38		1,621,844		1,967,586
Current portion of long-term payables – other	19,34,35,38		367,770		398,874
Lease liabilities	34,35,36,38		372,826		386,429
Liabilities held for sale			39		—
			6,993,980		8,046,541
Non-Current Liabilities:
Debentures, excluding current portion, net	18,34,35,38		7,106,299		6,524,095
Long-term borrowings, excluding current portion, net	18,34,35,38		315,578		668,125
Long-term payables – other	19,34,35,38		892,683		1,239,467
Long-term lease liabilities	34,35,36,38		1,238,607		1,395,628
Long-term contract liabilities	8		56,917		61,574
Defined benefit liabilities	21		—		61
Long-term derivative financial liabilities	22,34,35,38		305,088		302,593
Long-term provisions	20		83,169		79,415
Deferred tax liabilities	31		832,236		763,766
Other non-current liabilities	34,35,36		66,271		71,801
			10,896,848		11,106,525
Total Liabilities			17,890,828		19,153,066
Shareholders’ Equity:
Share capital	1,23		30,493		30,493
Capital surplus and others	11,23,24,26		(12,227,153	)	(11,965,876	)
Hybrid bonds	25		398,509		398,759
Retained earnings	27		22,799,981		22,463,711
Reserves	28		387,216		391,233
Equity attributable to owners of the Parent Company			11,389,046		11,318,320
Non-controlling interests			839,353		836,876
Total Shareholders’ Equity			12,228,399		12,155,196
Total Liabilities and Shareholders’ Equity		W	30,119,227		31,308,262

The accompanying notes are an integral part of the consolidated financial statements .

F-8

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Consolidated Statements of Income

For the years ended December 31, 2023, 2022 and 2021

(In millions of won except for per share data)		2023
Continuing operations
Operating revenue and other income:
Revenue	4,36	W	17,608,511		17,304,973		16,748,585
Other income	4,29,36		50,366		56,259		115,763
			17,658,877		17,361,232		16,864,348
Operating expenses:	36
Labor			2,488,245		2,449,813		2,300,754
Commission	7		5,549,899		5,518,786		5,426,114
Depreciation and amortization	4		3,614,766		3,621,325		3,672,555
Network interconnection			678,459		715,285		749,599
Leased lines			275,477		268,426		310,141
Advertising			235,769		252,402		233,401
Rent			142,356		143,747		140,418
Cost of goods sold			1,266,357		1,268,124		1,167,417
Others	4,29		1,651,273		1,528,976		1,431,587
			15,902,601		15,766,884		15,431,986
Operating profit	4		1,756,276		1,594,348		1,432,362
Finance income	4,30		248,376		179,838		155,133
Finance costs	4,30		(527,401	)	(456,327	)	(315,604	)
Gain (loss) relating to investments in subsidiaries, associates and joint ventures, net	4,12		10,928		(81,707	)	446,300
Profit before income tax	4		1,488,179		1,236,152		1,718,191
Income tax expense	31		342,242		288,321		446,796
Profit from continuing operations			1,145,937		947,831		1,271,395
Profit from discontinued operations, net of taxes	41		—		—		1,147,594
Profit for the year		W	1,145,937		947,831		2,418,989
Attributable to:
Owners of the Parent Company		W	1,093,611		912,400		2,407,523
Non-controlling interests			52,326		35,431		11,466
Earnings per share	32
Basic earnings per share (in won)		W	4,954		4,118		7,191
Basic earnings per share – continuing operations (in won)			4,954		4,118		3,614
Diluted earnings per share (in won)			4,950		4,116		7,187
Diluted earnings per share – continuing operations (in won)			4,950		4,116		3,613

The accompanying notes are an integral part of the consolidated financial statements.

F-9

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2023, 2022 and 2021

(In millions of won)		2023
Profit for the year		W	1,145,937		947,831		2,418,989
Other comprehensive income (loss)
Items that will not be reclassified subsequently to profit or loss, net of taxes:
Remeasurement of defined benefit liabilities (assets)	21		1,853		70,885		16,374
Net change in other comprehensive income of investments in associates and joint ventures	12,28		—		—		4,796
Valuation gain (loss) on financial assets at fair value through other comprehensive income	28,30		(18,842	)	(491,853	)	920,871
Items that are or may be reclassified subsequently to profit or loss, net of taxes:
Net change in other comprehensive income of investments in associates and joint ventures	12,28		9,225		119,707		356,503
Net change in unrealized fair value of derivatives	22,28,30		(17,460	)	(21,366	)	16,133
Foreign currency translation differences for foreign operations	28		1,257		16,401		47,515
Other comprehensive income (loss) for the year, net of taxes			(23,967	)	(306,226	)	1,362,192
Total comprehensive income		W	1,121,970		641,605		3,781,181
Total comprehensive income attributable to:
Owners of the Parent Company		W	1,072,785		601,193		3,473,445
Non-controlling interests			49,185		40,412		307,736

The accompanying notes are an integral part of the consolidated financial statements .

F-10

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Consolidated Statements of Changes in Eq uity

For the years ended December 31, 2023, 2022 and 2021

(In millions of won)	Attributable to owners
	Share capital			Capital surplus<br> (deficit)<br><br> <br>and others			Hybrid<br> bonds		Retained earnings			Reserves			Sub-total
Balance, January 1, 2021	W	44,639			278,444			398,759		22,981,913			40,139			23,743,894		652,349		24,396,243
Total comprehensive income:
Profit for the year		—			—			—		2,407,523			—			2,407,523		11,466		2,418,989
Other comprehensive income (note 12,21,22,28,30)		—			—			—		26,371			1,039,551			1,065,922		296,270		1,362,192
		—			—			—		2,433,894			1,039,551			3,473,445		307,736		3,781,181
Transactions with owners:
Annual dividends (note 33)		—			—			—		(641,944	)		—			(641,944	)	(25,771	)	(667,715	)
Interim dividends (note 33)		—			—			—		(355,804	)		—			(355,804	)	—		(355,804	)
Share option (note 26)		—			75,498			—		—			—			75,498		12,124		87,622
Interest on hybrid bonds (note 25)		—			—			—		(14,766	)		—			(14,766	)	—		(14,766	)
Acquisition of treasury shares (note 24)		—			(76,111	)		—		—			—			(76,111	)	—		(76,111	)
Disposal of treasury shares (note 24)		—			57,017			—		—			—			57,017		—		57,017
Retirement of treasury shares (note 24)		—			1,965,952			—		(1,965,952	)		—			—		—		—
Changes from spin-off (note 41)		(14,146	)		(14,460,588	)		—		—			(344,452	)		(14,819,186	)	(186,211	)	(15,005,397	)
Changes in ownership in subsidiaries, etc. (note 11)		—			137,303			—		—			—			137,303		(4,435	)	132,868
		(14,146	)		(12,300,929	)		—		(2,978,466	)		(344,452	)		(15,637,993	)	(204,293	)	(15,842,286	)
Balance, December 31, 2021	W	30,493			(12,022,485	)		398,759		22,437,341			735,238			11,579,346		755,792		12,335,138

(Continued)

F-11

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Consolidated Statements of Changes in Equity, Continued

For the years ended December 31, 2023, 2022 and 2021

(In millions of won)	Attributable to owners
	Share capital		Capital surplus<br><br> <br>(deficit)<br><br> <br>and others			Hybrid<br><br> <br>bonds		Retained earnings			Reserves			Sub-total
Balance, January 1, 2022	W	30,493		(12,022,485	)		398,759		22,437,341			735,238			11,579,346		755,792	12,335,138
Total comprehensive income (loss):
Profit for the year		—		—			—		912,400			—			912,400		35,431	947,831
Other comprehensive income (loss) (note 12,21,22,28,30)		—		—			—		32,798			(344,005	)		(311,207	)	4,981	(306,226	)
		—		—			—		945,198			(344,005	)		601,193		40,412	641,605
Transactions with owners:
Annual dividends (note 33)		—		—			—		(361,186	)		—			(361,186	)	—	(361,186	)
Interim dividends (note 33)		—		—			—		(542,876	)		—			(542,876	)	—	(542,876	)
Share option (note 26)		—		72,261			—		—			—			72,261		—	72,261
Interest on hybrid bonds (note 25)		—		—			—		(14,766	)		—			(14,766	)	—	(14,766	)
Transactions of treasury shares (note 24)		—		(2,683	)		—		—			—			(2,683	)	—	(2,683	)
Changes in ownership in subsidiaries, etc. (note 11)		—		(12,969	)		—		—			—			(12,969	)	40,672	27,703
		—		56,609			—		(918,828	)		—			(862,219	)	40,672	(821,547	)
Balance, December 31, 2022	W	30,493		(11,965,876	)		398,759		22,463,711			391,233			11,318,320		836,876	12,155,196

(Continued)

F-12

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Consolidated Statements of Changes in Equity, Continued

For the years ended December 31, 2023, 2022 and 2021

(In millions of won)	Attributable to owners
	Share capital		Capital surplus<br><br> <br>(deficit)<br><br> <br>and others			Hybrid<br><br> <br>bonds			Retained earnings			Reserves			Sub-total
Balance, January 1, 2023	W	30,493		(11,965,876	)		398,759			22,463,711			391,233			11,318,320		836,876		12,155,196
Total comprehensive income (loss):
Profit for the year		—		—			—			1,093,611			—			1,093,611		52,326		1,145,937
Other comprehensive income (loss) (note 12,21,22,28,30)		—		—			—			(16,809	)		(4,017	)		(20,826	)	(3,141	)	(23,967	)
		—		—			—			1,076,802			(4,017	)		1,072,785		49,185		1,121,970
Transactions with owners:
Annual dividends (note 33)		—		—			—			(180,967	)		—			(180,967	)	(50,557	)	(231,524	)
Interim dividends (note 33)		—		—			—			(542,282	)		—			(542,282	)	—		(542,282	)
Share option (note 26)		—		7,157			—			—			—			7,157		10,463		17,620
Interest on hybrid bonds (note 25)		—		—			—			(17,283	)		—			(17,283	)	—		(17,283	)
Redemption of hybrid bonds (note 25)		—		(1,241	)		(398,759	)		—			—			(400,000	)	—		(400,000	)
Issuance of hybrid bonds (note 25)		—		—			398,509			—			—			398,509		—		398,509
Transactions of treasury shares (note 24)		—		(265,120	)		—			—			—			(265,120	)	—		(265,120	)
Changes in ownership in subsidiaries, etc. (note 11)		—		(2,073	)		—			—			—			(2,073	)	(6,614	)	(8,687	)
		—		(261,277	)		(250	)		(740,532	)		—			(1,002,059	)	(46,708	)	(1,048,767	)
Balance, December 31, 2023	W	30,493		(12,227,153	)		398,509			22,799,981			387,216			11,389,046		839,353		12,228,399

The accompanying notes are an integral part of the consolidated financial statements .

F-13

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Consolidated Statements of Cash Flows

For the years ended December 31, 2023, 2022 and 2021

(In millions of won)		2023
Cash flows from operating activities:
Cash generated from operating activities:
Profit for the year		W	1,145,937		947,831		2,418,989
Adjustments for income and expenses	38		4,546,338		4,719,438		3,473,779
Changes in assets and liabilities related to operating activities	38		(274,163	)	118,106		(568,695	)
			5,418,112		5,785,375		5,324,073
Interest received			60,134		52,163		37,403
Dividends received			50,899		16,388		327,906
Interest paid			(341,488	)	(259,719	)	(306,634	)
Income tax paid			(240,452	)	(434,890	)	(351,469	)
Net cash provided by operating activities			4,947,205		5,159,317		5,031,279
Cash flows from investing activities:
Cash inflows from investing activities:
Decrease in short-term financial instruments, net			—		264,693		162,565
Decrease in short-term investment securities, net			—		5,010		32,544
Collection of short-term loans			136,242		123,700		137,196
Decrease in long-term financial instruments			—		330,032		343
Proceeds from disposals of long-term investment securities			100,817		104,190		78,261
Proceeds from disposals of investments in associates and joint ventures			4,950		342,645		100,634
Proceeds from disposals of assets held for sale			1,353		20,136		—
Proceeds from disposals of property and equipment			12,900		15,792		61,425
Proceeds from disposals of intangible assets			4,428		10,993		14,618
Collection of long-term loans			1,547		1,134		4,166
Decrease in deposits			5,922		10,056		6,941
Proceeds from settlement of derivatives			1,452		1,542		1,495
Government grants received			2,967		—		—
			272,578		1,229,923		600,188
Cash outflows for investing activities:
Increase in short-term financial instruments, net			(51,421	)	—		—
Increase in short-term loans			(130,041	)	(127,263	)	(100,209	)
Increase in long-term loans			(11,602	)	(11,724	)	(9,877	)
Increase in long-term financial instruments			—		(330,032	)	(21	)
Acquisitions of long-term investment securities			(324,997	)	(436,753	)	(286,566	)
Acquisitions of investments in associates and joint ventures			(17,656	)	(11,065	)	(222,765	)
Acquisitions of property and equipment			(2,973,882	)	(2,908,287	)	(2,915,851	)
Acquisitions of intangible assets			(106,761	)	(138,136	)	(392,588	)
Increase in deposits			(6,848	)	(12,146	)	(51,274	)
Cash decrease due to changes in consolidation scope			(2,275	)	—		—
Cash outflow for business combinations, net			—		(62,312	)	(107,226	)
			(3,625,483	)	(4,037,718	)	(4,086,377	)
Net cash used in investing activities		W	(3,352,905	)	(2,807,795	)	(3,486,189	)

(Continued)

F-14

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Consolidated Statements of Cash Flows, Continued

For the years ended December 31, 2023, 2022 and 2021

(In millions of won)		2023
Cash flows from financing activities:
Cash inflows from financing activities:
Proceeds from short-term borrowings, net		W	—		130,000		—
Proceeds from issuance of debentures			1,785,108		1,200,122		873,245
Proceeds from long-term borrowings			49,950		440,000		350,000
Proceeds from issuance of hybrid bonds			398,509		—		—
Increase in financial liabilities at FVTPL			—		—		129,123
Cash inflows from settlement of derivatives			183,090		768		332
Transactions with non-controlling shareholders			160		31,151		444,124
			2,416,817		1,802,041		1,796,824
Cash outflows for financing activities:
Repayments of short-term borrowings, net			(142,998	)	—		(50,823	)
Repayments of long-term payables – other			(400,245	)	(400,245	)	(426,267	)
Repayments of debentures			(1,869,190	)	(1,390,000	)	(890,000	)
Repayments of long-term borrowings			(125,000	)	(41,471	)	(286,868	)
Redemption of hybrid bonds			(400,000	)	—		—
Payments of dividends			(773,806	)	(904,020	)	(1,028,520	)
Payments of interest on hybrid bonds			(17,283	)	(14,766	)	(14,766	)
Repayments of lease liabilities			(402,465	)	(401,054	)	(431,674	)
Acquisition of treasury shares			(285,487	)	—		(76,111	)
Cash outflows resulting from spin-off			—		—		(626,000	)
Transactions with non-controlling shareholders			(21,333	)	(367	)	(19,406	)
			(4,437,807	)	(3,151,923	)	(3,850,435	)
Net cash used in financing activities	38		(2,020,990	)	(1,349,882	)	(2,053,611	)
Net increase (decrease) in cash and cash equivalents			(426,690	)	1,001,640		(508,521	)
Cash and cash equivalents at beginning of the year			1,882,291		872,731		1,369,653
Effects of exchange rate changes on cash and cash equivalents			(623	)	7,920		11,599
Cash and cash equivalents at end of the year		W	1,454,978		1,882,291		872,731

The accompanying notes are an integral part of the interim consolidated financial statements.

F-15

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

1.	Reporting Entity
(1)	General
---	---

SK Telecom Co., Ltd. (the “Parent Company”) was incorporated on March 29, 1984, under the laws of the Republic of Korea (“Korea”) to provide cellular telephone communication services in Korea. The head office of the Parent Company is located at 65, Eulji-ro, Jung-gu, Seoul, Korea.

The Parent Company’s common shares are listed on the Stock Market of Korea Exchange, and its depositary receipts (DRs) are listed on the New York Stock Exchange. Meanwhile, the Board of Directors of the Parent Company resolved to cancel the listing of the Parent Company’s DRs on the London Stock Exchange on June 22, 2023, and the DRs were delisted from the London Stock Exchange as of July 31, 2023. As of December 31, 2023, the Parent Company’s total issued shares are held by the following shareholders:

	Number of shares				Percentage of total<br> shares issued (%)
	2023		2022		2023		2022
SK Inc.		65,668,397		65,668,397		30.01		30.01
National Pension Service		16,330,409		16,846,066		7.46		7.69
Institutional investors and other shareholders		126,854,437		131,671,103		57.97		60.17
Kakao Investment Co., Ltd.		3,846,487		3,846,487		1.76		1.76
Treasury shares		6,133,414		801,091		2.80		0.37
		218,833,144		218,833,144		100.00		100.00

These consolidated financial statements comprise the Parent Company and its subsidiaries (collectively referred to as the “Group”). SK Inc. is the ultimate controlling entity of the Parent Company.

On November 1, 2021, the date of spin-off, the Parent Company completed the spin-off of its business of managing investments in semiconductor, New Information and Communication Technologies(“ICT”) and other business and making new investments (See note 41).

(2)	List of consolidated subsidiaries

The list of consolidated subsidiaries as of December 31, 2023 and 2022 is as follows:

				Ownership (%)(*1)
Subsidiary		Location	Primary business	Dec. 31,<br> 2023		Dec. 31,<br> 2022
Subsidiaries owned by the Parent Company	SK Telink Co., Ltd.	Korea	International telecommunication and Mobile Virtual Network Operator service		100.0		100.0
	SK Communications Co., Ltd.	Korea	Internet website services		100.0		100.0
	SK Broadband Co., Ltd.	Korea	Fixed-line telecommunication services		74.4		74.4
	PS&Marketing Corporation	Korea	Communications device retail business		100.0		100.0
	SERVICE ACE Co., Ltd.	Korea	Call center management service		100.0		100.0
	SERVICE TOP Co., Ltd.	Korea	Call center management service		100.0		100.0
	SK O&S Co., Ltd.	Korea	Base station maintenance service		100.0		100.0
	SK Telecom China Holdings Co., Ltd.	China	Investment (Holdings company)		100.0		100.0

F-16

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

1.	Reporting Entity, Continued
(2)	List of consolidated subsidiaries, Continued
---	---

The list of consolidated subsidiaries as of December 31, 2023 and 2022 is as follows, Continued:

				Ownership (%)(*1)
Subsidiary		Location	Primary business	Dec. 31,<br> 2023		Dec. 31,<br> 2022
	SK Global Healthcare Business Group Ltd.	Hong Kong	Investment		100.0		100.0
	YTK Investment Ltd.	Cayman Islands	Investment		100.0		100.0
	Atlas Investment	Cayman Islands	Investment		100.0		100.0
	SK Telecom Americas, Inc.	USA	Information gathering and consulting		100.0		100.0
	Quantum Innovation Fund I	Korea	Investment		59.9		59.9
	SK Telecom Japan Inc.(*2)	Japan	Information gathering and consulting		33.0		100.0
	Happy Hanool Co., Ltd.	Korea	Service		100.0		100.0
	SK stoa Co., Ltd.	Korea	Other telecommunication retail business		100.0		100.0
	SAPEON Inc.	USA	Manufacturing non-memory and other electronic integrated circuits		62.5		62.5
Subsidiaries owned by SK Broadband Co., Ltd.	Home & Service Co., Ltd.	Korea	Operation of information and communication facility		100.0		100.0
	Media S Co., Ltd.	Korea	Production and supply services of broadcasting programs		100.0		100.0
Subsidiary owned by PS&Marketing Corporation	SK m&service Co., Ltd.	Korea	Database and Internet website service		100.0		100.0
Subsidiary owned by SK Telecom Americas, Inc.	Global AI Platform Corporation(*2)	USA	Software development and supply business		100.0		—
Subsidiary owned by Global AI Platform Corporation	Global AI Platform Corporation Korea(*2)	Korea	Software development and supply business		100.0		—
Subsidiary owned by Quantum Innovation Fund I	PanAsia Semiconductor Materials LLC.	Korea	Investment		66.4		66.4
Subsidiary owned by SK Telecom Japan Inc.	SK Planet Japan, K. K.(*2)	Japan	Digital contents sourcing service		79.8		79.8
Subsidiary owned by SAPEON Inc.	SAPEON Korea Inc.	Korea	Manufacturing non-memory and other electronic integrated circuits		100.0		100.0
Others(*3)	SK Telecom Innovation Fund, L.P.	USA	Investment		100.0		100.0
	SK Telecom China Fund I L.P.	Cayman Islands	Investment		100.0		100.0
(*1)	The ownership interest represents direct ownership interest in subsidiaries either by the Parent Company or subsidiaries of the Parent Company.
---	---
(*2)	Details of changes in the consolidation scope for year ended December 31, 2023 are presented in note 1-(4).
---	---
(*3)	Others are owned by Atlas Investment and another subsidiary of the Parent Company.
---	---

F-17

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

1.	Reporting Entity, Continued
(3)	Condensed financial information of subsidiaries
---	---
1)	Condensed financial information of significant consolidated subsidiaries as of and for the year ended December 31, 2023 is as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---	---	---	---
	As of December 31, 2023						2023
Subsidiary	Total assets		Total liabilities		Total equity		Revenue		Profit (loss)
SK Telink Co., Ltd.	W	213,920		65,049		148,871		309,091		17,761
SK Broadband Co., Ltd.		6,442,611		3,323,156		3,119,455		4,281,932		213,905
PS&Marketing Corporation		451,549		224,042		227,507		1,353,321		4,681
SERVICE ACE Co., Ltd.		83,395		54,888		28,507		197,598		2,822
SERVICE TOP Co., Ltd.		71,196		47,641		23,555		178,423		1,738
SK O&S Co., Ltd.		140,942		98,346		42,596		345,617		2,614
Home & Service Co., Ltd.		165,667		112,025		53,642		490,094		1,297
SK stoa Co., Ltd.		94,041		37,253		56,788		301,496		(1,427	)
SK m&service Co., Ltd.		153,660		88,195		65,465		247,479		1,253
2)	Condensed financial information of significant consolidated subsidiaries as of and for the year ended December 31, 2022 is as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---	---	---	---
	As of December 31, 2022						2022
Subsidiary	Total assets		Total liabilities		Total equity		Revenue		Profit (loss)
SK Telink Co., Ltd.	W	196,281		60,927		135,354		302,595		15,008
SK Broadband Co., Ltd.		6,245,484		3,134,949		3,110,535		4,162,093		212,816
PS&Marketing Corporation		403,030		177,739		225,291		1,376,400		3,856
SERVICE ACE Co., Ltd.		97,597		59,189		38,408		194,798		2,429
SERVICE TOP Co., Ltd.		81,590		53,589		28,001		179,365		1,613
SK O&S Co., Ltd.		121,755		70,280		51,475		331,715		2,059
Home & Service Co., Ltd.		158,248		102,184		56,064		413,259		(1,217	)
SK stoa Co., Ltd.		103,910		44,696		59,214		329,304		9,977
SK m&service Co., Ltd.(*)		160,704		95,263		65,441		211,081		4,157
(*)	The financial information is the condensed financial information after the entity was included in the scope of consolidation.
---	---

F-18

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

1.	Reporting Entity, Continued
(3)	Condensed financial information of subsidiaries. Continued
---	---
3)	Condensed financial information of the significant consolidated subsidiaries as of and for the year ended December 31, 2021 is as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---	---	---
	As of December 31, 2021						2021
Subsidiary	Total assets		Total liabilities		Total equity		Revenue		Profit
SK Telink Co., Ltd.	W	174,837		52,821		122,016		313,404		8,846
SK Broadband Co., Ltd.		5,971,505		3,091,837		2,879,668		4,058,997		213,468
PS&Marketing Corporation		478,745		263,457		215,288		1,445,540		3,179
SERVICE ACE Co., Ltd.		99,059		66,496		32,563		197,146		2,519
SERVICE TOP Co., Ltd.		72,026		46,067		25,959		185,452		2,066
SK O&S Co., Ltd.		95,748		58,870		36,878		285,591		69
Home & Service Co., Ltd.		131,947		90,775		41,172		405,255		550
SK stoa Co., Ltd.		107,943		59,931		48,012		316,249		19,163
(4)	Changes in subsidiaries
---	---
1)	The list of subsidiaries that were newly included in consolidation scope for the year ended December 31, 2023 is as follows:
---	---
Subsidiary	Reason
---	---
Global AI Platform Corporation Korea	Established by SK Telecom Americas, Inc.
Global AI Platform Corporation	Established by SK Telecom Americas, Inc.
2)	The list of subsidiaries that were excluded from consolidation scope for the year ended December 31, 2023 is as follows:
---	---
Subsidiary	Reason
---	---
SK Telecom Japan Inc.	Loss of control
SK Planet Japan, K. K.	Loss of control

F-19

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

1.	Reporting Entity, Continued
(5)	The financial information of significant non-controlling interests of the Group as of and for the years ended December 31, 2023, 2022 and 2021 are as follows:
---	---
(In millions of won)
---	---	---	---
	SK Broadband Co., Ltd.(*)
Ownership of non-controlling interests (%)		25.4
	As of December 31, 2023
Current assets	W	1,388,965
Non-current assets		5,214,315
Current liabilities		(1,388,317	)
Non-current liabilities		(1,988,989	)
Net assets		3,225,974
Carrying amount of non-controlling interests		819,592
	2023
Revenue	W	4,274,747
Profit for the year		202,890
Total comprehensive income		183,499
Profit attributable to non-controlling interests		51,448
Net cash provided by operating activities	W	1,110,847
Net cash used in investing activities		(1,064,434	)
Net cash used in financing activities		(60,254	)
Effects of exchange rate changes on cash and cash equivalents		9
Net decrease in cash and cash equivalents		(13,832	)
Dividends paid to non-controlling interests for the year ended December 31, 2023	W	50,557
(*)	The above condensed financial information is the consolidated financial information of the subsidiary and reflects fair value adjustments as a result of the business combination.
---	---

F-20

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

1.	Reporting Entity, Continued
(5)	The financial information of significant non-controlling interests of the Group as of and for the years ended December 31, 2023, 2022 and 2021 are as follows, Continued:
---	---
(In millions of won)
---	---	---	---
	SK Broadband Co., Ltd.(*)
Ownership of non-controlling interests (%)		25.3
	As of December 31, 2022
Current assets	W	1,348,305
Non-current assets		5,076,410
Current liabilities		(1,707,805	)
Non-current liabilities		(1,488,834	)
Net assets		3,228,076
Carrying amount of non-controlling interests		816,676
	2022
Revenue	W	4,156,326
Profit for the year		217,303
Total comprehensive income		237,860
Profit attributable to non-controlling interests		51,528
Net cash provided by operating activities	W	1,184,794
Net cash used in investing activities		(807,965	)
Net cash used in financing activities		(415,908	)
Effects of exchange rate changes on cash and cash equivalents		(584	)
Net decrease in cash and cash equivalents		(39,663	)
Dividends paid to non-controlling interests for the year ended December 31, 2022	W	—
(*)	The above condensed financial information is the consolidated financial information of the subsidiary and reflects fair value adjustments as a result of the business combination.
---	---

F-21

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

1.	Reporting Entity, Continued
(5)	The financial information of significant non-controlling interests of the Group as of and for the years ended December 31, 2023, 2022 and 2021 are as follows, Continued:
---	---
(In millions of won)
---	---	---	---
	SK Broadband Co., Ltd.(*)
Ownership of non-controlling interests (%)		25.1
	As of December 31, 2021
Current assets	W	1,252,935
Non-current assets		4,886,448
Current liabilities		(1,433,800	)
Non-current liabilities		(1,717,074	)
Net assets		2,988,509
Carrying amount of non-controlling interests		740,771
	2021
Revenue	W	4,049,156
Profit for the year		198,268
Total comprehensive income		214,003
Profit attributable to non-controlling interests		52,935
Net cash provided by operating activities	W	1,072,307
Net cash used in investing activities		(615,510	)
Net cash used in financing activities		(248,139	)
Effects of exchange rate changes on cash and cash equivalents		(59	)
Net increase in cash and cash equivalents		208,599
Dividends paid to non-controlling interests for the year ended December 31, 2021	W	—
(*)	The above condensed financial information is the consolidated financial information of the subsidiary and reflects fair value adjustments as a result of the business combination.
---	---
2.	Basis of Preparation
---	---
(1)	Statement of compliance
---	---

These consolidated financial statements were prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”).

These consolidated financial statements were authorized for issue by the Board of Directors on February 2, 2024 for statutory shareholders’ approval purpose, and re-authorized for issue by management in connection with the filing with the U.S. Securities Exchange Commission on April 29, 2024.

F-22

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

2.	Basis of Preparation, Continued
(2)	Basis of measurement
---	---

The consolidated financial statements have been prepared on the historical cost basis, except for the following material items in the consolidated statement of financial position:

•	derivative financial instruments measured at fair value;
•	financial instruments measured at fair value through profit or loss (“FVTPL”);
---	---
•	financial instruments measured at fair value through other comprehensive income (“FVOCI”);
---	---
•	liabilities measured at fair value for cash-settled share-based payment arrangement; and
---	---
•	liabilities (assets) for defined benefit plans recognized at the total present value of defined benefit obligations less the fair value of plan assets.
---	---
(3)	Functional and presentation currency
---	---

Financial statements of Group entities within the Group are prepared in functional currency of each group entity, which is the currency of the primary economic environment in which each entity operates. Consolidated financial statements of the Group are presented in Korean won, which is the Parent Company’s functional and presentation currency.

(4)	Use of estimates and judgments

The preparation of the consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period prospectively.

1)	Critical judgments

Information about critical judgments in applying accounting policies that have the most significant effects on the amounts recognized in the consolidated financial statements is included in notes for the following areas: consolidation (whether the Group has de facto control over an investee), and determination of stand-alone selling prices.

2)	Assumptions and estimation uncertainties

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year are included in the following notes: loss allowance (notes 6 and 35), estimated useful lives of costs to obtain a contract (notes 8), property and equipment and intangible assets (notes 3 (7), (8), 13 and 17), impairment of goodwill (notes 3 (10) and 16), recognition of provision (notes 3 (15) and 20), measurement of defined benefit liabilities (assets) (notes 3 (14) and 21), transaction of derivative instruments (notes 3 (6) and 22) and recognition of deferred tax assets (liabilities) (notes 3 (23) and 31).

F-23

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

2.	Basis of Preparation, Continued
(4)	Use of estimates and judgments, Continued
---	---
3)	Fair value measurement
---	---

A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. The Group has an established policies and processes with respect to the measurement of fair values including Level 3 fair values, and the measurement of fair values is reviewed and is directly reported to the finance executives.

The Group regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the Group assesses the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of IFRS, including the level in the fair value hierarchy in which such valuations should be classified.

When measuring the fair value of an asset or a liability, the Group uses market observable data as far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

•	Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
•	Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
---	---
•	Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
---	---

If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. The Group recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

Information about assumptions used for fair value measurements are included in note 22 and note 35.

3.	Material Accounting Policies

The material accounting policies applied by the Group in the preparation of its consolidated financial statements in accordance with IFRS are included below. Except for certain standards and amendments which are effective for annual periods beginning on or after January 1, 2023, the material accounting policies applied by the Group in these consolidated financial statements have been consistently applied for all periods presented, except for the changes described below. The Group has not early adopted any standards, interpretations or amendments that have been issued but are not yet effective.

The new and amended standards and interpretations that are effective for annual periods beginning on or after January 1, 2023 are as follows. These amended standards had no material impact on the Group’s consolidated financial statements.

•	Disclosure of Accounting Polices (Amendments to IAS 1)

F-24

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

3.	Material Accounting Policies, Continued
•	Definition of Accounting Estimates (Amendments to IAS 8)
---	---
•	Deferred Tax related to Assets and Liabilities Arising from a Single Transaction (Amendments to IAS 12)
---	---
•	IFRS 17 <br>Insurance Contracts<br>and its amendments
---	---
•	International tax reform – Pillar Two model rules (Amendments to IAS 12)
---	---

The Pillar Two model rules is scheduled to take effect for the Group’s fiscal year beginning January 1, 2024. As the Group falls within the scope of the enacted Pillar Two model rules, it has assessed the potential exposure to Pillar Two income tax. The assessment of potential exposure to Pillar Two income tax is based on the most recent tax returns of the Group’s ultimate controlling entity group, country-by-country reporting, and financial statements. The Group expects that the exposure to Pillar Two income tax will be immaterial.

As described in note 41, the Parent Company carried out a spin-off of its businesses of managing investments in semiconductor, New Information and Communication Technologies(“ICT”) and other businesses and making new investments pursuant to the resolution of the Board of Directors on June 10, 2021 and approval of shareholders’ meeting on October 12, 2021. The Group has applied IFRS 5, Non-current Assets Held for Sale and Discontinued Operations , and accordingly, presented profit or loss of the spin-off business as discontinued operations.

(1)	Operating segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. The Group’s operating segments have been determined to be each business unit, for which the Group generates separately identifiable financial information that is regularly reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance. The Group has three reportable segments as described in note 4. Segment results that are reported to the chief operating decision maker include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

(2)	Basis of consolidation
(a)	Business combination
---	---

A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control.

In determining whether a particular set of activities and assets is a business, the Group assesses whether the set of assets and activities acquired includes, at a minimum, an input and substantive process and whether the acquired set has the ability to produce outputs.

The Group has an option to apply a ‘concentration test’ that permits a simplified assessment of whether an acquired set of activities and assets is not a business. The optional concentration test is met if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets.

F-25

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

3.	Material Accounting Policies, Continued
(2)	Basis of consolidation, Continued
---	---
(a)	Business combination, Continued
---	---

Consideration transferred is generally measured at fair value, identical to the measurement of identifiable net assets acquired at fair value. The difference between the acquired company’s fair value and the consideration transferred is accounted for goodwill. Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognized in profit or loss immediately. Acquisition-related costs are expensed in the periods in which the costs are incurred and the services are received, except if related to the costs to issue debt or equity securities recognized based on IAS 32 and IFRS 9.

Consideration transferred does not include the amount settled in relation to the pre-existing relationship. Such amounts are generally recognized through profit or loss.

Contingent consideration is measured at fair value at the acquisition date. Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. If contingent consideration is not classified as equity, the Group subsequently recognizes changes in fair value of contingent consideration through profit or loss.

(b)	Non-controlling interests

Non-controlling interests are measured at their proportionate share of the acquiree’s identifiable net assets at the date of acquisition.

Changes in a Controlling Company’s ownership interest in a subsidiary that do not result in the Controlling Company losing control of the subsidiary are accounted for as equity transactions.

(c)	Subsidiaries

Subsidiaries are entities controlled by the Group. The Group controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Consolidation of an investee begins from the date the Group obtains control of the investee and cease when the Group loses control of the investee.

(d)	Loss of control

If the Group loses control of a subsidiary, the Group derecognizes the assets and liabilities of the former subsidiary from the consolidated statement of financial position and recognizes gain or loss associated with the loss of control attributable to the former controlling interest. Any investment retained in the former subsidiary is recognized at its fair value when control is lost.

(e)	Interest in investees accounted for using the equity method

Interest in investees accounted for using the equity method composed of interest in associates and joint ventures.

An associate is an entity in which the Group has significant influence, but not control, over the entity’s financial and operating policies. A joint venture is a joint arrangement whereby the Group that has joint control of the arrangement has rights to the net assets of the arrangement.

F-26

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

3.	Material Accounting Policies, Continued
(2)	Basis of consolidation, Continued
---	---
(e)	Interest in investees accounted for using the equity method, Continued
---	---

The investment in an associate and a joint venture is initially recognized at cost including transaction costs and the carrying amount is increased or decreased to recognize the Group’s share of the profit or loss and changes in equity of the associate or the joint venture after the date of acquisition.

(f)	Intra-group transactions

Intra-group balances and transactions, and any unrealized income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. The Group’s share of unrealized gain incurred from transactions with investees accounted for using the equity method are eliminated and unrealized loss are eliminated using the same basis if there are no evidence of asset impairments.

(g)	Business combinations under common control

SK Inc. is the ultimate controlling entity of the Group. The assets and liabilities acquired under business combination under common control are recognized at the carrying amounts in the ultimate controlling shareholder’s consolidated financial statements. The difference between consideration and carrying amount of net assets acquired is added to or subtracted from capital surplus and others.

(3)	Cash and cash equivalents

Cash and cash equivalents comprise cash balances, call deposits and investment securities with maturities of three months or less from the acquisition date that are easily convertible to cash and subject to an insignificant risk of changes in their fair value.

(4)	Inventories

Inventories are initially recognized at the acquisition cost and subsequently measured using the weighted average method. During the period, a perpetual inventory system is used to track inventory quantities, which is adjusted based on the physical inventory counts performed at the period end. When the net realizable value of inventories is less than cost, the carrying amount is reduced to the net realizable value, and any difference is charged to current period as operating expenses.

(5)	Non-derivative financial assets
(a)	Recognition and initial measurement
---	---

Accounts receivable – trade and debt investments issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Group becomes a party to the contractual provisions of the instrument.

A financial asset (unless an accounts receivable – trade without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition or issue. An accounts receivable – trade without a significant financing component is initially measured at the transaction price.

F-27

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

3.	Material Accounting Policies, Continued
(5)	Non-derivative financial assets, Continued
---	---
(b)	Classification and subsequent measurement
---	---

On initial recognition, a financial asset is classified as measured at:

•	FVTPL
•	FVOCI – equity investment
---	---
•	FVOCI – debt investment
---	---
•	Financial assets at amortized cost
---	---

A financial asset is classified based on the business model in which a financial asset is managed and its contractual cash flow characteristics.

Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

•	it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
•	its contractual terms give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding on specified dates.
---	---

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

•	it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
•	its contractual terms give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding on specified dates.
---	---

On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investment’s fair value in other comprehensive income (“OCI”). This election is made on an investment-by-investment basis.

All financial assets not classified as measured at amortized cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

F-28

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

3.	Material Accounting Policies, Continued
(5)	Non-derivative financial assets, Continued
---	---
(b)	Classification and subsequent measurement, Continued
---	---

The following accounting policies are applied to the subsequent measurement of financial assets.

Financial assets at FVTPL	These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.
Financial assets at amortized cost	These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.
Debt investments at FVOCI	These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.
Equity investments at FVOCI	These assets are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of the cost of the investment. Other net gains and losses are recognized in OCI and are never reclassified to profit or loss.
(c)	Impairment
---	---

The Group estimates the expected credit losses (“ECL”) for the debt instruments measured at amortized cost and FVOCI based on the Group’s historical experience and informed credit assessment that includes forward-looking information. The impairment approach is decided based on the assessment of whether the credit risk of a financial asset has increased significantly since initial recognition. However, the Group applies a practical expedient and recognizes impairment losses equal to lifetime ECLs for accounts receivable – trade and lease receivables from the initial recognition.

ECL is a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e., the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Group expects to receive).

At each reporting date, the Group assesses whether financial assets measured at amortized cost and debt investments at FVOCI are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

F-29

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

3.	Material Accounting Policies, Continued
(5)	Non-derivative financial assets, Continued
---	---
(c)	Impairment, Continued
---	---

Loss allowance on financial assets measured at amortized cost is deducted from the carrying amount of the respective assets, while loss allowance on debt instruments at FVOCI is recognized in OCI, instead of reducing the carrying amount of the transferred assets.

(d)	Derecognition

Financial assets

The Group derecognizes a financial asset when:

•	the contractual rights to the cash flows from the financial asset expire; or
•	it transfers the rights to receive the contractual cash flows in a transaction in which either:
---	---
•	substantially all of the risks and rewards of ownership of the financial asset are transferred; or
---	---
•	the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.
---	---

The Group enters into transactions whereby it transfers assets recognized in its consolidated statement of financial position, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

Interest rate benchmark reform

When the basis for determining the contractual cash flows of a financial asset or financial liability measured at amortized cost changed as a result of interest rate benchmark reform, the Group updated the effective interest rate of the financial asset or financial liability to reflect the change that is required by the reform. A change in the basis for determining the contractual cash flows is required by interest rate benchmark reform if the following conditions are met:

•	the change is necessary as a direct consequence of the reform; and
•	the new basis for determining the contractual cash flows is economically equivalent to the previous basis – i.e., the basis immediately before the change.
---	---

When changes were made to a financial asset or financial liability in addition to changes to the basis for determining the contractual cash flows required by interest rate benchmark reform, the Group first updated the effective rate of the financial asset or financial liability to reflect the change that is required by interest rate benchmark reform. After that, the Group applied the policies on accounting for modifications to the additional changes.

(e)	Offsetting

Financial assets and financial liabilities are offset, and the net amount is presented in the statement of financial position when the Group currently has a legally enforceable right to offset the recognized amounts and intends either to settle on a net basis or to settle the liability and realize the asset simultaneously.

F-30

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

3.	Material Accounting Policies, Continued
(5)	Non-derivative financial assets, Continued
---	---
(e)	Offsetting, Continued
---	---

A financial asset and a financial liability are offset only when the right to set off the amount is not contingent on future event and legally enforceable even on the event of default, insolvency or bankruptcy.

(6)	Derivative financial instruments, including hedge accounting

Derivatives are initially recognized at fair value. Subsequent to initial recognition, derivatives are measured at fair value at the end of each reporting period, and changes therein are accounted for as described below.

(a)	Hedge accounting

The Group holds forward exchange contracts, interest rate swaps, currency swaps and other derivative contracts to manage interest rate risk and foreign exchange risk. The Group designates derivatives as hedging instruments to hedge the variability in cash flow associated with highly probable forecasted transactions or firm commitments (a cash flow hedge).

On initial designation of the hedge, the Group formally documents the relationship between the hedging instrument(s) and hedged item(s), including the risk management objectives and strategy in undertaking the hedge transaction, together with the methods that will be used to assess the effectiveness of the hedging relationship.

Hedges directly affected by interest rate benchmark reform

When uncertainty arises about the interest rate benchmark designated as a hedged risk and the timing or the amount of the interest rate benchmark-based cash flows of the hedged item or of the hedging instrument as a result of IBOR reform, for the purpose of evaluating whether there is an economic relationship between the hedged items and the hedging instruments, the Group assumes that the interest rate benchmark on which the hedged items and the hedging instruments are based is not altered as a result of interest rate benchmark reform.

For a cash flow hedge of a forecast transaction, the Group assumes that the benchmark interest rate will not be altered as a result of interest rate benchmark reform for the purpose of assessing whether the forecast transaction is highly probable and determining whether a previously designated forecast transaction in a discontinued cash flow hedge is still expected to occur.

The Group will cease applying the specific policy for assessing the economic relationship between the hedged item and the hedging instrument

•	to a hedged item or hedging instrument when the uncertainty arising from interest rate benchmark reform is no longer present with respect to the timing and the amount of the interest rate benchmark-based cash flows of the respective item or instrument; or
•	when the hedging relationship is discontinued.
---	---

F-31

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

3.	Material Accounting Policies, Continued
(6)	Derivative financial instruments, including hedge accounting, Continued
---	---
(a)	Hedge accounting, Continued
---	---

When the basis for determining the contractual cash flows of the hedged item or hedging instrument changes as a result of IBOR reform and therefore there is no longer uncertainty arising about the cash flows of the hedged item or the hedging instrument, the Group amends the hedge documentation of that hedging relationship to reflect the change(s) required by IBOR reform.

The Group amends the formal hedge documentation by the end of the reporting period during which a change required by IBOR reform is made to the hedged risk, hedged item or hedging instrument. These amendments in the formal hedge documentation do not constitute the discontinuation of the hedging relationship or the designation of a new hedging relationship.

If changes are made in addition to those changes required by interest rate benchmark reform to the financial asset or financial liability designated in a hedging relationship or to the designation of the hedging relationship, the Group determines whether those additional changes result in the discontinuation of hedging accounting. If the additional changes do not result in the discontinuation of hedging accounting, the Group amend the formal designation of the hedging relationship.

When the interest rate benchmark on which the hedged future cash flows had been based is changed as required by IBOR reform, for the purpose of determining whether the hedged future cash flows are expected to occur, the Group deems that the hedging reserve recognized in OCI for that hedging relationship is based on the alternative benchmark rate on which the hedged future cash flows will be based.

Cash flow hedge

When a derivative is designated to hedge the variability in cash flows attributable to a particular risk associated with a recognized asset or liability or a highly probable forecasted transaction that could affect profit or loss, the effective portion of changes in the fair value of the derivative is recognized in other comprehensive income, net of tax, and presented in the hedging reserve in equity. Any ineffective portion of changes in the fair value of the derivative is recognized immediately in profit or loss. If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated, exercised, or the designation is revoked, then hedge accounting is discontinued prospectively. The cumulative gain or loss on the hedging instrument that has been recognized in other comprehensive income is reclassified to profit or loss in the periods during which the forecasted transaction occurs. If the forecasted transaction is no longer expected to occur, then the balance in other comprehensive income is recognized immediately in profit or loss.

(b)	Other derivative financial instruments

Other derivative financial instrument not designated as a hedging instrument are measured at fair value, and the changes in fair value of the derivative financial instrument is recognized immediately in profit or loss.

F-32

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

3.	Material Accounting Policies, Continued
(7)	Property and equipment
---	---

Property and equipment are initially measured at cost. The cost of property and equipment includes expenditures arising directly from the construction or acquisition of the asset, any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management and the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located.

Property and equipment, subsequently, are carried at cost less accumulated depreciation and accumulated impairment losses.

Subsequent costs are recognized in the carrying amount of property and equipment at cost or, if appropriate, as a separate item if it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be reliably measured. The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing are recognized in profit or loss as incurred.

Property and equipment, except for land, are depreciated on a straight-line basis over estimated useful lives that appropriately reflect the pattern in which the asset’s future economic benefits are expected to be consumed. A component that is significant compared to the total cost of property and equipment is depreciated over its separate useful life.

Gains and losses on disposal of an item of property and equipment are determined by comparing the proceeds from disposal with the carrying amount of property and equipment and are recognized as other operating income or expense.

The estimated useful lives of the Group’s property and equipment are as follows:

	Useful lives (years)
Buildings and structures	15 ~ 40
Machinery	3 ~ 15, 30
Other property and equipment	3 ~ 10
Right-of-use assets	1 ~ 50

The Group reviews estimated residual values, expected useful lives, and depreciation methods annually at the end of each reporting date and adjusts, if appropriate. The change is accounted for as a change in an accounting estimate.

(8)	Intangible assets

Intangible assets are measured initially at cost and, subsequently, are carried at cost less accumulated amortization and accumulated impairment losses.

Intangible assets, except for goodwill, are amortized on a straight-line basis over the estimated useful lives of intangible assets from the date that they are available for use. The residual value of intangible assets is zero. However, club memberships and brand are expected to be available for use as there are no foreseeable limits to the periods. These intangible assets are determined as having indefinite useful lives and, therefore, not amortized.

F-33

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

3.	Material Accounting Policies, Continued
(8)	Intangible assets, Continued
---	---

The estimated useful lives of the Group’s intangible assets are as follows:

	Useful lives (years)
Frequency usage rights	5 ~ 10
Land usage rights	5
Industrial rights	5, 10
Development costs	5
Facility usage rights	10, 20
Customer relations	3 ~ 15
Other	3 ~ 20

Amortization periods and the amortization methods for intangible assets with finite useful lives are reviewed at the end of each reporting period. The useful lives of intangible assets that are not being amortized are reviewed at the end of each reporting period to determine whether events and circumstances continue to support indefinite useful life assessments for those assets. Changes, if appropriate, are accounted for as changes in accounting estimates.

Expenditures on research activities are recognized in profit or loss as incurred. Development expenditures are capitalized only if development costs can be reliably measured, the product or process is technically and commercially feasible, future economic benefits are probable, and the Group intends to and has sufficient resources to complete development and to use or sell the asset. Other development expenditures are recognized in profit or loss as incurred.

Subsequent expenditures are capitalized only when they increase the future economic benefits embodied in the specific asset to which it relates. All other expenditures, including expenditures on internally generated goodwill and brands, are recognized in profit or loss as incurred.

(9)	Investment property

Investment properties are properties held to earn rent income and/or for capital appreciation. Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are reported at cost less accumulated depreciation and accumulated impairment losses.

Subsequent expenditures are recognized in carrying amount of an asset or as a separate asset if it is probable that future economic benefits associated with the assets will flow into the Group and the cost of an asset can be measured reliably. The carrying amount of those parts that are replaced is derecognized. The costs associated with routine maintenance and repairs are recognized in profit or loss as incurred.

Investment property, except for land, is depreciated on a straight-line basis over estimated useful lives of 30 years. In addition, right-of-use asset classified as investment property is depreciated using the straight-line basis from the commencement date to the end of the lease term.

The depreciation method, estimated useful lives and residual values are reviewed at the end of each reporting date and adjusted, if appropriate. The change is accounted for as a change in an accounting estimate.

F-34

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

3.	Material Accounting Policies, Continued
(10)	Impairment of non-financial assets
---	---

The carrying amounts of the Group’s non-financial assets other than contract assets recognized for revenue arising from contracts with a customer, assets recognized for the costs to obtain or fulfill a contract with a customer, employee benefits, inventories, deferred tax assets, and non-current assets held for sale are reviewed at the end of the reporting period to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill and intangible assets that have indefinite useful lives or that are not yet available for use, irrespective of whether there is any indication of impairment, are tested for impairment annually by comparing their recoverable amounts to their carrying amounts.

The Group estimates the recoverable amount of an individual asset, and if it is impossible to measure the individual recoverable amount of an asset, the Group estimates the recoverable amount of cash-generating unit (“CGU”). A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. The value in use is estimated by applying a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU for which estimated future cash flows have not been adjusted, to the estimated future cash flows expected to be generated by the asset or CGU.

An impairment loss is recognized in profit or loss to the extent the carrying amount of the asset exceeds its recoverable amount.

Goodwill acquired in a business combination is allocated to each CGU that is expected to benefit from the synergy arising from the business acquired. Any impairment identified at the CGU level will first reduce the carrying amount of goodwill and then be used to reduce the carrying amount of the other assets in the CGU on a pro rata basis. Except for impairment losses in respect of goodwill which are never reversed, an impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

(11)	Leases

A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

(a)	Group as a lessee

At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of its relative stand-alone prices. However, the Group has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.

The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

F-35

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

3.	Material Accounting Policies, Continued
(11)	Leases, Continued
---	---
(a)	Group as a lessee, Continued
---	---

The right-of-use asset is subsequently depreciated using the straight-line basis from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.

The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.

Lease payments included in the measurement of the lease liability comprise the following:

•	fixed payments, including in-substance fixed payments;
•	variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
---	---
•	amounts expected to be payable under a residual value guarantee; and
---	---
•	the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.
---	---

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The Group presents right-of-use assets that do not meet the definition of investment property in ‘property and equipment’ in the statement of financial position.

The Group has elected not to recognize right-of-use assets and lease liabilities for leases of low-value assets and short-term leases. The Group recognizes the lease payments on short-term leases and leases of low value assets as an expense on a straight-line basis over the lease term.

F-36

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

3.	Material Accounting Policies, Continued
(11)	Leases, Continued
---	---
(b)	Group as a lessor
---	---

At inception or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices.

When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease.

To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Group is an intermediate lessor, is accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Group applies the exemption described above, then it classifies the sub-lease as an operating lease.

If an arrangement contains lease and non-lease components, then the Group applies IFRS 15 to allocate the consideration in the contract.

The Group applies derecognition and impairment requirements in IFRS 9 to the net investment in the lease. The Group further regularly reviews estimated unguaranteed residual values used in calculating the gross investment in the lease.

The Group recognizes lease payments received under operating leases as income on a straight-line basis over the lease term as part of ‘other revenue’.

(12)	Non-current assets held for sale

Non-current assets, or disposal groups comprising assets and liabilities, that are expected to be recovered primarily through sales rather than through continuing use, are classified as held for sale. In order to be classified as held for sale, the assets (or disposal groups) must be available for immediate sale in their present condition and their sale must be highly probable. The assets or disposal groups that are classified as non-current assets held for sale are measured at the lower of their carrying amounts and fair value less cost to sell. The Group recognizes an impairment loss for any initial or subsequent write-down of assets (or disposal groups) to fair value less costs to sell and a gain for any subsequent increase in fair value less costs to sell up to the cumulative impairment loss previously recognized.

A non-current asset that is classified as held for sale or part of a disposal group classified as held for sale is not depreciated (or amortized).

F-37

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

3.	Material Accounting Policies, Continued
(13)	Non-derivative financial liabilities
---	---

The Group classifies non-derivative financial liabilities into financial liabilities at fair value through profit or loss or other financial liabilities in accordance with the substance of the contractual arrangement. The Group recognizes financial liabilities in the consolidated statement of financial position when the Group becomes a party to the contractual provisions of the financial liabilities.

(a)	Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading or designated as such upon initial recognition. Subsequent to initial recognition, these liabilities are measured at fair value. The amount of change in fair value of financial liability that is attributable to changes in the credit risk of that liability shall be presented in other comprehensive income, and the remaining amount of change in the fair value of the liability shall be presented in profit or loss. Upon initial recognition, transaction costs that are directly attributable to the issue of the financial liability are recognized in profit or loss as incurred.

(b)	Other financial liabilities

Non-derivative financial liabilities other than financial liabilities at fair value through profit or loss are classified as other financial liabilities. At the date of initial recognition, other financial liabilities are measured at fair value minus transaction costs that are directly attributable to the issue of the financial liabilities. Subsequent to initial recognition, other financial liabilities are measured at amortized cost and the interest expenses are recognized using the effective interest method.

(c)	Derecognition of financial liability

The Group extinguishes a financial liability only when the contractual obligation is fulfilled, canceled or expires. The Group recognizes new financial liabilities at fair value based on new contracts and eliminates existing liabilities when the contractual terms of the financial liabilities change and the cash flows change substantially.

When a financial liability is derecognized, the difference between the carrying amount and the consideration paid (including any transferred non-cash assets or liabilities assumed) is recognized in profit or loss.

(14)	Employee benefits
(a)	Short-term employee benefits
---	---

Short-term employee benefits are employee benefits that are due to be settled within 12 months after the end of the period in which the employees render related services. When an employee has rendered a service to the Group during an accounting period, the Group recognizes the undiscounted amount of short-term employee benefits expected to be paid in exchange for that service.

F-38

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

3.	Material Accounting Policies, Continued
(14)	Employee benefits, Continued
---	---
(b)	Other long-term employee benefits
---	---

Other long-term employee benefits include employee benefits that are settled beyond 12 months after the end of the period in which the employees render related services. The Group’s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Remeasurements are recognized in profit or loss in the period in which they arise.

(c)	Retirement benefits: defined contribution plans

When an employee has rendered a service to the Group during a period, the Group recognizes the contribution payable to a defined contribution plan in exchange for that service as a liability (accrued expense), after deducting any contribution already paid. If the contribution already paid exceeds the contribution due for service before the end of the reporting period, the Group recognizes that excess as an asset (prepaid expense) to the extent that the prepayment will lead to a reduction in future payments or a cash refund.

(d)	Retirement benefits: defined benefit plans

At the end of reporting period, defined benefit liabilities (assets) relating to defined benefit plans are recognized at present value of defined benefit obligations net of fair value of plan assets.

The calculation is performed annually by an independent actuary using the projected unit credit method. When the fair value of plan assets exceeds the present value of the defined benefit obligation, the Group recognizes an asset, to the extent of the present value of any economic benefits available in the form of refunds from the plan or reduction in the future contributions to the plan.

Remeasurements of the net defined benefit liability (asset), which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income. The Group determines net interests on net defined benefit liability (asset) by multiplying discount rate determined at the beginning of the annual reporting period and considers changes in net defined benefit liability (asset) from contributions and benefit payments. Net interest costs and other costs relating to the defined benefit plan are recognized through profit or loss.

When the plan amendment or curtailment occurs, gains or losses on amendment or curtailment in benefits for the past service provided are recognized through profit or loss. The Group recognizes a gain or loss on a settlement when the settlement of defined benefit plan occurs.

(15)	Provisions

Provisions are recognized when the Group has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The risks and uncertainties that inevitably surround many events and circumstances are taken into account in reaching the best estimate of a provision. If the effect of the time value of money is material, provisions are determined at the present value of the expected future cash flows.

F-39

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

3.	Material Accounting Policies, Continued
(15)	Provisions, Continued
---	---

If some or all of the expenditures required to settle a provision are expected to be reimbursed by another party, the reimbursement is recognized when, and only when, it is virtually certain that reimbursement will be received if the entity settles the obligation. The reimbursement is treated as a separate asset.

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimates. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision is reversed.

A provision is used only for expenditures for which the provision was originally recognized.

(16)	Emissions Rights

The Group accounts for greenhouse gases emission right and the relevant liability as below pursuant to the Act on Allocation and Trading of Greenhouse Gas Emission in Korea.

(a)	Greenhouse Gases Emission Right

Greenhouse Gases Emission Right consists of emission allowances, which are allocated from the government free of charge or purchased from the market. The cost includes any directly attributable costs incurred during the normal course of business.

The Group derecognizes an emission right asset when the emission allowance is unusable, disposed or submitted to government in which the future economic benefits are no longer expected to be probable.

(b)	Emissions liability

Emission liability is a present obligation of submitting emission rights to the government with regard to emission of greenhouse gas. The emission liability is measured based on the expected quantity of emission for the performing period in excess of emission allowance in possession and the unit price for such emission rights in the market at the end of the reporting period. The emissions liabilities are derecognized when they are surrendered to the government.

(17)	Transactions in foreign currencies
(a)	Foreign currency transactions
---	---

Transactions in foreign currencies are translated to the functional currency of the Group at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated to the functional currency using the exchange rate at the reporting date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined.

Exchange differences arising from monetary items except for financial liabilities designated cashflow hedging instruments are recognized in profit or loss. If a gain or loss on a non-monetary item is recognized in other comprehensive income, any foreign exchange differences are also recognized in other comprehensive income. When a gain or loss on a non-monetary item is recognized in profit or loss, any foreign exchange differences are also recognized in profit or loss.

F-40

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

3.	Material Accounting Policies, Continued
(17)	Transactions in foreign currencies, Continued
---	---
(b)	Foreign operations
---	---

If the presentation currency of the Group is different from a foreign operation’s functional currency, the financial statements of the foreign operation are translated into the presentation currency using the following methods:

The assets and liabilities of foreign operations, whose functional currency is not the currency of a hyperinflationary economy, are translated to presentation currency at exchange rates at the reporting date. The income and expenses of foreign operations are translated to functional currency at exchange rates at the dates of the transactions. Foreign currency differences are recognized in other comprehensive income.

Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition of that foreign operation is treated as assets and liabilities of the foreign operation. Thus, they are expressed in the functional currency of the foreign operation and translated at the closing rate at the reporting date.

When a foreign operation is disposed, the relevant amount in the translation is transferred to profit or loss as part of the profit or loss on disposal. On the partial disposal of a subsidiary that includes a foreign operation, the relevant proportion of such cumulative amount is reattributed to non-controlling interest. In any other partial disposal of a foreign operation, the relevant proportion is reclassified to profit or loss.

(18)	Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of ordinary shares and share options are recognized as a deduction from equity, net of any tax effects.

When the Parent Company repurchases its own shares, the amount of the consideration paid is recognized as a deduction from equity and classified as treasury shares. The gains or losses from the purchase, disposal, reissue, or retirement of treasury shares are directly recognized in equity being as transaction with owners.

(19)	Hybrid bond

The Group recognizes a financial instrument issued by the Group as an equity instrument if it does not include contractual obligation to deliver financial assets including cash to the counter party.

(20)	Share-based payment

For equity-settled share-based payment transaction, if the fair value of the goods or services received cannot be reliably estimated, the Group measures the value indirectly by reference to the fair value of the equity instruments granted. The related expense with a corresponding increase in capital surplus and others is recognized over the vesting period of the awards.

The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized is based on the number of awards that meet the related service and non-market performance conditions at the vesting date.

F-41

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

3.	Material Accounting Policies, Continued
(20)	Share-based payment, Continued
---	---

The fair value of the amount payable to employees in respect of share appreciation rights, which are settled in cash, is recognized as an expense with a corresponding increase in liabilities, over the period in which the employees become unconditionally entitled to payment. The liability is remeasured at each reporting date and at settlement date based on the fair value of the share appreciation rights. Any changes in the fair value of the liability are recognized in profit or loss.

(21)	Revenue
(a)	Identification of performance obligations in contracts with customers
---	---

The Group identifies the distinct services or goods as performance obligations in contracts with customers such as (1) providing wireless and fixed-line telecommunications services, (2) sale of handsets and (3) providing other goods and services. In the case of providing both wireless telecommunications service and selling a handset together to one customer, the Group allocates considerations from the customer between the separate performance obligations for handset sale and wireless telecommunications service. The handset sale revenue is recognized when handset is delivered, and the wireless telecommunications service revenue is recognized over the period of the contract term as stated in the subscription contract.

(b)	Allocation of the transaction price to each performance obligation

The Group allocates the transaction price of a contract to each performance obligation identified on a relative stand-alone selling price basis. The Group uses “adjusted market assessment approach” for estimating the stand-alone selling price of a good or service.

(c)	Incremental costs of obtaining a contract

The Group pays commissions to its retail stores and authorized dealers in connection with acquiring service contracts. The commissions paid to these parties constituted a significant portion of the Group’s operating expenses. These commissions would not have been paid if there have been no binding contracts with subscribers and, therefore, the Group capitalizes certain costs associated with commissions paid to obtain new customer contracts and amortize them over the expected contract periods.

(d)	Customer loyalty programs

The Group provides customer loyalty points to customers based on the usage of the service to which the Group allocates a portion of consideration received as a performance obligation distinct from wireless telecommunications services. The amount to be allocated to the loyalty program is measured according to the relative stand-alone selling price of the customer loyalty points. The amount allocated to the loyalty program is deferred as a contract liability and is recognized as revenue when loyalty points are redeemed.

F-42

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

3.	Material Accounting Policies, Continued
(21)	Revenue, Continued
---	---
(e)	Consideration payable to a customer
---	---

Based on the subscription contract, a customer who uses the Group’s wireless telecommunications services may receive a discount for purchasing goods or services from a designated third party. The Group pays a portion of the price discounts that the customer receives to the third party which is viewed as consideration payable to a customer. The Group accounts for the amounts payable to the third party as a reduction of the wireless telecommunications service revenue.

(22)	Finance income and finance costs

Finance income comprises interest income on funds invested (including financial assets measured at fair value), dividend income, gains on disposal of financial assets at FVTPL, changes in fair value of financial instruments at FVTPL, and gains on hedging instruments that are recognized in profit or loss. Interest income is recognized as it accrues in profit or loss, using the effective interest rate method. Dividend income is recognized in profit or loss when the right to receive the dividend is established.

Finance costs comprise interest expense on borrowings and debentures, changes in fair value of financial instruments at FVTPL, and losses on hedging instruments that are recognized in profit or loss. Interest expense on borrowings and debentures is recognized as it accrues in profit or loss using the effective interest rate method.

(23)	Income taxes

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in profit or loss except to the extent that it relates to a business combination, or items recognized directly in equity or in OCI.

The Group pays income tax in accordance with the tax-consolidation system when the Parent Company and its subsidiaries are economically unified.

(a)	Current tax

Current tax is the expected tax payable or receivable on the taxable profit or loss for the year, using tax rates enacted or substantively enacted at the end of the reporting period, and includes interests and fines related to income taxes paid or payable. The taxable profit is different from the accounting profit for the period since the taxable profit is calculated excluding the temporary differences, which will be taxable or deductible in determining taxable profit (tax loss) of future periods, and non-taxable or non-deductible items from the accounting profit.

(b)	Deferred tax

Deferred tax is recognized by using the asset-liability method in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The Group recognizes a deferred tax liability for all taxable temporary differences, except for the difference associated with investments in subsidiaries and associates that the Group is able to control the timing of the reversal of the temporary difference and it is probable that the

F-43

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

3.	Material Accounting Policies, Continued
(23)	Income taxes, Continued
---	---
(b)	Deferred tax, Continued
---	---

temporary difference will not reverse in the foreseeable future. The Group recognizes a deferred tax asset for all deductible temporary differences to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilized.

A deferred tax asset is recognized for the carryforward of unused tax losses and unused tax credits to the extent that it is probable that future taxable profit will be available against which the unused tax losses and unused tax credits can be utilized. Future taxable profit is dependent on the reversal of taxable temporary differences. If there are insufficient taxable temporary differences to recognize the deferred tax asset, the business plan of the Group and the reversal of existing temporary differences are considered in determining the future taxable profit.

The Group reviews the carrying amount of a deferred tax asset at the end of each reporting period and reduces the carrying amount to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilized.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized, or the liability is settled based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and deferred tax assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset only if the Group has a legally enforceable right to offset the amount recognized and intends to settle the current tax liabilities and assets on a net basis. Income tax expense in relation to dividend payments is recognized when liabilities relating to the dividend payments are recognized.

(c)	Uncertainty over income tax treatments

The Group assesses the uncertainty over income tax treatments pursuant to IAS 12. If the Group concludes it is not probable that the taxation authority will accept an uncertain tax treatment, the Group reflects the effect of uncertainty for each uncertain tax treatment by using either of the following methods, depending on which method the entity expects to better predict the resolution of the uncertainty:

•	The most likely amount: the single most likely amount in a range of possible outcomes.
•	The expected value: the sum of the <br>probability-weighted<br> amounts in a range of possible outcomes.
---	---
(24)	Earnings per share
---	---

The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Parent Company by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares, which comprise share options granted to employees, if any.

F-44

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

3.	Material Accounting Policies, Continued
(25)	Discontinued operation
---	---

A discontinued operation is a component of the Group’s business, the operations and cash flows of which can be clearly distinguished from the rest of the Group and which:

•	represents a separate major line of business or geographic area of operations;
•	is part of a single co-ordinated plan to dispose of a separate major line of business or geographic area of operations; or
---	---
•	is a subsidiary acquired only for a purpose of resale.
---	---

When an operation is classified as a discontinued operation, the comparative statements of income and comprehensive income are re-presented as if the operation had been discontinued from the start of the earliest comparative year.

(26)	Standards issued but not yet effective

The new and amended standards and interpretations that are issued, but not yet effective for annual period beginning after January 1, 2023 are disclosed below. The following amendments are not expected to have a material impact on the Group’s consolidated financial statements.

•	Classification of Liabilities as Current or Non-current (Amendments to IAS 1).
•	Disclosures of Information on Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7)
---	---
•	Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)
---	---
•	Disclosures of Crypto assets (Amendments to IAS 1)
---	---
4.	Operating Segments
---	---

The Group’s operating segments have been identified to be each business unit, by which the Group provides different services and merchandise. The Group’s reportable segments include: cellular services, which include cellular voice service, wireless data service and wireless internet services; fixed-line telecommunication services, which include telephone services, internet services, and leased line services; and all other businesses, which include providing shopping channel and digital platform for selling products and other immaterial operations, each of which does not meet the quantitative threshold to be considered as a reportable segment and are presented collectively as others.

F-45

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

4.	Operating Segments, Continued
(1)	Segment information for the years ended December 31, 2023, 2022 and 2021 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	2023
	Continuing operations
	Cellular<br> services		Fixed-line<br><br> <br>telecommunication<br><br> <br>services		Others<br><br> <br>(*1)			Sub-total		Adjustments<br><br> <br>(*2)			Total
Total revenue	W	14,664,180		5,095,704		603,493			20,363,377		(2,754,866	)		17,608,511
Inter-segment revenue		1,541,014		1,167,684		46,168			2,754,866		(2,754,866	)		—
External revenue		13,123,166		3,928,020		557,325			17,608,511		—			17,608,511
Depreciation and amortization		2,743,448		971,628		24,390			3,739,466		(124,700	)		3,614,766
Operating profit (loss)		1,463,934		329,072		(42,771	)		1,750,235		6,041			1,756,276
Finance income and costs, net														(279,025	)
Gain relating to investments in associates and joint ventures, net														10,928
Profit before income tax														1,488,179
(In millions of won)
	2022
	Continuing operations
	Cellular<br> services		Fixed-line<br><br> <br>telecommunication<br><br> <br>services		Others<br><br> <br>(*1)			Sub-total		Adjustments<br><br> <br>(*2)			Total
Total revenue	W	14,496,866		4,895,791		592,188			19,984,845		(2,679,872	)		17,304,973
Inter-segment revenue		1,554,550		1,082,802		42,520			2,679,872		(2,679,872	)		—
External revenue		12,942,316		3,812,989		549,668			17,304,973		—			17,304,973
Depreciation and amortization		2,738,547		981,838		22,730			3,743,115		(121,790	)		3,621,325
Operating profit (loss)		1,334,306		311,210		(2,126	)		1,643,390		(49,042	)		1,594,348
Finance income and costs, net														(276,489	)
Loss relating to investments in associates and joint ventures, net														(81,707	)
Profit before income tax														1,236,152
(In millions of won)
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	2021
	Continuing operations														Discontinued<br><br> <br>operations
	Cellular<br> services		Fixed-line<br><br> <br>telecommunication<br><br> <br>services		Others<br><br> <br>(*1)		Sub-total		Adjustments<br><br> <br>(*2)			Total
Total revenue	W	14,214,407		4,790,641		362,978		19,368,026		(2,619,441	)		16,748,585			2,845,424
Inter-segment revenue		1,495,934		1,112,935		10,572		2,619,441		(2,619,441	)		—			462,341
External revenue		12,718,473		3,677,706		352,406		16,748,585		—			16,748,585			2,383,083
Depreciation and amortization		2,812,827		958,462		11,318		3,782,607		(110,052	)		3,672,555			287,412
Operating profit (loss)		1,123,147		294,070		14,550		1,431,767		595			1,432,362			73,005
Finance income and costs, net													(160,471	)		(222,406	)
Gain relating to investments in subsidiaries, associates and joint ventures, net													446,300			1,502,147
Profit before income tax													1,718,191			1,352,746

F-46

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

4.	Operating Segments, Continued
(1)	Segment information for the years ended December 31, 2023, 2022 and 2021 are as follows, Continued:
---	---
(*1)	The Parent Company carried out spin-off of its business of managing investments in semiconductor, new Information and Communication Technologies (“ICT”) and making new investments during the year ended December 31, 2021. Accordingly, the Group reclassified SK stoa Co., Ltd. from Commerce Services segment to Others segment.
---	---
(*2)	Adjustments for operating profit (loss) are the amount differences from operating profit (loss) included in CODM report which is based on Korean IFRS to operating profit (loss) under IFRS. The reconciliation of these amounts is included in note 4-(2). Adjustments for depreciation and amortization and operating profit (loss) also included the amount due to the consolidation adjustments, such as internal transactions.
---	---
(2)	Reconciliation of total segment operating profit to consolidated operating profit from continuing operations for the years ended December 31, 2023, 2022 and 2021 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---	---
	2023			2022			2021
Total segment operating profit (Before adjustments)	W	1,750,235			1,643,390			1,431,767
Adjustments(*1)		2,969			(31,320	)		(44,605	)
Total segment operating profit		1,753,204			1,612,070			1,387,162
Other operating income:
Gain on disposal of property and equipment and intangible assets		21,898			15,985			39,136
Others		28,468			40,274			76,627
		50,366			56,259			115,763
Other operating expenses:
Impairment loss on property and equipment and intangible assets		(10,369	)		(17,027	)		(3,135	)
Loss on disposal of property and equipment and intangible assets		(9,369	)		(20,465	)		(28,158	)
Donations		(14,766	)		(13,125	)		(12,800	)
Bad debt for accounts receivable – other		(5,256	)		(3,011	)		(3,995	)
Others(*2)		(7,534	)		(20,353	)		(22,475	)
		(47,294	)		(73,981	)		(70,563	)
Consolidated operating profit from continuing operations	W	1,756,276			1,594,348			1,432,362
(*1)	Adjustments for operating profit included the amount due to the consolidation adjustments, such as internal transactions.
---	---
(*2)	Others for the years ended December 31,<br><br>2022 and 2021 include <br>W<br>6.1 billion and <br>W<br>17.0 billion of penalties, respectively, and various other expenses with inconsequential amounts.
---	---

F-47

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

4.	Operating Segments, Continued
(2)	Reconciliation of total segment operating profit to consolidated operating profit from continuing operations for the years ended December 31, 2023, 2022 and 2021 are as follows, Continued:
---	---

Domestic revenue for the years ended December 31, 2023, 2022 and 2021 amounts to W 17,602 billion, W 17,302 billion and W 16,734 billion, respectively. Domestic non-current assets (excluding financial assets, investments in associates and joint ventures and deferred tax assets) as of December 31, 2023, 2022 and 2021 amount to W 19,285 billion, W 20,056 billion and W 20,227 billion, and non-current assets outside of Korea amount to W 3 billion, W 4 billion and W 4 billion, respectively.

No single customer contributed 10% or more to the Group’s total revenue for the years ended December 31, 2023, 2022 and 2021.

The Group principally operates its businesses in Korea and the revenue amounts earned outside of Korea are immaterial. Therefore, no entity-wide geographical information is presented.

(3)	Disaggregation of operating revenues considering the economic factors that affect the nature, amounts, timing and uncertainty of the Group’s revenue and future cash flows is as follows:
(In millions of won)
---	---	---	---	---	---	---	---
		2023		2022		2021
Goods and Services transferred at a point in time:
Cellular revenue	Goods and others(*1)	W	993,919		969,025		959,932
Fixed-line telecommunication revenue	Goods and others		93,174		66,477		105,340
Other revenue	Others(*2)		459,905		464,805		328,328
			1,546,998		1,500,307		1,393,600
Goods and Services transferred over time:
Cellular revenue	Wireless service(*3)		10,328,980		10,253,217		10,100,368
	Cellular interconnection		432,660		471,163		493,820
	Other(*4)		1,367,607		1,248,911		1,164,353
Fixed-line telecommunication revenue	Fixed-line service		147,669		156,662		217,000
	Cellular interconnection		15,804		21,209		69,769
	Internet Protocol Television(*5)		1,837,209		1,816,130		1,786,765
	International calls		190,872		180,689		162,379
	Internet service and<br> miscellaneous(*6)		1,643,292		1,571,822		1,336,453
Other revenue	Miscellaneous		97,420		84,863		24,078
			16,061,513		15,804,666		15,354,985
Continuing operations			17,608,511		17,304,973		16,748,585
Discontinued operations			—		—		2,383,083
		W	17,608,511		17,304,973		19,131,668
(*1)	Cellular revenue includes revenue from sales of handsets and other electronic accessories.
---	---
(*2)	Miscellaneous other revenue includes revenue from considerations received for the data broadcasting channel use for product sales-type and sales of goods through data broadcasting.
---	---

F-48

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

4.	Operating Segments, Continued
(3)	Disaggregation of operating revenues considering the economic factors that affect the nature, amounts, timing and uncertainty of the Group’s revenue and future cash flows is as follows, Continued:
---	---
(*3)	Wireless service includes revenue from wireless voice and data transmission services principally derived from usage charges to wireless subscribers.
---	---
(*4)	Other revenue includes revenue from billing and collection services as well as other miscellaneous services.
---	---
(*5)	Internet Protocol Television (“IPTV”) service revenue includes revenue from IPTV services principally derived from usage charges to IPTV subscribers.
---	---
(*6)	Internet service includes revenue from the high speed broadband internet service principally derived from usage charges to subscribers as well as other miscellaneous services.
---	---
5.	Deposits with Restrictions on Use
---	---

Deposits which are restricted in use as of December 31, 2023 and 2022 are summarized as follows:

(In millions of won)
	December 31, 2023		December 31, 2022
Cash and cash equivalents(*)	W	58		43
Short-term financial instruments(*)		79,500		79,514
Long-term financial instruments(*)		372		375
	W	79,930		79,932
(*)	Includes the followings: i) deposits restricted in use due to the court’s order for seizure and collection of bonds; and ii) charitable trust fund established by the Group, profits from which shall be donated to charitable institutions. As of December 31, 2023, such deposits and funds cannot be withdrawn before maturity.
---	---

F-49

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

6.	Trade and Other Receivables
(1)	Details of trade and other receivables as of December 31, 2023 and 2022 are as follows:
---	---
(In millions of won)	December 31, 2023
---	---	---	---	---	---	---	---
	Gross<br> amount		Loss allowance			Carrying<br><br> <br>amount
Current assets:
Accounts receivable – trade	W	2,221,266		(242,734	)		1,978,532
Short-term loans		78,824		(695	)		78,129
Accounts receivable – other(*)		375,748		(31,398	)		344,350
Accrued income		4,295		—			4,295
Guarantee deposits (Other current assets)		129,357		—			129,357
		2,809,490		(274,827	)		2,534,663
Non-current assets:
Long-term loans		71,847		(41,392	)		30,455
Long-term accounts receivable – other(*)		314,409		(1,878	)		312,531
Guarantee deposits		157,163		(300	)		156,863
Long-term accounts receivable – trade (Other <br>non-current<br> assets)		12,320		(3	)		12,317
		555,739		(43,573	)		512,166
	W	3,365,229		(318,400	)		3,046,829
(*)	Gross and carrying amounts of accounts receivable – other as of December 31, 2023 include <br>W<br>273,945 million of financial instruments classified as fair value through profit or loss (“FVTPL”).
---	---
(In millions of won)	December 31, 2022
---	---	---	---	---	---	---	---
	Gross<br><br> <br>amount		Loss allowance			Carrying<br><br> <br>amount
Current assets:
Accounts receivable – trade	W	2,205,530		(234,919	)		1,970,611
Short-term loans		79,298		(708	)		78,590
Accounts receivable – other(*)		522,091		(42,310	)		479,781
Accrued income		1,732		—			1,732
Guarantee deposits (Other current assets)		113,204		—			113,204
		2,921,855		(277,937	)		2,643,918
Non-current assets:
Long-term loans		71,857		(44,884	)		26,973
Long-term accounts receivable – other(*)		375,829		(1,878	)		373,951
Guarantee deposits		167,741		(300	)		167,441
Long-term accounts receivable – trade (Other <br>non-current<br> assets)		14,165		(4	)		14,161
		629,592		(47,066	)		582,526
	W	3,551,447		(325,003	)		3,226,444
(*)	Gross and carrying amounts of accounts receivable – other as of December 31, 2022 include <br>W<br>332,669 million of financial instruments classified<br><br><br>as<br> fair value through profit or loss (“FVTPL”).
---	---

F-50

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

6.	Trade and Other Receivables, Continued
(2)	Changes in the loss allowance on accounts receivable – trade measured at amortized costs for the years ended December 31, 2023 and 2022 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Beginning<br> balance		Impairment		Write-offs(*)			Collection of<br> receivables<br> previously<br> written-off		Business<br> combination		Ending<br><br> <br>balance
2023	W	234,923		37,906		(40,236	)		10,144		—		242,737
2022	W	238,881		27,053		(42,296	)		11,282		3		234,923
(*)	The Group writes off the trade and other receivables that are determined to be uncollectable due to reasons such as termination of operations or bankruptcy.
---	---
(3)	The Group applies the practical expedient that allows the Group to estimate the loss allowance for accounts receivable – trade at an amount equal to the lifetime expected credit losses. The expected credit losses include the forward-looking information. To make the assessment, the Group uses its historical credit loss experience over the past three years and classifies the accounts receivable – trade by their credit risk characteristics and days overdue. Details of loss allowance on accounts receivable – trade as of December 31, 2023 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---	---	---	---	---	---
		Less than<br> 6 months			6 months ~<br><br> <br>1 year			1 ~ 3<br><br> <br>years			More than<br> 3 years
Telecommunications service revenue	Expected credit loss rate		1.51	%		69.24	%		88.55	%		99.99	%
	Gross amount	W	1,467,781			48,329			139,925			21,545
	Loss allowance		22,130			33,461			123,906			21,542
Other revenue	Expected credit loss rate		2.30	%		28.27	%		53.39	%		93.51	%
	Gross amount	W	516,401			4,100			11,378			24,127
	Loss allowance		11,903			1,159			6,075			22,561

As the Group is a wireless and fixed-line telecommunications service provider, the Group’s financial assets measured at amortized cost primarily consist of receivables from numerous individual customers, therefore, no significant credit concentration risk arises.

Receivables related to other revenue mainly consist of receivables from corporate customers. The Group transacts only with corporate customers with credit ratings that are considered to be low at credit risk. In addition, the Group is not exposed to significant credit concentration risk as the Group regularly assesses their credit risk by monitoring their credit rating. While the contract assets are under the impairment requirements, no significant credit risk has been identified.

7.	Prepaid expenses

The Group pays commissions to its retail stores and authorized dealers, primarily for wireless telecommunication services based on their performance of attracting new customers and renewing contracts with existing customers, and recognizes costs that would not occur in case of not signing contracts with new and existing customers as prepaid expenses among the commissions. These prepaid expenses are amortized on a straight-line basis over the periods that the Group expects to maintain its customers.

F-51

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

7.	Prepaid expenses, Continued
(1)	Details of prepaid expenses as of December 31, 2023 and 2022 are as follows:
---	---
(In millions of won)
---	---	---	---	---
	December 31, 2023		December 31, 2022
Current assets:
Incremental costs of obtaining contracts	W	1,882,296		1,888,182
Others		71,473		86,133
	W	1,953,769		1,974,315
Non-current assets:
Incremental costs of obtaining contracts	W	1,022,813		996,180
Others		63,294		77,242
	W	1,086,107		1,073,422
(2)	Incremental costs of obtaining contracts
---	---

The amortization in connection with incremental costs of obtaining contracts recognized for the years ended December 31, 2023, 2022 and 2021 are as follows:

(In millions of won)
	2023		2022		2021(*)
Amortization recognized	W	2,505,724		2,485,593		2,634,134
(*)	Includes amounts related to discontinued operations.
---	---
8.	Contract Assets and Liabilities
---	---

In case of providing both wireless telecommunication services and sales of handsets, the Group allocated the consideration based on relative stand-alone selling prices and recognized unbilled receivables from handset sales as contract assets. The Group recognized receipts in advance for prepaid telecommunications services and unearned revenue for customer loyalty programs as contract liabilities.

(1)	Details of contract assets and liabilities as of December 31, 2023 and 2022 are as follows:
(In millions of won)
---	---	---	---	---
	December 31, 2023		December 31, 2022
Contract assets:
Allocation of consideration between performance obligations	W	129,771		132,221
Contract liabilities:
Wireless service contracts		19,149		18,544
Customer loyalty programs		7,164		7,706
Fixed-line service contracts		146,106		136,880
Others		40,074		70,792
	W	212,493		233,922

F-52

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

8.	Contract Assets and Liabilities, Continued
(2)	The amount of revenue recognized for the years ended December 31, 2023 and 2022 related to the contract liabilities carried forward from the prior periods are <br>W<br>141,460 million and <br>W<br>109,867 million, respectively. Details of revenue expected to be recognized from contract liabilities as of December 31, 2023 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---
	Less than<br> 1 year		1 ~ 2 years		More than<br><br> <br>2 years		Total
Wireless service contracts	W	19,149		—		—		19,149
Customer loyalty programs		5,717		969		478		7,164
Fixed-line service contracts		93,587		9,502		43,017		146,106
Others		37,124		2,950		—		40,074
	W	155,577		13,421		43,495		212,493
9.	Inventories
---	---
(1)	Details of inventories as of December 31, 2023 and 2022 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	December 31, 2023							December 31, 2022
	Acquisition<br>cost		Valuation<br>allowance			Carrying<br>amount		Acquisition<br>cost		Valuation<br><br><br>allowance			Carrying<br>amount
Merchandise	W	174,255		(7,641	)		166,614		156,919		(5,616	)		151,303
Supplies		13,195		—			13,195		15,052		—			15,052
	W	187,450		(7,641	)		179,809		171,971		(5,616	)		166,355
(2)	The amount of the inventory write-downs and write-off of inventories charged to statement of income are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---	---
	2023			2022			2021(*)
Charged to cost of products that have been resold	W	2,033			2,297			(3,287	)
Write-off upon sale		(8	)		(756	)		(347	)
(*)	Includes amounts related to discontinued operations.
---	---

There are no significant reversals of inventory write-downs for the periods presented.

(3)	Inventories recognized as operating expenses for the years ended December 31, 2023, 2022, and 2021 are <br>W<br>1,264,302 million, <br>W<br>1,266,271 million, and <br>W<br>1,417,339 million, respectively, which are included in the cost of goods sold. The amount for the year ended December 31, 2021 include profit or loss from discontinued operations.

F-53

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

10.	Long-term Investment Securities

Details of long-term investment securities as of December 31, 2023 and 2022 are as follows:

(In millions of won)
	Category		December 31, 2023		December 31, 2022
Equity instruments		FVOCI(*)	W	1,398,734		1,189,597
		FVTPL		8		44,440
				1,398,742		1,234,037
Debt instruments		FVTPL		280,642		176,699
				280,642		176,699
			W	1,679,384		1,410,736
(*)	The Group designated investments in equity instruments that are not held for trading as financial assets at FVOCI, and the amounts <br>of<br> those equity instruments as of December 31, 2023 and 2022 are <br>W<br>1,398,734 million and <br>W<br>1,189,597 million, respectively.
---	---
11.	Business Combinations
---	---
(1)	2023
---	---

There were no changes in the Group due to the business combinations for the year ended December 31, 2023.

(2)	2022
1)	Acquisition of SK m&service Co., Ltd. by PS&Marketing Corporation:
---	---

PS&Marketing Corporation obtained control over SK m&service Co., Ltd. by acquiring its 3,099,112 shares (100%) for the year ended December 31, 2022. As this transaction is a business combination under common control, the assets acquired and liabilities assumed were recognized at the carrying amounts in the ultimate controlling entity’s consolidated financial statements, and the difference between the consideration transferred and the carrying amounts of net assets was recognized as capital surplus and others. Subsequent to the acquisition of control, SK m&service Co., Ltd. recognized W 211,081 million of revenue and W 4,157 million of net profit for the year ended December 31, 2022. In addition, assuming that the business combination occurred as of January 1, 2022, the Group would have been recognized W 250,108 million of revenue and W 4,695 million of net profit for the year ended December 31, 2022.

(i)	Summary of the acquiree
	Information of acquiree
---	---
Corporate name	SK m&service Co., Ltd.
Location	16<br>th<br> floor, 34, Supyo-ro, Jung-gu, Seoul, Korea
CEO	Park, Jeong-Min
Industry	Database and internet website service

F-54

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

11.	Business Combinations, Continued
(2)	2022, Continued
---	---
1)	Acquisition of SK m&service Co., Ltd. by PS&Marketing Corporation, Continued:
---	---
(ii)	Considerations transferred, identifiable assets acquired and liabilities assumed as of the acquisition date are as follows:
---	---
(In millions of won)
---	---	---	---
	Amounts
I. Consideration transferred:
Cash and cash equivalents	W	72,859
II. Fair value of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents		10,547
Accounts receivable – trade and other, net		76,035
Inventories, net		3,349
Property and equipment, net		27,138
Intangible assets, net		12,462
Goodwill		2,516
Other assets		10,394
Accounts payable – trade and other		(53,894	)
Income tax payable		(399	)
Lease liabilities		(6,503	)
Provisions		(991	)
Defined benefit liabilities		(2,739	)
Other liabilities		(18,337	)
		59,578
III. Capital surplus and others (I - II)	W	13,281
(<br>3<br>)	2021
---	---
1)	Merger of ADT CAPS Co., Ltd. by SK Shieldus Co., Ltd. (Formerly, ADT CAPS Co, Ltd., at the time of merger, SK Infosec Co., Ltd.):
---	---

On March 4, 2021, SK Infosec Co., Ltd. merged with ADT CAPS Co., Ltd., a subsidiary of SK Infosec Co., Ltd., to improve management efficiency. As this transaction is a business combination under common control, the acquired assets and liabilities were recognized at the carrying amounts in the ultimate controlling entity’s consolidated financial statements and there is no effect on the assets and liabilities of the consolidated financial statements. After the date of the merger, SK Infosec Co., Ltd. changed its name to ADT CAPS Co., Ltd. and then again, in October 2021, ADT CAPS Co., Ltd. changed its name to SK Shieldus Co., Ltd.

Identifiable assets acquired and liabilities assumed were transferred to the spin-off company.

2)	Acquisition of Studio Dolphin Co., Ltd. by Dreamus Company:

Dreamus Company obtained control by acquiring 10,000 shares(100%) of Studio Dolphin Co., Ltd. for the year ended December 31, 2021. The consideration transferred was W 1,500 million in cash and the difference between the fair value of net assets acquired and the consideration

F-55

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

11.	Business Combinations, Continued
(<br>3<br>)	2021, Continued
---	---
2)	Acquisition of Studio Dolphin Co., Ltd. by Dreamus Company, Continued:
---	---

transferred amounting to W 1,465 million was recognized as goodwill. Subsequent to the acquisition of control, Studio Dolphin Co., Ltd. recognized revenue of W 245 million and net loss of W 304 million and the amounts are included in profit or loss from discontinued operations.

Identifiable assets acquired, liabilities assumed and goodwill were transferred to spin-off company.

(i)	Summary of the acquiree
	Information of acquiree
---	---
Corporate name	Studio Dolphin Co., Ltd.
Location	3<br>rd<br> floor, 10, Jandari-ro 7an-gil, Mapo-gu, Seoul, Korea
CEO	Kim, Dong-Hee
Industry	Music and sound recording business
(ii)	Considerations transferred, identifiable assets acquired and liabilities assumed as of the acquisition date are as follows:
---	---
(In millions of won)
---	---	---	---
	Amounts
I. Consideration transferred:
Cash and cash equivalents	W	1,500
II. Fair value of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents		20
Accounts receivable – trade and other		31
Other assets		7
Accounts payable – trade and other		(4	)
Short-term borrowings		(2	)
Other liabilities		(17	)
		35
III. Goodwill (I - II)	W	1,465
3)	Acquisition of YLP Inc. by Tmap Mobility Co., Ltd.:
---	---

Tmap Mobility Co., Ltd. obtained control by acquiring 168,012 shares (100%) of YLP Inc. during the year ended December 31, 2021. The consideration transferred was W 79,000 million, among which W 55,598 million was paid in cash to acquire 118,242 shares (70.4%) and on June 29, 2021, Tmap Mobility Co., Ltd. issued 267,700 of its new common shares (with a fair value of W 23,402 million) to the shareholders of YLP Inc. in exchange for the remaining 49,770 shares (29.6%) owned by those shareholders. The difference between the fair value of net assets acquired and the

F-56

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

11.	Business Combinations, Continued
(<br>3<br>)	2021, Continued
---	---
3)	Acquisition of YLP Inc. by Tmap Mobility Co., Ltd., Continued:
---	---

consideration transferred amounting to W 69,516 million was recognized as goodwill. Subsequent to the acquisition of control, YLP Inc. recognized revenue of W 20,488 million and net loss of W 1,632 million and the amounts are included in profit or loss from discontinued operations.

Identifiable assets acquired, liabilities assumed and goodwill were transferred to spin-off company.

(i)	Summary of the acquiree
	Information of acquiree
---	---
Corporate name	YLP Inc.
Location	1740, Cheongwon-ro, Pyeongtaek-si, Gyeonggi-do, Korea
CEO	Lee, Hyeok-Ju
Industry	Freight forwarders and cargo agents
(ii)	Considerations transferred, identifiable assets acquired and liabilities assumed as of the acquisition date are as follows:
---	---
(In millions of won)
---	---	---	---
	Amounts
I. Consideration transferred:
Cash and cash equivalents	W	55,598
Fair value of shares of Tmap Mobility Co., Ltd.		23,402
II. Fair value of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents		1,897
Financial instruments		4,000
Accounts receivable – trade and other, net		4,480
Property and equipment, net		431
Intangible assets, net		3,595
Other assets		325
Borrowings		(1,000	)
Accounts payable – trade and other		(3,542	)
Lease liabilities		(327	)
Other liabilities		(48	)
Deferred tax liabilities		(327	)
		9,484
III. Goodwill (I - II)	W	69,516

F-57

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

11.	Business Combinations, Continued
(<br>3<br>)	2021, Continued
---	---
4)	Acquisition of Rokmedia Co., Ltd. by Onestore Co., Ltd.:
---	---

Onestore Co., Ltd. obtained control by acquiring 60,000 shares (100%) of Rokmedia Co., Ltd. for the year ended December 31, 2021. The consideration transferred was W 40,000 million in cash and the difference between the fair value of net assets acquired and the consideration transferred amounting to W 33,641 million was recognized as goodwill. Subsequent to the acquisition of control, Rokmedia Co., Ltd. recognized revenue of W 10,915 million and net profit of W 1,066 million and the amounts are included in profit or loss from discontinued operation.

Identifiable assets acquired, liabilities assumed and goodwill were transferred to spin-off company.

(i)	Summary of the acquiree
	Information of acquiree
---	---
Corporate name	Rokmedia Co., Ltd.
Location	3<br>rd<br> floor, 330, Seongam-ro, Mapo-gu, Seoul, Korea
CEO	Kang, Jun-Gyu / Kim, Jeong-Su
Industry	Publishing and telecommunications retail business

F-58

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

11.	Business Combinations, Continued
(<br>3<br>)	2021, Continued
---	---
4)	Acquisition of Rokmedia Co., Ltd. by Onestore Co., Ltd., Continued:
---	---
(ii)	Considerations transferred, identifiable assets acquired and liabilities assumed as of the acquisition date are as follows:
---	---
(In millions of won)
---	---	---	---
	Amounts
I. Consideration transferred:
Cash and cash equivalents	W	40,000
II. Fair value of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents		719
Financial instruments		2,170
Accounts receivable – trade and other, net		1,374
Inventories		933
Other assets		3,212
Short-term loans, net		30
Property and equipment, net		792
Intangible assets, net		2,677
Accounts payable – trade and other		(1,885	)
Contract liabilities		(1,401	)
Borrowings		(1,485	)
Provisions		(385	)
Lease liabilities		(56	)
Other liabilities		(111	)
Deferred tax liabilities		(135	)
Income tax payable		(90	)
		6,359
III. Goodwill (I - II)	W	33,641
5)	Acquisition of GOOD SERVICE Co., Ltd. by Tmap Mobility Co., Ltd.:
---	---

Tmap Mobility Co., Ltd. obtained control by acquiring 2,000 shares (100%) of GOOD SERVICE Co., Ltd. for the year ended December 31, 2021. The consideration transferred was W 10,000 million in cash and the difference between the fair value of net assets acquired and the consideration transferred amounting to W 4,844 million was recognized as goodwill. Subsequent to the acquisition of control, GOOD SERVICE Co., Ltd. recognized revenue of W 1,063 million and net profit of W 621 million and the amounts are included in profit or loss from discontinued operations.

Identifiable assets acquired, liabilities assumed and goodwill were transferred to spin-off company.

F-59

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

11.	Business Combinations, Continued
(<br>3<br>)	2021, Continued
---	---
5)	Acquisition of GOOD SERVICE Co., Ltd. by Tmap Mobility Co., Ltd., Continued:
---	---
(i)	Summary of the acquiree
---	---
	Information of acquiree
---	---
Corporate name	GOOD SERVICE Co., Ltd.
Location	4<br>th<br> floor, 54, Daeheung-ro, Mapo-gu, Seoul, Korea
CEO	Kim, Seung-Wook
Industry	Surrogate driving service business and related business
(ii)	Considerations transferred, identifiable assets acquired and liabilities assumed as of the acquisition date are as follows:
---	---
(In millions of won)
---	---	---	---
	Amounts
I. Consideration transferred:
Cash and cash equivalents	W	10,000
II. Fair value of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents		1,328
Financial instruments		116
Accounts receivable – trade and other, net		1,881
Property and equipment, net		116
Intangible assets, net		3,492
Accounts payable – trade and other		(883	)
Other liabilities		(85	)
Deferred tax liabilities		(696	)
Lease liabilities		(113	)
		5,156
III. Goodwill (I - II)	W	4,844

F-60

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

12.	Investments in Associates and Joint Ventures
(1)	Investments in associates and joint ventures accounted for using the equity method as of December 31, 2023 and 2022 are as follows:
---	---
(In millions of won)		December 31, 2023				December 31, 2022
---	---	---	---	---	---	---	---	---	---
	Country	Ownership<br><br> <br>(%)		Carrying<br> amount		Ownership<br> (%)		Carrying<br> amount
Investments in associates:
SK China Company Ltd.	China		27.3		896,990		27.3	W	879,527
Korea IT Fund(*1)	Korea		63.3		336,404		63.3		324,860
UniSK	China		49.0		22,285		49.0		20,839
SK Technology Innovation Company	Cayman Islands		49.0		70,409		49.0		69,375
SK MENA Investment B.V.	Netherlands		32.1		14,872		32.1		14,296
SK Latin America Investment S.A.	Spain		32.1		14,607		32.1		11,961
SK South East Asia Investment Pte. Ltd.	Singapore		20.0		355,282		20.0		357,537
Citadel Pacific Telecom Holdings, LLC(*2)	USA		15.0		45,901		15.0		48,542
SM. Culture & Contents Co., Ltd.(*3)	Korea		22.8		41,578		23.1		59,611
Invites Genomics Co., Ltd.(*4)<br> (Formerly, Invites Healthcare Co., Ltd.)	Korea		31.1		—		31.1		—
Nam Incheon Broadcasting Co., Ltd.	Korea		27.3		14,344		27.3		13,575
Home Choice Corp.(*2)	Korea		17.8		3,215		17.8		4,456
Konan Technology Inc.	Korea		20.7		6,349		20.8		8,366
CMES Inc.(*2)	Korea		7.7		900		7.7		900
SK telecom Japan Inc.(*5)	Japan		33.0		1,239		—		—
12CM JAPAN and others(*2,6,7)	—		—		81,142		—		69,734
					1,905,517				1,883,579
Investments in joint ventures:
UTC Kakao-SK Telecom ESG Fund(*8)	Korea		48.2		9,495		48.2		5,710
					9,495				5,710
					1,915,012			W	1,889,289
(*1)	Investment in Korea IT Fund was classified as investment in associates as the Group does not have control over the investee under the contractual agreement with other shareholders.
---	---
(*2)	These investments were classified as investments in associates as the Group can exercise significant influence through its right to appoint the members of the Board of Directors even though the Group has less than 20% of equity interests.
---	---
(*3)	The Group recognized an impairment loss of <br>W<br>18,755 million as the recoverable amount was assessed to be less than the carrying amount for the year ended December 31, 2023.
---	---

F-61

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

12.	Investments in Associates and Joint Ventures, Continued
(1)	Investments in associates and joint ventures accounted for using the equity method as of December 31, 2023 and 2022 are as follows, Continued:
---	---
(*4)	The Group recognized the carrying amount of investments in Invites Genomics Co., Ltd. (Formerly, Invites Healthcare Co., Ltd.) in its entirety as an impairment loss for the year ended December 31, 2022.
---	---
(*5)	The Group disposed of a portion of shares in SK telecom Japan Inc., which was a subsidiary of the Parent Company, to SK hynix Inc. and SK Square Co., Ltd. for <br>W<br>4,900 million in cash, from which it recognized <br>W<br>998 million of loss relating to investments in subsidiaries for the year ended December 31, 2023, and the remaining ownership interest is reclassified as investments in associates as of December 31, 2023.
---	---
(*6)	The Group additionally contributed <br>W<br>6,000 million of investment in KB ESG Fund of the three telecommunications companies, <br>W<br>28 million in F&U Credit information Co., Ltd., <br>W<br>215 million of investment in KDX Korea Data Exchange, <br>W<br>132 million of investment in SK Venture Capital, LLC, and <br>W<br>261 million of investment in Walden SKT Venture Fund for the year ended December 31, 2023. Also, the Group obtained significant influence by contributing <br>W<br>6,500 million to Telecom Daean Evaluation Jun B Corporation Co., Ltd., and <br>W<br>520 million to Covet Co., Ltd., for the year ended December 31, 2023.
---	---
(*7)	The Group disposed of a portion of shares in Start-up Win-Win Fund for <br>W<br>550 million and a portion of SK-KNET Youth Startup Investment Cooperative for <br>W<br>4,400 million in cash for the year ended December 31, 2023.
---	---
(*8)	The Group additionally contributed <br>W<br>4,000 million in cash to the investee for the year ended December 31, 2023, but there is no change in the ownership interest. The Group has joint control over the investee pursuant to the agreement with the other shareholders, thus the investment in the investee was classified as investments in joint ventures.
---	---
(2)	The market value of investments in listed associates as of December 31, 2023 and 2022 are as follows:
---	---
(In millions of won, except for share data)
---	---	---	---	---	---	---	---	---	---	---	---	---
	December 31, 2023						December 31, 2022
	Market price<br> per share<br> (in won)		Number of<br> shares		Market<br> value		Market price<br><br> <br>per share<br><br> <br>(in won)		Number of<br> shares		Market<br> value
SM. Culture & Contents Co., Ltd.	W	1,887		22,033,898		41,578		2,960		22,033,898		65,220
Konan Technology Inc.		32,600		2,359,160		76,909		28,250		1,179,580		33,323

F-62

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

12.	Investments in Associates and Joint Ventures, Continued
(3)	The condensed financial information of material associates as of and for the years ended December 31, 2023, 2022 and 2021 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---	---
	Korea IT<br> Fund			SK China<br><br> <br>Company Ltd.(*)			SK South East Asia<br> Investment Pte. Ltd.(*)
	As of December 31, 2023
Current assets	W	128,344			1,350,607			213,522
Non-current assets		402,819			1,987,252			3,034,553
Current liabilities		—			99,083			502,728
Non-current liabilities		—			252,100			13,586
	2023
Revenue	W	33,017			70,126			76,686
Profit (loss) for the year		16,330			87,462			(66,169	)
Other comprehensive income (loss)		5,316			(56,660	)		2,779
Total comprehensive income (loss)		21,646			30,802			(63,390	)
(In millions of won)
	Korea IT<br> Fund			SK China<br><br> <br>Company Ltd.(*)			SK South East Asia<br> Investment Pte. Ltd.(*)
	As of December 31, 2022
Current assets	W	98,132			1,223,426			146,589
Non-current assets		414,804			2,050,001			3,034,335
Current liabilities		—			76,654			488,132
Non-current liabilities		—			276,525			—
	2022
Revenue	W	19,916			62,334			72,658
Profit (loss) for the year		7,505			(11,681	)		(17,504	)
Other comprehensive income (loss)		(11,779	)		58,034			(34,220	)
Total comprehensive income (loss)		(4,274	)		46,353			(51,724	)

F-63

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

12.	Investments in Associates and Joint Ventures, Continued
(3)	The condensed financial information of material associates as of and for the years ended December 31, 2023, 2022 and 2021 are as follows, Continued:
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---	---	---
	HanaCard<br> Co., Ltd.(*)		Korea IT<br><br> <br>Fund			SK China<br><br> <br>Company Ltd.(*)		SK South East Asia<br> Investment Pte.<br> Ltd.(*)
	As of December 31, 2021
Current assets	W	9,130,044		117,172			1,124,219		133,110
Non-current assets		465,333		419,632			1,849,102		2,853,184
Current liabilities		1,281,783		—			53,199		412,962
Non-current liabilities		6,284,587		—			316,470		—
	2021
Revenue	W	1,270,568		58,741			80,241		9,945
Profit (loss) for the year		250,484		50,107			933,475		(188,678	)
Other comprehensive income (loss)		909		(6,847	)		326,661		304,700
Total comprehensive income		251,393		43,260			1,260,136		116,022
(*)	The financial information of HanaCard Co., Ltd., SK China Company Ltd. and SK South East Asia Investment Pte. Ltd. are consolidated financial information.
---	---
(4)	There are no material joint ventures as of December 31, 2023, 2022 and 2021.
---	---

F-64

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

12.	Investments in Associates and Joint Ventures, Continued
(5)	Reconciliations of financial information of material associates to carrying amounts of investments in associates in the consolidated financial statements as of December 31, 2023 and 2022 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---	---	---
	December 31, 2023
	Net assets		Ownership<br> interests (%)		Net assets<br> attributable<br> to the<br> ownership<br> interests		Cost-book<br> value<br> differentials		Carrying<br> amount
Korea IT Fund	W	531,163		63.3		336,404		—		336,404
SK China Company Ltd.		2,986,676		27.3		814,503		82,487		896,990
SK South East Asia Investment Pte. Ltd.(*)		1,776,411		20.0		355,282		—		355,282
(In millions of won)
	December 31, 2022
	Net assets		Ownership<br> interests (%)		Net assets<br> attributable<br> to the<br> ownership<br> interests		Cost-book<br> value<br> differentials		Carrying<br> amount
Korea IT Fund	W	512,936		63.3		324,860		—		324,860
SK China Company Ltd.		2,920,248		27.3		796,387		83,140		879,527
SK South East Asia Investment Pte. Ltd.(*)		1,787,685		20.0		357,537		—		357,537
(*)	Net assets of these entities represent net assets excluding those attributable to their non-controlling interests.
---	---

F-65

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

12.	Investments in Associates and Joint Ventures, Continued
(6)	Details of the changes in investments in associates and joint ventures accounted for using the equity method for the years ended December 31, 2023 and 2022 are as follows:
---	---
(In millions of won)	2023
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Beginning<br> balance		Acquisition<br> and<br> Disposal			Share<br> of<br> profit<br><br> <br>(loss)			Other<br><br> <br>compre-<br> hensive<br><br> <br>income<br> (loss)			Other<br> increase<br><br> <br>(decrease)			Ending<br> balance
Investments in associates:
SK China Company Ltd.	W	879,527		—			24,054			(6,591	)		—			896,990
Korea IT Fund(*1)		324,860		—			10,343			3,366			(2,165	)		336,404
UniSK(*1)		20,839		—			2,079			102			(735	)		22,285
SK Technology Innovation Company		69,375		—			(178	)		1,212			—			70,409
SK MENA Investment B.V.		14,296		—			335			241			—			14,872
SK Latin America Investment S.A.		11,961		—			1,974			672			—			14,607
SK South East Asia Investment Pte. Ltd.		357,537		—			(12,881	)		10,626			—			355,282
Citadel Pacific Telecom Holdings, LLC(*1)		48,542		—			2,628			637			(5,906	)		45,901
SM. Culture & Contents Co., Ltd.(*2)		59,611		(679	)		593			808			(18,755	)		41,578
Nam Incheon Broadcasting Co., Ltd.(*1)		13,575		—			905			—			(136	)		14,344
Home Choice Corp.		4,456		—			(1,241	)		—			—			3,215
Konan Technology Inc.		8,366		(44	)		(2,100	)		127			—			6,349
CMES Inc.		900		—			—			—			—			900
SK telecom Japan Inc.(*3)		—		—			—			—			1,239			1,239
12CM JAPAN and others(*1,4)		69,734		8,706			5,108			(2,264	)		(142	)		81,142
		1,883,579		7,983			31,619			8,936			(26,600	)		1,905,517
Investments in joint ventures:
UTC Kakao-SK Telecom ESG Fund		5,710		4,000			(215	)		—			—			9,495
		5,710		4,000			(215	)		—			—			9,495
	W	1,889,289		11,983			31,404			8,936			(26,600	)		1,915,012
(*1)	Dividends received from the associates are deducted from the carrying amount for the year ended December 31, 2023.
---	---
(*2)	The Group recognized <br>W<br>18,755 million of impairment loss for the year ended December 31, 2023.
---	---
(*3)	The Group disposed of a portion of shares in SK telecom Japan Inc., which was a subsidiary of the Parent Company, resulting in the reclassification of the remaining shares as an investment in associate for the year ended December 2023.
---	---
(*4)	The acquisition for the year ended December 31, 2023 includes <br>W<br>6,500 million of investment in Telecom Daean Evaluation Jun B Corporation Co., Ltd., <br>W<br>6,000 million of investment in KB ESG Fund of the three telecommunications companies, <br>W<br>215 million of investment in KDX Korea Data Exchange, <br>W<br>132 million of investment in SK Venture Capital, LLC, <br>W<br>261 million of investment in Walden SKT Venture Fund, <br>W<br>520 million of investment in Covet Co., Ltd., and <br>W<br>28 million of investment in F&U Credit information Co., Ltd. The disposal for the year ended December 31, 2023
---	---

F-66

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

12.	Investments in Associates and Joint Ventures, Continued
(6)	Details of the changes in investments in associates and joint ventures accounted for using the equity method for the years ended December 31, 2023 and 2022 are as follows, Continued:
---	---
includes a portion of shares in Start-up Win-Win Fund for <br>W<br>550 million and a portion of SK-KNET Youth Startup Investment Cooperative for <br>W<br>4,400 million for the year ended December 31, 2023.
---
(In millions of won)	2022
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Beginning<br> balance		Acquisition<br> and<br> Disposal			Share<br> of<br> profit<br><br> <br>(loss)			Other<br><br> <br>compre-<br> hensive<br><br> <br>income<br> (loss)			Other<br> increase<br><br> <br>(decrease)			Ending<br> balance
Investments in associates:
SK China Company Ltd.	W	793,754		—			(19,395	)		105,168			—			879,527
Korea IT Fund(*1)		339,976		—			4,753			(7,459	)		(12,410	)		324,860
HanaCard Co., Ltd.		349,866		(368,389	)		17,749			774			—			—
UniSK		19,156		—			2,424			(741	)		—			20,839
SK Technology Innovation Company		86,301		—			(22,923	)		5,997			—			69,375
SK MENA Investment B.V.		15,343		—			(2,059	)		1,012			—			14,296
SK Latin America Investment S.A.		14,004		—			(2,083	)		40			—			11,961
SK South East Asia Investment Pte. Ltd.		348,782		—			(6,975	)		15,730			—			357,537
Citadel Pacific Telecom Holdings, LLC		43,789		—			2,890			1,863			—			48,542
SM. Culture & Contents Co., Ltd.		60,261		37			(756	)		69			—			59,611
Digital Games International Pte. Ltd.		2,208		(1,757	)		(562	)		111			—			—
Invites Genomics Co., Ltd.(*2)<br> (Formerly, Invites Healthcare Co., Ltd.)		26,474		—			(11,759	)		(74	)		(14,641	)		—
Nam Incheon Broadcasting Co., Ltd.(*1)		12,525		—			1,186			—			(136	)		13,575
Home Choice Corp.		3,052		—			1,403			1			—			4,456
Konan Technology Inc.		3,639		5,451			(710	)		(14	)		—			8,366
CMES Inc.(*3)		—		—			—			—			900			900
12CM JAPAN and others(*4)		68,966		1,873			1,245			—			(2,350	)		69,734
		2,188,096		(362,785	)		(35,572	)		122,477			(28,637	)		1,883,579
Investments in joint ventures:
Finnq Co., Ltd.		7,255		(3,840	)		(3,617	)		202			—			—
UTC Kakao-SK Telecom ESG Fund		2,000		4,000			(290	)		—			—			5,710
		9,255		160			(3,907	)		202			—			5,710
	W	2,197,351		(362,625	)		(39,479	)		122,679			(28,637	)		1,889,289
(*1)	Dividends received from the associates are deducted from the carrying amount for the year ended December 31, 2022.
---	---
(*2)	The Group recognized <br>W<br>14,641 million of impairment loss for the year ended December 31, 2022.
---	---
(*3)	As the Group obtained significant influence over the investee, <br>W<br>900 million of financial assets at FVOCI are reclassified to investments in associates for the year ended December 31, 2022.
---	---

F-67

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

12.	Investments in Associates and Joint Ventures, Continued
(6)	Details of the changes in investments in associates and joint ventures accounted for using the equity method for the years ended December 31, 2023 and 2022 are as follows, Continued:
---	---
(*4)	The acquisition for the year ended December 31, 2022 includes <br>W<br>2,000 million of cash investment in Smart SKT Infinitum Game Fund, <br>W<br>4,000 million of cash investment in KB ESG Fund of three telecommunications companies and <br>W<br>12 million of cash investment in SK Venture Capital, LLC. The disposal for the year ended December 31, 2022 includes <br>W<br>4,850 million relating to disposal of the part of shares of Start-up Win-Win Fund and <br>W<br>1,080 million relating to disposal of the part of shares of Daekyo Wipoongdangdang Contents Korea Fund. In addition, dividends amounting to <br>W<br>1,290 million received from Start-up Win-Win Fund deducted from the carrying amount for the year ended December 31, 2022.
---	---
(7)	The Group discontinued the application of equity method to the following investees due to their carrying amounts being reduced to zero. The details of cumulative unrecognized equity method losses as of December 31, 2023 are as follows:
---	---
(In millions of won)	Unrecognized loss				Unrecognized change<br> in equity
---	---	---	---	---	---	---	---	---	---
	2023		Cumulative<br> loss		2023		Cumulative<br> loss
Invites Genomics Co., Ltd.<br> (Formerly, Invites Healthcare Co., Ltd.)	W	7,844		7,844		1,179		1,179
Daehan Kanggun BcN Co., Ltd. and others		—		5,780		—		(124	)
	W	7,844		13,624		1,179		1,055
13.	Property and Equipment
---	---
(1)	Property and equipment as of December 31, 2023 and 2022 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---	---	---
	December 31, 2023
	Acquisition cost		Accumulated<br> depreciation			Accumulated<br> impairment loss			Carrying amount
Land	W	1,248,200		—			—			1,248,200
Buildings		1,775,563		(1,001,721	)		(450	)		773,392
Structures		941,868		(705,388	)		(1,601	)		234,879
Machinery		37,688,793		(29,796,000	)		(2,139	)		7,890,654
Other		1,757,617		(1,271,597	)		(863	)		485,157
Right-of-use assets		2,549,003		(933,567	)		(3,485	)		1,611,951
Construction in progress		761,963		—			—			761,963
	W	46,723,007		(33,708,273	)		(8,538	)		13,006,196

F-68

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

13.	Property and Equipment, Continued
(In millions of won)
---	---	---	---	---	---	---	---	---	---	---
	December 31, 2022
	Acquisition cost		Accumulated<br> depreciation			Accumulated<br> impairment<br> loss			Carrying amount
Land	W	1,005,857		—			—			1,005,857
Buildings		1,736,257		(950,582	)		(450	)		785,225
Structures		935,276		(668,019	)		(1,601	)		265,656
Machinery		37,100,715		(29,185,881	)		(1,934	)		7,912,900
Other		1,771,890		(1,273,655	)		(841	)		497,394
Right-of-use assets		2,555,685		(766,350	)		(3,206	)		1,786,129
Construction in progress		1,069,331		—			—			1,069,331
	W	46,175,011		(32,844,487	)		(8,032	)		13,322,492
(2)	Changes in property and equipment for the years ended December 31, 2023 and 2022 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	2023
	Beginning<br> balance		Acquisition		Disposal			Transfer			Depreciation			Impairment			Ending balance
Land	W	1,005,857		12		(388	)		242,719			—			—			1,248,200
Buildings		785,225		1,083		(294	)		41,516			(54,138	)		—			773,392
Structures		265,656		1,632		(198	)		6,446			(38,657	)		—			234,879
Machinery		7,912,900		553,541		(7,267	)		1,734,474			(2,302,789	)		(205	)		7,890,654
Other		497,394		554,595		(1,205	)		(476,097	)		(89,506	)		(24	)		485,157
Right-of-use assets		1,786,129		345,761		(86,069	)		(23,436	)		(410,032	)		(402	)		1,611,951
Construction in progress		1,069,331		1,554,922		(26	)		(1,862,264	)		—			—			761,963
	W	13,322,492		3,011,546		(95,447	)		(336,642	)		(2,895,122	)		(631	)		13,006,196
(In millions of won)
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	2022
	Beginning<br> balance		Acquisition		Disposal			Transfer			Depreciation			Impairment			Business<br> combination(*)		Ending<br> balance
Land	W	972,800		79		(175	)		30,364			—			—			2,789		1,005,857
Buildings		794,453		1,071		(638	)		36,219			(54,463	)		—			8,583		785,225
Structures		291,279		2,288		(32	)		10,422			(38,301	)		—			—		265,656
Machinery		7,997,927		560,889		(49,586	)		1,696,447			(2,292,358	)		(419	)		—		7,912,900
Other		487,716		780,382		(938	)		(672,199	)		(105,730	)		(391	)		8,554		497,394
Right-of-use assets		1,559,333		720,932		(65,961	)		(27,579	)		(403,794	)		(3,133	)		6,331		1,786,129
Construction in progress		767,751		1,564,345		(1,709	)		(1,261,937	)		—			—			881		1,069,331
	W	12,871,259		3,629,986		(119,039	)		(188,263	)		(2,894,646	)		(3,943	)		27,138		13,322,492
(*)	Includes assets acquired from the acquisition of SK m&service Co., Ltd. by PS&Marketing Corporation, a subsidiary of the Parent Company for the year ended December 31, 2022.
---	---

F-69

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

14.	Investment Property
(1)	Investment property as of December 31, 2023 and 2022 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	December 31, 2023							December 31, 2022
	Acquisition<br> cost		Accumulated<br> depreciation			Carrying<br><br> <br>amount		Acquisition<br><br> <br>cost		Accumulated<br> depreciation			Carrying<br><br> <br>amount
Land	W	14,199		—			14,199		6,115		—			6,115
Buildings		27,462		(17,220	)		10,242		21,490		(14,606	)		6,884
Right-of-use assets		16,975		(6,604	)		10,371		17,057		(4,919	)		12,138
	W	58,636		(23,824	)		34,812		44,662		(19,525	)		25,137
(2)	Changes in Investment property for the years ended December 31, 2023 and 2022 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---	---
	2023
	Beginning<br> balance		Transfer		Depreciation			Ending balance
Land	W	6,115		8,084		—			14,199
Buildings		6,884		5,343		(1,985	)		10,242
Right-of-use assets		12,138		473		(2,240	)		10,371
	W	25,137		13,900		(4,225	)		34,812
(In millions of won)
	2022
	Beginning<br> balance		Transfer		Depreciation			Ending balance
Land	W	6,071		44		—			6,115
Buildings		7,353		564		(1,033	)		6,884
Right-of-use assets		9,610		4,124		(1,596	)		12,138
	W	23,034		4,732		(2,629	)		25,137
(3)	The Group recognized lease income of <br>W<br>6,202 million and <br>W<br>5,222 million from investment property for the years ended December 31, 2023 and 2022, respectively.
---	---
(4)	The fair value of investment property is <br>W<br>70,138 million and <br>W<br>73,934 million as of December 31, 2023 and 2022, respectively.
---	---

F-70

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

15.	Leases
(1)	Group as a lessee
---	---
1)	Details of the right-of-use assets as of December 31, 2023 and 2022 are as follows:
---	---
(In millions of won)
---	---	---	---	---
	December 31, 2023		December 31, 2022
Right-of-use assets:
Land, buildings and structures	W	1,376,721		1,546,918
Others		235,230		239,211
	W	1,611,951		1,786,129
2)	Details of amounts recognized in the consolidated statements of income for the years ended December 31, 2023, 2022 and 2021 as a lessee are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---
	2023		2022		2021(*1)
Depreciation of right-of-use assets(*1):
Land, buildings and structures	W	346,931		346,499		338,304
Others(*2)		63,101		57,295		95,666
	W	410,032		403,794		433,970
Interest expense on lease liabilities	W	46,595		29,996		23,998
(*1)	Includes amounts related to discontinued operations.
---	---
(*2)	Others include the amount reclassified as research and development expenses related to the lease contract for research and development facilities.
---	---

Expenses related to short-term leases and leases of low-value assets that the Group recognized are immaterial.

3)	The total cash outflows due to lease payments for the years ended December 31, 2023, 2022 and 2021 amounted to <br>W<br>474,410 million, <br>W<br>449,196 million and <br>W<br>484,879 million, respectively. The amount for the year ended December 31, 2021 include cash flows from discontinued operations.

F-71

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

15.	Leases, Continued
(2)	Group as a lessor
---	---
1)	Finance lease
---	---

The Group recognized interest income of W 800 million, W 910 million and W 2,053 million on lease receivables for the years ended December 31, 2023, 2022 and 2021, respectively . The amount for the year ended December 31, 2021 include profit or loss from discontinued operations.

The following table sets out a maturity analysis for lease receivables, presenting the undiscounted lease payments to be received subsequent to December 31, 2023.

(In millions of won)
	Amount
Less than 1 year	W	11,499
1 ~ 2 years		3,306
2 ~ 3 years		1,517
3 ~ 4 years		693
4 ~ 5 years		271
Undiscounted lease payments	W	17,286
Unrealized finance income		360
Net investment in the lease		16,926
2)	Operating lease
---	---

The Group recognized lease income of W 235,988 million, W 246,279 million and W 230,140 million for the years ended December 31, 2023, 2022 and 2021, respectively, of which variable lease payments received are W 2,694 million, W 8,622 million and W 17,686 million, respectively.

The following table sets out a maturity analysis of lease payments, presenting the undiscounted fixed payments to be received subsequent to December 31, 2023.

(In millions of won)
	Amount
Less than 1 year	W	148,980
1 ~ 2 years		91,033
2 ~ 3 years		48,701
	W	288,714

F-72

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

16.	Goodwill
(1)	Goodwill as of December 31, 2023 and 2022 are as follows:
---	---
(In millions of won)
---	---	---	---	---
	December 31,<br> 2023		December 31,<br> 2022
Goodwill related to merger of Shinsegi Telecom, Inc.	W	1,306,236		1,306,236
Goodwill related to acquisition of SK Broadband Co., Ltd.		764,082		764,082
Other goodwill		4,691		4,691
	W	2,075,009		2,075,009
(2)	Details of the impairment testing of Goodwill as of December 31, 2023 is as follows:
---	---

Goodwill is allocated to the following CGUs for the purpose of impairment testing.

•	goodwill related to Shinsegi Telecom, Inc.(*1): Cellular services;
•	goodwill related to SK Broadband Co., Ltd.(*2): Fixed-line telecommunication services; and
---	---
•	other goodwill: Others.
---	---
(*1)	Goodwill related to merger of Shinsegi Telecom, Inc.
---	---

The recoverable amount of the CGU is based on its value in use calculated by applying the post-tax annual discount rate of 5.4% (2022: 6.7%) (pre-tax annual discount rate for 2023 and 2022: 8.4% and 9.0%) to the estimated future post-tax cash flows based on financial budgets for the next five years. An annual growth rate of 0.0% (2022: 0.0%) was applied for the cash flows expected to be incurred after five years and is not expected to exceed the long-term wireless telecommunication industry growth rate.

(*2)	Goodwill related to acquisition of SK Broadband Co., Ltd.

The recoverable amount of the CGU is based on its value in use calculated by applying the post-tax annual discount rate of 6.2% (2022: 6.7%) (pre-tax annual discount rate for 2023 and 2022: 7.9% and 8.5%) to the estimated future post-tax cash flows based on financial budgets for the next five years. An annual growth rate of 1.0% (2022: 1.0%) was applied for the cash flows expected to be incurred after five years and is not expected to exceed the long-term fixed-line telecommunication industry growth rate.

(3)	Details of the changes in goodwill for the years ended December 31, 2023 and 2022 are as follows:
(In millions of won)
---	---	---	---	---
	2023		2022
Beginning balance	W	2,075,009		2,072,493
Acquisition(*)		—		2,516
Ending balance	W	2,075,009		2,075,009
(*)	It consists of goodwill recognized as PS&Marketing Corporation’s acquisition of SK m&service Co., Ltd for the year ended December 31, 2022 (See Note 11).
---	---

Accumulated impairment losses amounted to

W 33,441 million as of December 31, 2023 and 2022.

F-73

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

17.	Intangible Assets
(1)	Intangible assets as of December 31, 2023 and 2022 are as follows:
---	---
(In millions of won)	December 31, 2023
---	---	---	---	---	---	---	---	---	---	---
	Acquisition<br> cost		Accumulated<br> amortization			Accumulated<br> impairment			Carrying<br> amount
Frequency usage rights(*1)	W	3,564,907		(1,958,301	)		—			1,606,606
Land usage rights		57,106		(56,519	)		—			587
Industrial rights		97,993		(34,141	)		(17,698	)		46,154
Development costs		14,815		(14,766	)		—			49
Facility usage rights		159,891		(145,578	)		—			14,313
Customer relations		505,063		(231,913	)		—			273,150
Club memberships(*2)		121,895		—			(24,709	)		97,186
Other(*3)		4,851,168		(4,020,886	)		(7,190	)		823,092
	W	9,372,838		(6,462,104	)		(49,597	)		2,861,137
(In millions of won)	December 31, 2022
	Acquisition<br> cost		Accumulated<br> amortization			Accumulated<br> impairment			Carrying<br> amount
Frequency usage rights(*1)	W	3,767,590		(1,499,158	)		(186,000	)		2,082,432
Land usage rights		59,389		(58,165	)		—			1,224
Industrial rights		94,238		(30,068	)		(12,378	)		51,792
Development costs		14,497		(14,213	)		—			284
Facility usage rights		157,651		(142,654	)		—			14,997
Customer relations		505,063		(204,882	)		—			300,181
Club memberships(*2)		116,401		—			(24,430	)		91,971
Other(*3)		4,627,565		(3,839,030	)		(6,506	)		782,029
	W	9,342,394		(5,788,170	)		(229,314	)		3,324,910
(*1)	The Parent Company was reassigned 800 MHz, 1.8 GHz and 2.1 GHz band of frequency licenses from the Ministry of Science and Information and Communication Technology (“ICT”) in exchange for <br>W<br>227,200 million, <br>W<br>547,800 million and <br>W<br>411,700 million, respectively, for the year ended December 31, 2021. The band of frequency was assigned to the Parent Company at the date of initial lump sum payment for the year ended December 31, 2021 and the annual payments in installment for the remaining balances are made in the next five years starting from the date of initial lump sum payment.
---	---
(*2)	Club memberships are classified as intangible assets with indefinite useful lives and are not amortized.
---	---
(*3)	Other intangible assets primarily consist of computer software and others.
---	---

F-74

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

17.	Intangible Assets, Continued
(2)	Changes in intangible assets for the years ended December 31, 2023 and 2022 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	2023
	Beginning<br> balance		Acquisition		Disposal			Transfer		Amortization			Impairment<br><br> <br>(*1)			Ending<br> balance
Frequency usage rights	W	2,082,432		—		—			—		(475,826	)		—			1,606,606
Land usage rights		1,224		155		(15	)		40		(817	)		—			587
Industrial rights		51,792		4,563		(350	)		—		(4,530	)		(5,321	)		46,154
Development costs		284		—		—			—		(234	)		(1	)		49
Facility usage rights		14,997		1,884		(16	)		981		(3,533	)		—			14,313
Customer relations		300,181		—		—			—		(27,031	)		—			273,150
Club memberships		91,971		7,619		(2,174	)		65		—			(295	)		97,186
Other		782,029		91,848		(1,752	)		294,567		(339,478	)		(4,122	)		823,092
	W	3,324,910		106,069		(4,307	)		295,653		(851,449	)		(9,739	)		2,861,137
(*1)	The Group recognized the difference between recoverable amount and the carrying amount of intangible assets amounting to <br>W<br>9,739 million as impairment loss for the year ended December 31, 2023.
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	2022
	Beginning<br> balance		Acquisition		Disposal			Transfer			Amortization			Impairment<br><br> <br>(*1)			Business<br> combination<br><br> <br>(*2)		Ending<br> balance
Frequency usage rights	W	2,559,689		—		—			—			(477,257	)		—			—		2,082,432
Land usage rights		2,732		—		—			—			(1,508	)		—			—		1,224
Industrial rights		55,954		13,428		(823	)		(103	)		(4,324	)		(12,343	)		3		51,792
Development costs		200		—		—			—			(573	)		—			657		284
Facility usage rights		17,874		1,396		(2	)		252			(4,523	)		—			—		14,997
Customer relations		327,257		—		—			—			(27,076	)		—			—		300,181
Club memberships		88,494		9,926		(7,113	)		—			—			(725	)		1,389		91,971
Other		817,569		108,144		(380	)		189,075			(342,776	)		(16	)		10,413		782,029
	W	3,869,769		132,894		(8,318	)		189,224			(858,037	)		(13,084	)		12,462		3,324,910
(*1)	The Group recognized the difference between recoverable amount and the carrying amount of intangible assets amounting to <br>W<br>13,084 million as impairment loss for the year ended December 31, 2022.
---	---
(*2)	Includes assets acquired from the acquisition of SK m&service Co., Ltd. by PS&Marketing Corporation, a subsidiary of the Parent Company for the year ended December 31, 2022.
---	---

F-75

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

17.	Intangible Assets, Continued
(3)	Research and development expenditures recognized as expense for the years ended December 31, 2023, 2022 and 2021 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---
	2023		2022		2021(*)
Research and development costs expensed as incurred	W	369,507		340,864		406,672
(*)	Includes amounts related to discontinued operations.
---	---
(4)	Details of frequency usage rights as of December 31, 2023 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---	---
	As of December 31, 2023
	Amount		Description	Commencement<br> of amortization		Completion of<br> amortization
800MHz license	W	109,789	LTE service		Jul. 2021		Jun. 2026
1.8GHz license		308,534	LTE service		Dec. 2021		Dec. 2026
2.6GHz license		364,250	LTE service		Sep. 2016		Dec. 2026
2.1GHz license		231,879	W-CDMA and LTE<br> service		Dec. 2021		Dec. 2026
3.5GHz license		592,154	5G service		Apr. 2019		Nov. 2028
	W	1,606,606
18.	Borrowings and Debentures
---	---
(1)	Short-term borrowings as of December 31, 2023 and 2022 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---
Lender	Annual<br> interest rate (%)	Maturity	December 31,<br> 2023		December 31,<br><br> <br>2022
BNK Securities. Co., Ltd.	—	—	W	—		100,000
KEB Hana Bank	—	—		—		30,000
Hana Financial Investment Co., Ltd.	—	—		—		4,642
DB Financial Investment Co., Ltd.	—	—		—		2,785
Shinhan Securities Co., Ltd.	—	—		—		5,571
			W	—		142,998

F-76

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

18.	Borrowings and Debentures, Continued
(2)	Long-term borrowings as of December 31, 2023 and 2022 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---	---	---
Lender	Annual<br> interest rate (%)		Maturity		December 31,<br> 2023			December 31,<br><br> <br>2022
Korea Development Bank(*1)		1.87		Feb. 10, 2026	W	28,125			40,625
Credit Agricole CIB(*2)		3M CD + 0.82		Dec. 14, 2023		—			12,500
Mizuho bank, Ltd.		1.35		May. 20, 2024		100,000			100,000
DBS bank Ltd.		1.30		May. 28, 2024		200,000			200,000
DBS bank Ltd.		2.65		Mar. 10, 2025		200,000			200,000
Credit Agricole CIB		3.30		Apr. 29, 2024		50,000			50,000
Mizuho Bank, Ltd.		3.29		Nov. 27, 2023		—			100,000
Nonghyup Bank(*3)		MOR + 1.36		Nov. 17, 2024		40,000			40,000
Credit Agricole CIB		4.89		Nov. 28, 2025		50,000			50,000
Mizuho Bank, Ltd.(*2)		3M CD + 1.05		Jul. 25, 2025		50,000			—
						718,125			793,125
Less: present value discount						(47	)		(13	)
						718,078			793,112
Less: current portions						(402,500	)		(124,987	)
					W	315,578			668,125
(*1)	The long-term borrowings are to be repaid by installments on an annual basis from 2022 to 2026.
---	---
(*2)	3M CD rates are 3.83% and 3.98% as of December 31, 2023 and 2022, respectively.
---	---
(*3)	6M MOR rates are 3.85% and 4.35% as of December 31, 2023 and 2022, respectively.
---	---

F-77

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

18.	Borrowings and Debentures, Continued
(3)	Debentures as of December 31, 2023 and 2022 are as follows:
---	---
(In millions of won and thousands of U.S. dollars)
---	---	---	---	---	---	---	---	---
	Purpose	Maturity		Annual<br>interest rate (%)	December 31,<br>2023		December 31,<br>2022
Unsecured corporate bonds	Operating and<br>refinancing fund		2032	3.45	W	90,000		90,000
Unsecured corporate bonds	Operating fund		2023	3.03		—		230,000
Unsecured corporate bonds			2033	3.22		130,000		130,000
Unsecured corporate bonds			2024	3.64		150,000		150,000
Unsecured corporate bonds	Refinancing fund		2024	2.82		190,000		190,000
Unsecured corporate bonds	Operating and<br>refinancing fund		2025	2.49		150,000		150,000
Unsecured corporate bonds			2030	2.61		50,000		50,000
Unsecured corporate bonds	Operating fund		2025	2.66		70,000		70,000
Unsecured corporate bonds			2030	2.82		90,000		90,000
Unsecured corporate bonds	Operating and<br>refinancing fund		2025	2.55		100,000		100,000
Unsecured corporate bonds	Operating fund		2035	2.75		70,000		70,000
Unsecured corporate bonds			2026	2.08		90,000		90,000
Unsecured corporate bonds			2036	2.24		80,000		80,000
Unsecured corporate bonds			2026	1.97		120,000		120,000
Unsecured corporate bonds			2031	2.17		50,000		50,000
Unsecured corporate bonds	Refinancing fund		2027	2.55		100,000		100,000
Unsecured corporate bonds	Operating and<br> <br>refinancing fund		2032	2.65		90,000		90,000
Unsecured corporate bonds	Refinancing fund		2027	2.84		100,000		100,000
Unsecured corporate bonds			2023	2.81		—		100,000
Unsecured corporate bonds			2028	3.00		200,000		200,000
Unsecured corporate bonds			2038	3.02		90,000		90,000
Unsecured corporate bonds	Operating and<br> <br>refinancing fund		2023	2.33		—		150,000
Unsecured corporate bonds			2038	2.44		50,000		50,000
Unsecured corporate bonds	Operating fund		2024	2.09		120,000		120,000
Unsecured corporate bonds			2029	2.19		50,000		50,000
Unsecured corporate bonds			2039	2.23		50,000		50,000
Unsecured corporate bonds	Operating and<br> <br>refinancing fund		2024	1.49		60,000		60,000
Unsecured corporate bonds			2029	1.50		120,000		120,000
Unsecured corporate bonds			2039	1.52		50,000		50,000
Unsecured corporate bonds			2049	1.56		50,000		50,000
Unsecured corporate bonds	Operating fund		2024	1.76		70,000		70,000
Unsecured corporate bonds			2029	1.79		40,000		40,000
Unsecured corporate bonds			2039	1.81		60,000		60,000
Unsecured corporate bonds	Operating and<br>refinancing fund		2023	1.64		—		170,000
Unsecured corporate bonds	Operating fund		2025	1.75		130,000		130,000
Unsecured corporate bonds			2030	1.83		50,000		50,000
Unsecured corporate bonds			2040	1.87		70,000		70,000

F-78

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

18.	Borrowings and Debentures, Continued
(3)	Debentures as of December 31, 2023 and 2022 are as follows, Continued:
---	---
(In millions of won and thousands of U.S. dollars)
---	---	---	---	---	---	---	---	---
	Purpose	Maturity		Annual<br>interest rate (%)	December 31,<br>2023		December 31,<br>2022
Unsecured corporate bonds	Refinancing fund		2025	1.40		140,000		140,000
Unsecured corporate bonds			2030	1.59		40,000		40,000
Unsecured corporate bonds			2040	1.76		110,000		110,000
Unsecured corporate bonds			2024	1.17		80,000		80,000
Unsecured corporate bonds			2026	1.39		80,000		80,000
Unsecured corporate bonds			2031	1.80		50,000		50,000
Unsecured corporate bonds			2041	1.89		100,000		100,000
Unsecured corporate bonds			2024	2.47		90,000		90,000
Unsecured corporate bonds			2026	2.69		70,000		70,000
Unsecured corporate bonds			2041	2.68		40,000		40,000
Unsecured corporate bonds			2025	3.80		240,000		240,000
Unsecured corporate bonds			2027	3.84		70,000		70,000
Unsecured corporate bonds			2042	3.78		40,000		40,000
Unsecured corporate bonds			2025	4.00		300,000		300,000
Unsecured corporate bonds			2027	4.00		95,000		95,000
Unsecured corporate bonds			2024	4.79		100,000		100,000
Unsecured corporate bonds			2025	4.73		110,000		110,000
Unsecured corporate bonds			2027	4.74		60,000		60,000
Unsecured corporate bonds			2032	4.69		40,000		40,000
Unsecured <br>corporate<br>bonds			2026	3.65		110,000		—
Unsecured corporate bonds			2028	3.83		190,000		—
Unsecured corporate bonds			2026	3.72		80,000		—
Unsecured corporate bonds			2028	3.80		200,000		—
Unsecured corporate bonds			2030	3.96		70,000		—
Unsecured corporate bonds			2026	4.54		115,000		—
Unsecured corporate bonds			2028	4.68		100,000		—
Unsecured corporate bonds			2030	4.72		50,000		—
Unsecured corporate bonds			2033	4.72		30,000		—
Unsecured corporate bonds(*1)	Operating fund		2023	2.93		—		80,000
Unsecured corporate bonds(*1)	Refinancing fund		2024	2.09		160,000		160,000
Unsecured corporate bonds(*1)	Operating and<br> <br>refinancing fund		2024	1.71		100,000		100,000
Unsecured corporate bonds(*1)			2026	1.86		50,000		50,000
Unsecured corporate bonds(*1)	Refinancing fund		2023	1.48		—		100,000
Unsecured corporate bonds(*1)	Operating and<br> <br>refinancing fund		2025	1.64		100,000		100,000
Unsecured corporate bonds(*1)	Refinancing fund		2025	1.41		160,000		160,000
Unsecured corporate bonds(*1)			2024	1.69		100,000		100,000
Unsecured corporate bonds(*1)			2025	2.58		100,000		100,000
Unsecured corporate bonds(*1)			2032	2.92		50,000		50,000
Unsecured corporate bonds(*1)	Operating and<br> <br>refinancing fund		2025	4.21		50,000		—
Unsecured corporate bonds(*1)			2026	4.28		100,000		—
Unsecured corporate bonds(*1)			2028	4.37		90,000		—

F-79

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

18.	Borrowings and Debentures, Continued
(3)	Debentures as of December 31, 2023 and 2022 are as follows, Continued:
---	---
(In millions of won and thousands of U.S. dollars)
---	---	---	---	---	---	---	---	---	---
	Purpose	Maturity		Annual<br>interest rate (%)	December 31,<br>2023			December 31,<br>2022
Unsecured corporate bonds(*1)	Facility fund		2026	4.87		100,000			—
Unsecured corporate bonds(*1)			2028	5.00		60,000			—
Unsecured global bonds	Operating fund		2027	6.63		515,760<br><br> <br>(USD <br>400,000	)		506,920 ( 400,000)
Unsecured global bonds			2023	3.75		—			633,650 ( 500,000)
Unsecured global bonds(*1)	Refinancing fund		2023	3.88		—			380,190 ( 300,000)
Unsecured global bonds(*1)			2028	4.88		386,820<br><br> <br>(USD 300,000	)		—
Floating rate notes(*2)	Operating fund		2025	SOFR rate + 1.17		386,820<br> <br>(USD 300,000	)		380,190 ( 300,000)
Convertible bonds(*3)	Operating fund		2028	—		3,868<br> <br>(USD 3,000	)		—
Convertible bonds(*3)			2028	—		3,868<br> <br>(USD 3,000	)		—
Convertible bonds(*3)			2028	—		2,579<br> <br>(USD 2,000	)		—
Convertible bonds(*3)			2028	—		10,444<br> <br>(USD 8,100	)		—
Convertible bonds(*3)			2028	—		20,824<br> <br>(USD 16,150	)		—
Convertible bonds(*3)			2028	—		9,993<br> <br>(USD 7,750	)		—
Convertible bonds(*3)			2028	—		10,315<br> <br>(USD 8,000	)		—
						8,351,291			8,385,950
Less: discounts on bond						(25,648	)		(19,256
						8,325,643			8,366,694
Less: current portions of bonds						(1,219,344	)		(1,842,599
					W	7,106,299			6,524,095

All values are in US Dollars.

(*1)	Unsecured corporate bonds were issued by SK Broadband Co., Ltd., a subsidiary of the Parent Company.
(*2)	Interest rates applied are SOFR rate 5.38% as of December 31, 2023 and LIBOR rate (3 month) 4.75% + 0.91% as of December 31, 2022.
---	---

F-80

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

18.	Borrowings and Debentures, Continued
(3)	Debentures as of December 31, 2023 and 2022 are as follows, Continued:
---	---
(*3)	Convertible bonds were issued by SAPEON Inc., a subsidiary of the Parent Company, and the conditions for issuing convertible bonds and changes are as follows:
---	---
1<br>)	As of December 31, 2023, the conditions for issuing convertible bonds are as follows:
---	---
(In millions of won and thousands of U.S. dollars)
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Series
	1		2			3			4			5
Total amount of convertible bonds authorized		3,868 ( 3,000		3,868<br> <br>(USD 3,000	)		2,579<br> <br>(USD 2,000	)		10,444<br> <br>(USD 8,100	)		20,824<br> <br>(USD 16,150	)
Coupon rate		0% (However, if not converted, 4% from January 1, 2025, to threeyears from the issue date, and 8% thereafter until the maturity of theconvertible bonds)
Repayment of interest and principal		Lump-sum repayment at maturity with accrued interest added to theissued amount
Convertible period		Until the maturity date or the mandatory conversion date
Type of shares to be issued upon conversion		Registered common stock or securities identical to subsequentinvestments
Conversion ratio		100%
Conversion price (In U.S. dollars)		410.22 per share
Early redemption right		Exercisable from January 1, 2025, in case of non-fulfillment of certainconditions

All values are in US Dollars.

(In millions of won and thousands of U.S. dollars)
	Series
	6
Total amount of convertible bonds authorized	9,993 ( 7,750)
Coupon rate	0% (However, if not converted, 4% from January 1, 2025, to three years from the issue date, and 8% thereafter until the maturity of the convertible bonds)
Repayment of interest and principal	Lump-sum repayment at maturity with accrued interest added to the issued amount
Convertible period	Until the maturity date or the mandatory conversion date
Type of shares to be issued upon conversion	Registered common stock or securities identical to subsequent investments
Conversion ratio	100%
Conversion price (In U.S. dollars)	410.22 per share
Early redemption right	Exercisable from January 1, 2025, in case of non-fulfillment of certain conditions

All values are in US Dollars.

F-81

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

18.	Borrowings and Debentures, Continued
(3)	Debentures as of December 31, 2023 and 2022 are as follows, Continued:
---	---
(*3)	Convertible bonds were issued by SAPEON Inc., a subsidiary of the Parent Company, and the conditions for issuing convertible bonds and changes are as follows, Continued:
---	---

The conversion rights of the aforementioned convertible bonds are classified as equity

2<br>)	The carrying amount of changes in the liability component (present value of non-convertible bonds) of the convertible bonds for the year ended December 31, 2023 are as follows
(In millions of won and thousands of U.S. dollars)
---	---	---	---
	2023
Beginning balance		—
Issuance of convertible bonds		54,284 <br>(USD 41,932	)
Amortization based on effective interest rate		4,951 <br>(USD 4,007	)
Ending balance		59,235 <br>(USD 45,939	)

The liability component of convertible bonds (present value of non-convertible bonds) is measured at amortized cost using the effective interest rate.

19.	Long-term Payables – other
(1)	As of December 31, 2023 and 2022, details of long-term payables – other which consist of payables related to the acquisition of frequency usage rights are as follows (See note 17):
---	---
(In millions of won)
---	---	---	---	---	---	---
	December 31, 2023			December 31, 2022
Long-term payables – other	W	1,290,225			1,690,470
Present value discount on long-term payables – other		(29,772	)		(52,129	)
Current portion of long-term payables – other		(367,770	)		(398,874	)
Carrying amount as of December 31	W	892,683			1,239,467
(2)	The sum of portions repaid among the principal of long-term payables – other for the years ended December 31, 2023 and 2022 amounts <br>to<br> <br>W<br>400,245 million and <br>W<br>400,245 million, respectively. The repayment schedule of the principal amount of long-term payables – other as of December 31, 2023 is as follows:
---	---
(In millions of won)
---	---	---
	Amount
Less than 1 year	W	369,150
1~3 years		738,300
3~5 years		182,775
	W	1,290,225

F-82

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

20.	Provisions

Changes in provisions for the years ended December 31, 2023 and 2022 are as follows:

(In millions of won)
	2023															As of December 31,<br> 2023
	Beginning<br> balance		Increase		Utilization			Reversal			Other			Ending<br><br> <br>balance		Current		Non-current
Provision for restoration	W	115,089		8,041		(2,397	)		(714	)		5			120,024		37,073		82,951
Emission allowance		2,186		2,404		(635	)		(2,773	)		—			1,182		1,182		—
Other provisions		1,823		—		(1,005	)		(108	)		(492	)		218		—		218
	W	119,098		10,445		(4,037	)		(3,595	)		(487	)		121,424		38,255		83,169
(In millions of won)
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	2022																	As of December 31,<br> 2022
	Beginning<br> balance		Increase		Utilization			Reversal			Other			Business<br><br> <br>combination		Ending<br><br> <br>balance		Current		Non-current
Provision for restoration	W	114,731		6,823		(5,679	)		(1,767	)		(10	)		991		115,089		36,998		78,091
Emission allowance		1,885		2,719		—			(2,418	)		—			—		2,186		2,186		—
Other provisions		10,379		4,071		(9,509	)		(3,080	)		(38	)		—		1,823		499		1,324
	W	126,995		13,613		(15,188	)		(7,265	)		(48	)		991		119,098		39,683		79,415
21.	Defined Benefit Liabilities (Assets)
---	---
(1)	Details of defined benefit liabilities (assets) as of December 31, 2023 and 2022 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---
	December 31, 2023			December 31, 2021
Present value of defined benefit obligations	W	1,121,679			1,038,320
Fair value of plan assets		(1,292,416	)		(1,214,007	)
Defined benefit assets(*)		(170,737	)		(175,748	)
Defined benefit liabilities		—			61
(*)	Since the Group entities neither have legally enforceable right nor intention to settle the defined benefit obligations of Group entities with defined benefit assets of other Group entities, defined benefit assets of Group entities have been separately presented from defined benefit liabilities.
---	---

F-83

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

21.	Defined Benefit Liabilities (Assets), Continued
(2)	Principal actuarial assumptions as of December 31, 2023 and 2022 are as follows:
---	---
	December 31, 2023		December 31, 2022
---	---	---	---	---
Discount rate for defined benefit obligations		3.71% ~ 4.79%		5.09% ~ 5.71%
Expected rate of salary increase		2.00% ~ 5.27%		2.00% ~ 8.37%

Discount rate for defined benefit obligation is determined based on market yields of high-quality corporate bonds with similar maturities for estimated payment term of defined benefit obligation. Expected rate of salary increase is determined based on the Group’s historical promotion index, inflation rate and salary increase ratio.

(3)	Changes in present value of defined benefit obligations for the years ended December 31, 2023 and 2022 are as follows:
(In millions of won)
---	---	---	---	---	---	---
	2023			2022
Beginning balance	W	1,038,320			1,035,016
Current service cost		132,465			134,847
Interest cost		54,032			32,572
Remeasurement
- Demographic assumption		810			(28,222	)
- Financial assumption		(24,953	)		(84,532	)
- Adjustment based on experience		18,814			2,369
Business combinations(*1)		—			29,357
Benefit paid		(99,396	)		(79,117	)
Others(*2)		1,587			(3,970	)
Ending balance	W	1,121,679			1,038,320
(*1)	Includes liabilities acquired from the acquisition of SK m&service Co., Ltd. by PS&Marketing Corporation, a subsidiary of the Parent Company for the year ended December 31, 2022.
---	---
(*2)	Others include changes of liabilities due to employee’s transfers among affiliates for the years ended December 31, 2023 and 2022.
---	---
(4)	Changes in fair value of plan assets for the years ended December 31, 2023 and 2022 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---
	2023			2022
Beginning balance	W	1,214,007			1,040,286
Interest income		62,058			32,910
Remeasurement		(2,140	)		(18,622	)
Contributions		108,224			215,254
Benefit paid		(90,452	)		(83,123	)
Business combinations(*1)		—			26,618
Others(*2)		719			684
Ending balance	W	1,292,416			1,214,007

F-84

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

21.	Defined Benefit Liabilities (Assets), Continued
(4)	Changes in fair value of plan assets for the years ended December 31, 2023 and 2022 are as follows, Continued:
---	---
(*1)	Includes assets acquired from the acquisition of SK m&service Co., Ltd. by PS&Marketing Corporation, a subsidiary of the Parent Company for the year ended December 31, 2022.
---	---
(*2)	Others include changes in assets due to the employee’s transfers among affiliates for the years ended December 31, 2023 and 2022.
---	---

The Group’s expected contributions to the defined benefit plan for the year ended December 31, 2024, amounts to W 150,608 million.

(5)	Total cost of defined benefit plan, which is recognized in profit and loss for the years ended December 31, 2023 and 2022 are as follows:
(In millions of won)
---	---	---	---	---	---	---
	2023			2022
Current service cost	W	132,465			134,847
Net interest income		(8,026	)		(338	)
	W	124,439			134,509

Costs related to the defined benefit plan except for the amounts transferred to construction in progress are included i n labor expenses and research and development expenses.

(6)	Details of plan assets as of December 31, 2023 and 2022 are as follows:
(In millions of won)
---	---	---	---	---
	December 31, 2023		December 31, 2022
Equity instruments	W	72,619		17,716
Debt instruments		162,374		174,385
Short-term financial instruments, etc.		1,057,423		1,021,906
	W	1,292,416		1,214,007
(7)	Sensitivity analysis
---	---

As of December 31, 2023, effects on defined benefit obligations if each of significant actuarial assumptions changes within expectable and reasonable range are as follows:

(In millions of won)
	0.5% Increase			0.5% Decrease
Discount rate	W	(37,694	)		40,345
Expected salary increase rate		40,624			(38,319	)

The sensitivity analysis does not consider dispersion of all cash flows that are expected from the plan but provides approximate values of sensitivity for the assumptions used.

A weighted average duration of defined benefit obligations as of December 31, 2023 and 2022 are 7.27 years and 7.53 years, respectively.

F-85

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

21.	Defined Benefit Liabilities (Assets), Continued
(8)	Defined contribution plan
---	---

The amount recognized as an expense for defined contribution plans are W 20,404 million and W 15,529 million for the years ended December 31, 2023 and 2022, respectively.

22.	Derivative Instruments
(1)	Currency and interest rate swap contracts under cash flow hedge accounting as of December 31, 2023 are as follows:
---	---
(In millions of won and thousands of U.S. dollars)
---	---	---	---	---
Borrowing<br>date	Hedging Instrument (Hedged item)	Hedged risk	Financial institution	Duration of<br>contract
Jul. 20<br>,<br> <br>2007	Fixed-to-fixed cross currency swap<br><br>(U.S. dollar denominated bonds face value of USD 400,000)	Foreign currency<br>risk	Morgan Stanley and<br>four other banks	Jul. 20, 2007 ~<br> <br>Jul. 20, 2027
Mar. 4<br>,<br> <br>2020	Floating-to-fixed cross-currency interest rate swap<br>(U.S. <br>dollar-denominated<br> bonds face value of USD 300,000)	Foreign currency<br>risk and Interest<br>rate risk	Citibank	Mar. 4, 2020 ~<br> <br>Jun. 4, 2025
Jun. 28<br>,<br> <br>2023	Fixed-to-fixed cross currency swap<br>(U.S. dollar denominated bonds face value of USD 300,000)	Foreign currency<br>risk	Citi bank,<br>Shinhan Bank, Korea<br>Development Bank<br>and J.P. Morgan	Jun. 28, 2023 ~<br> <br>Jun. 28, 2028

As of December 31, 2023, the changes in fair value of derivatives designated as hedging instrument, which are all effective in hedging, were recognized in full in other comprehensive income.

(2)

SK Broadband Co., Ltd., a subsidiary of the Parent Company, entered into Total Return Swap(TRS) contract amounting to W 270,000 million and W 64,000 million with beneficiary certificates as underlying asset with IGIS Professional Investment Type Private Real Estate Investment Trust No. 156 and Hana Professional Alternative Investment Type Private Real Estate Investment Trust No. 62, respectively. The contracts consist of the settlement of the difference resulting from the change in the value of the real estate on the maturity date of the contract and the settlement of the difference between the dividend and the standard dividend during the contract period. SK Broadband Co., Ltd. has an obligation to guarantee fixed rate of returns to the other party to each contract. SK Broadband Co., Ltd. recognized long-term derivative financial assets of W 21,027 million and W 20,631 million for TRS as of December 31, 2023 and 2022, respectively. Long-term derivative financial assets were measured using the discounted present value methods with future cash flows estimated by the management.

(3)

In relation to the business acquisition by SK Broadband Co., Ltd. for the year ended December 31, 2020 the Parent Company has entered into a shareholders’ agreement with the shareholders of the acquirees. Pursuant to the agreement, when certain conditions are met within a period of time subsequent to the merger, the shareholders of the acquirees can exercise their drag-along rights and require the Parent Company to sell its shares in SK Broadband Co., Ltd. Should the shareholders exercise their drag-along rights, the Parent Company also can exercise its call options over the shares held by those shareholders. The Group recognized a long-term derivative financial liability of W 295,876 million ( W 302,593 million and W 321,025 million as of December 31, 2022 and 2021, respectively) for the rights prescribed in the shareholders’ agreement as of December 31, 2023.

---

F-86

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

22.	Derivative Instruments, Continued

The fair value of SK Broadband Co., Ltd.’s common stock was estimated using 5-year projected cash flows discounted at 6.2% per annum. The fair value of the derivative financial liability was determined by using the Binomial Model based on various assumptions including the price of common stock and its price fluctuations. The significant unobservable inputs used in the fair value measurement and interrelationship between significant unobservable inputs and fair value measurement are as follows:

Significant unobservable inputs	Correlations between inputs<br> <br>and fair value measurements
Fair value of SK Broadband Co., Ltd.’s common stock	The estimated fair value of derivative financial liabilities would decrease (increase) if the fair value of common stock would increase (decrease)
Volatility of stock price	The estimated fair value of derivative financial liabilities would decrease (increase) if the volatility of stock price increase (decrease)
(4)	The Parent Company has entered into the agreement with Newberry Global Limited, whereby the Group has been granted subscription right and contingent subscription right to acquire Newberry series-C redeemable convertible preferred stock for the year ended December 31, 2020. The Parent Company recognized derivative financial assets <br>W<br>13,136 <br>million<br>(<br>W<br>15,477 million as of December 31, 2021) and <br>W<br>8,083 million (<br>W<br>9,524 million as of December 31, 2021), as of December 31, 2022, respectively, for subscription right and contingent subscription right. There is no balance for derivative financial assets as of December 31, 2023, as the exercise period expired without the exercise of subscription rights and contingent subscription rights for the year ended December 31, 2023.
---	---
(5)	The Parent Company has entered into the agreement with HAEGIN Co., Ltd., whereby the Parent Company has been granted contingent subscription right to acquire HAEGIN Co., Ltd.‘s common stock for the year ended December 31, 2022. The Parent Company is able to exercise the right in accordance with the agreement when certain conditions are met and recognized long-term derivative financial assets of <br>W<br>2,323 million and <br>W<br>6,895 million as of December 31, 2023 and 2022, respectively, for the contingent subscription right. The fair value of HAEGIN Co., Ltd.‘s common stock was estimated using 5-year projected cash flows discounted at 13% (12% in 2022) per annum. Meanwhile, if the fair value of HAEGIN Co., Ltd.‘s common stock, significant unobservable input used in the fair value measurement, increases (decreases), the estimated fair value of derivative financial asset would increase (decrease). If the volatility of stock price, significant unobservable input used in the fair value measurement, increases (decreases), the estimated fair value of derivative financial asset would increase (decrease).
---	---

F-87

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

22.	Derivative Instruments, Continued
(6)	The fair value of derivative financial instruments to which the Group applies cash flow hedg<br>ing<br> is recorded in the consolidated financial statements as long-term derivative financial assets and long-term derivative financial liabilities. As of December 31, 2023, details of fair values of the derivatives assets and liabilities are as follows:
---	---
(In millions of won and thousands of U.S. dollars)
---	---	---	---	---	---
Hedging instrument (Hedged item)			Fair value
Non-current assets:
Fixed-to-fixed cross currency swap (U.S. dollar denominated bonds face value of 400,000)	80,426			80,426
Floating-to-fixed cross currency interest rate swap (U.S. dollar denominated bonds face value of 300,000)	35,784			35,784
	116,210			116,210
Non-current liabilities:
Fixed-to-fixed cross currency swap (U.S dollar denominated bonds face value of 300,000)	(9,212	)		(9,212	)
	(9,212	)		(9,212	)

All values are in US Dollars.

As of December 31, 2023, the changes in fair value of derivatives designated as hedging instrument, which are all effective in hedging, were recognized in full in other comprehensive income.

(7)	The fair value of derivatives held for trading is recorded in the consolidated financial statements as derivative financial assets, long-term derivative financial assets and long-term derivative financial liabilities. As of December 31, 2023, details of fair values of the derivative assets and liabilities are as follows:
(In millions of won)
---	---	---	---	---	---	---
	Held for trading			Fair value
Current assets:
Contract for difference settlement	W	8,974			8,974
Non-current assets:
Contingent subscription right		2,323			2,323
Contract for difference settlement		21,027			21,027
	W	32,324			32,324
Non-current liabilities:
Drag-along and call option rights	W	(295,876	)		(295,876	)
		(295,876	)		(295,876	)

F-88

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

23.	Share Capital and Capital Surplus and Others
(1)	Details of share capital as of December 31, 2023 and 2022 are as follows:
---	---
(In millions of won, except for share data)
---	---	---	---	---
	December 31, 2023		December 31, 2022
Number of authorized shares		670,000,000		670,000,000
Par value (in Won)		100		100
Number of issued shares		218,833,144		218,833,144
Share capital:
Common share(*1)	W	30,493		30,493
(*1)	In 2002 and 2003, The Parent Company retired treasury shares with reduction of its retained earnings before appropriation. As a result, the Group’s issued shares have decreased without change in share capital.
---	---
(2)	There were no changes in share capital of the Parent Company for the years ended December 31, 2023 and 2022.
---	---
(3)	Details of shares outstanding as of December 31, 2023 and 2022 are as follows:
---	---
(In shares)	December 31, 2023						December 31, 2022
---	---	---	---	---	---	---	---	---	---	---	---	---
	Issued<br><br> <br>shares		Treasury<br> shares		Outstanding<br> shares		Issued<br> shares		Treasury<br> shares		Outstanding<br> shares
Shares outstanding		218,833,144		6,133,414		212,699,730		218,833,144		801,091		218,032,053
(4)	Details of capital surplus and others as of December 31, 2023 and 2022 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---
	December 31, 2023			December 31, 2022
Paid-in surplus	W	1,771,000			1,771,000
Treasury shares (Note 24)		(301,981	)		(36,702	)
Hybrid bonds (Note 25)		398,509			398,759
Share option (Note 26)		9,818			2,061
Others(*)		(13,705,990	)		(13,702,235	)
	W	(11,828,644	)		(11,567,117	)
(*)	Others primarily consist of the excess of the consideration paid by the Group over the carrying amount of net assets acquired from entities under common control.
---	---
24.	Treasury Shares
---	---
(1)	Treasury shares as of December 31, 2023 and 2022 are as follows:
---	---
(In millions of won, except for the number of shares)
---	---	---	---	---
	December 31, 2023		December 31, 2022
Number of shares		6,133,414		801,091
Acquisition cost	W	301,981		36,702

F-89

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

24.	Treasury Shares, Continued
(2)	Changes in treasury shares for the years ended December 31, 2023 and 2022 are as follows:
---	---
(In shares)
---	---	---	---	---	---	---
	2023			2022
Treasury shares as of January 1		801,091			1,250,992
Acquisition (*1)		5,773,410			—
Disposal (*2)		(441,087	)		(449,901	)
Treasury shares as of December 31		6,133,414			801,091
(*1)	The Parent Company acquired 5,773,410 of its treasury shares for <br>W<br>285,487 million in an effort to increase shareholder value by stabilizing its stock price for the year ended December 31, 2023.
---	---
(*2)	The Parent Company distributed 441,087 treasury shares (acquisition cost: <br>W<br>20,208 million) as bonus payment to the employees, resulting in gain on disposal of treasury shares of <br>W<br>212 million for the year ended December 31, 2023. Also, the Parent Company distributed 449,901 treasury shares (acquisition cost: <br>W<br>20,612 million) as bonus payment to the employees, resulting in gain on disposal of treasury shares of <br>W<br>4,813 million for the yea<br>r e<br>nded December 31, 2022.
---	---
25.	Hybrid Bonds
---	---
Hybrid bonds classified as equity as of December 31, 2023 and 2022 are as follows:
---
(In millions of won)
---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Type	Issuance<br> date		Maturity(*1)		Annual<br> interest<br> rate(%)(*2)		December 31,<br> 2023			December 31,<br> 2022
Series 3 hybrid bonds	Unsecured subordinated bearer bond		June 5,<br> 2023		June 5,<br>2083		4.95	W	400,000			—
Series 2-1 hybrid<br> bonds	Unsecured subordinated bearer bond		June 7,<br> 2018		June 7,<br>2078		3.70		—			300,000
Series 2-2 hybrid bonds	Unsecured subordinated bearer bond		June 7,<br> 2018		June 7,<br>2078		3.65		—			100,000
Issuance costs									(1,491	)		(1,241	)
								W	398,509			398,759

The Parent Company redee m ed previously issued hybrid bonds and issued new ones for the year ended December 31, 2023. As there is no contractual obligation to deliver financial assets to the holders of hybrid bonds, the Parent Company classified the hybrid bonds as equity.

These are subordinated bonds which rank before common shares in the event of a liquidation or reorganization of the Parent Company.

(*1)	The Parent Company has a right to extend the maturity without any notice or announcement.
(*2)	Annual interest rate is determined as yield rate of 5-year national bond plus premium. According to the step-up clause, additional premium of 0.25% and 0.75%, respectively, after 10 years and 25 years from the issuance date are applied.
---	---

F-90

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

26.	Share-based payment Arrangement
26.1	Share-based payment arrangement of the Parent Company
---	---
(1)	The terms and conditions related to the grants of the share-based payment arrangement are as follows:
---	---
1)	Share-based payment arrangement with cash alternatives
---	---
	Series
---	---	---	---	---	---
	1-3	3	4	5	6
Grant date	March 24, 2017	February 22, 2019	March 26, 2019	March 26, 2020	March 25, 2021
Types of shares to be issued	Registered common shares of the Parent Company
Grant method	Reissue of treasury shares,<br> <br>Cash settlement
Number of shares (in share)	67,320	8,907	5,266	376,313	87,794
Exercise price (in won)	57,562	53,052	50,862	38,452	50,276
Exercise period	Mar. 25, 2021 <br>~<br> <br>Mar. 24, 2024	Feb. 23, 2021 <br>~<br> <br>Feb. 22, 2024	Mar. 27, 2021 <br>~<br> <br>Mar. 26, 2024	Mar. 27, 2023 <br>~<br> <br>Mar. 26, 2027	Mar. 26, 2023 <br>~<br> <br>Mar. 25, 2026
Vesting<br><br>conditions	4 years’ <br>service from<br> the grant date	2 years’ <br>service from the<br> grant date	2 years’ <br>service from<br> the grant date	3 years’ <br>service from<br> the grant date	2 years’ <br>service from<br> the grant date
	Series
---	---	---
	7-1	7-2
Grant date	March 25, 2022
Types of shares to be issued	Registered common shares of the Parent Company
Grant method	Reissue of treasury shares,<br> <br>Cash settlement
Number of shares (in share)	295,275	109,704
Exercise price (in won)	56,860	56,860
Exercise period	Mar. 26, 2025 <br>~<br> <br>Mar. 25, 2029	Mar. 26, 2024 <br>~<br> <br>Mar. 25, 2027
Vesting conditions	2 years’ <br>service from the grant<br> date	2 years’ <br>service from the grant<br> date
(*)	The remaining parts of 1-2st and 2nd share options were fully forfeited, and the 8th share option was canceled for the year ended December 31, 2023.
---	---

F-91

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

26.	Share-based payment Arrangement, Continued
26.1	Share-based payment arrangement of the Parent Company, Continued
---	---
(1)	The terms and conditions related to the grants of the share-based payment arrangement are as follows, Continued:
---	---
2)	Cash-settled share-based payment arrangement
---	---
	Granted in 2021		Granted in 2022
---	---	---	---
	Share<br> appreciation<br> rights of SK<br> Telecom Co.,<br> Ltd.(*)	Share appreciation<br> rights of SK Square<br> Co., Ltd.(*)	Share appreciation<br> rights of SK Telecom Co., Ltd.
Grant date	January 1, 2021		January 1, 2022
Grant method	Cash settlement
Number of shares (in share)	183,246	118,456	338,525
Exercise price (in won)	50,276		56,860
Exercise period	Jan. 1, 2023 ~ Mar. 28, 2024		Jan. 1, 2024 ~ Mar. 25, 2025
Vesting conditions	2 years’ service from the grant date		2 years’ service from the grant date
(*)	Parts of the grant that have not met the vesting conditions have been forfeited for the year ended December 31, 2022.
---	---
3)	Equity-settled share-based payment arrangement
---	---

The Parent Company newly established Performance Share Units (“PSU”) for executives of the Parent Company and major subsidiaries as part of the compensation based on the growth of corporate value for the year ended December 31, 2023, and the details are as follows:

	PSU of SK Telecom Co., Ltd.
Grant date	March 28, 2023
Types of shares<br><br>to be issued	Registered common shares of the Parent Company
Grant method	Reissue of treasury shares
Number of shares(*)	Fluctuates according to the share price on the expiration date and the cumulative increase rate of KOSPI200
Reference share price (in won)	47,280
Reference index (KOSPI200)	315
Maturity (exercise date)	The day in which the annual general meeting of shareholders is held after 3 years from the grant date
Vesting conditions	Full service in the year in which the grant date is included
(*)	The initial amount granted is a total of <br>W<br>10,813 million, and the amount calculated according to the adjustment rate based on the share price on the expiration date and the cumulative increase rate of <br>KOSPI200<br> will be paid in shares.
---	---

F-92

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

26.	Share-based payment Arrangement, Continued
26.1	Share-based payment arrangement of the Parent Company, Continued
---	---
(1)	Share compensation expense for share-based payment arrangements with cash alternatives recognized for the year ended December 31, 2023 and the remaining share compensation expense to be recognized in subsequent periods are as follows:
---	---
(In millions of won)
---	---	---
	Share compensation<br> expense
As of December 31, 2022	W	155,579
For the year ended December 31, 2023		2,171
In subsequent periods		504
	W	158,254

The liabilities recognized by the Parent Company in relation to the share-based payment arrangement with cash alternatives are W 5,530 million and W 4,221 million, respectively, which are included in accrued expenses as of December 31, 2023 and 2022.

As of December 31, 2023 and 2022, the carrying amount of liabilities recognized by the Parent Company in relation to the cash-settled share-based payment arrangement are W 1,133 million and W 906 million, respectively.

Share compensation expenses recognized for equity-settled share-based payment arrangements are W 6,267 million for the year ended December 31, 2023.

(3)	The Parent Company used binomial option pricing model in the measurement of the fair value of the share options at grant date and the inputs used in the model are as follows:
1)	Share-based payment arrangement with cash alternatives
---	---

(i) SK Telecom Co., Ltd.

(In won)	Series
	1-3			3			4			5			6			7-1			7-2
Risk-free interest rate		3.52	%		3.49	%		3.52	%		3.14	%		3.18	%		3.15	%		3.14	%
Estimated option’s life		7 years			5<br>years			5 years			7 years			5 years			7 years			5 years
Share price on the remeasurement date		50,100			50,100			50,100			50,100			50,100			50,100			50,100
Expected volatility		16.80	%		16.80	%		16.80	%		16.80	%		16.80	%		16.80	%		16.80	%
Expected dividends yield		6.60	%		6.60	%		6.60	%		6.60	%		6.60	%		6.60	%		6.60	%
Exercise price		57,562			53,052			50,862			38,452			50,276			56,860			56,860
Per-share fair value of the option		63			310			1,157			11,648			3,400			2,466			1,974

F-93

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

26.	Share-based payment Arrangement, Continued
26.1	Share-based payment arrangement of the Parent Company, Continued
---	---
(3)	The Parent Company used binomial option pricing model in the measurement of the fair value of the share options at grant date and the inputs used in the model are as follows, Continued:
---	---
1)	Share-based payment arrangement with cash alternatives, Continued
---	---

(ii) SK Square Co., Ltd.

(In won)	Series
	1-3			3			4			5			6
Risk-free interest rate		2.07	%		1.91	%		1.78	%		1.52	%		1.55	%
Estimated option’s life		7 years			5 years			5 years			7 years			5 years
Share price (Closing price on the preceding day)		52,500			51,800			50,600			34,900			49,800
Expected volatility		13.38	%		8.30	%		7.70	%		8.10	%		25.70	%
Expected dividends yield		3.80	%		3.80	%		3.90	%		5.70	%		4.00	%
Exercise price		57,562			53,052			50,862			38,452			50,276
Per-share fair value of the option		3,096			1,720			1,622			192			8,142
2)	Cash-settled share-based payment arrangement
---	---
(In won)	Granted in 2021						Granted in 2022
---	---	---	---	---	---	---	---	---	---
	Share appreciation<br> rights of SK Telecom<br> Co., Ltd.			Share appreciation<br> rights of SK Square<br> Co., Ltd.			Share appreciation<br> rights of SK Telecom<br> Co., Ltd.
Risk-free interest rate		3.52	%		3.52	%		3.37	%
Estimated option’s life		3.25 years			3.25 years			3.25 years
Share price on the remeasurement date		50,100			52,600			50,100
Expected volatility		16.80	%		30.90	%		16.80	%
Expected dividends yield		6.60	%		0.00	%		6.60	%
Exercise price		50,276			50,276			56,860
Per-share fair value of the option		1,387			4,706			949
3)	Equity-settled share-based payment arrangement
---	---
(In won)
---	---	---	---
	PSU of SK Telecom Co., Ltd.
Risk-free interest rate		3.26	%
Estimated option’s life		3 <br>years
Share price on the grant date		48,500
Expected volatility		18.67	%
Expected dividends yield		4.90	%
Per-share fair value of the option		27,525

F-94

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

26.	Share-based payment Arrangement, Continued
26.2	Share-based payment arrangement by SAPEON Inc., a subsidiary of the Parent Company
---	---
(1)	The terms and conditions related to the grants of the share-based payment arrangement are as follows:
---	---
	Series
---	---	---	---
	1-1	1-2	2
Grant date	February 28, 2023		November 13, 2023
Types of shares to be issued	Registered common shares of SAPEON Inc.
Grant method	Issuance of shares
Number of shares (in share)	14,500	35,100	6,450
Exercise price (in U.S. dollars)	100.0
Exercise period(*)	Jan. 4, 2024<br> ~<br> Jan. 4, 2032	Apr. 1, 2024<br> ~<br> Apr. 1, 2032	Feb. 1, 2025<br> ~<br> Feb. 1, 2033
Vesting conditions	2 years’ service from the commencement date, 50% <br>3 years’ service from the commencement date, 25%<br> <br>4 years’ service from the commencement date, 25%
(*)	The exercise periods vary as vesting periods for each share-based payment arrangement are different. The exercise period was disclosed based on the vesting period with the highest number of grants.
---	---
(2)	Share compensation expense for share-based payment arrangements for the year ended December 31, 2023 and the remaining share compensation expense to be recognized in subsequent periods are as follows:
---	---
(In millions of won)
---	---	---
	Share compensation<br> expense
As of December 31, 2022	W	—
For the year ended December 31, 2023		2,555
In subsequent periods		1,312
	W	3,867
(3)	SAPEON Inc., a subsidiary of the Parent Company, used binomial option pricing model in the measurement of the fair value of the share options at grant date and the inputs used in the model are as follows:
---	---
(In U.S. dollars)
---	---	---	---	---	---	---	---	---	---
	1-1			1-2			2
Risk-free interest rate		4.18	%		4.16	%		4.67	%
Estimated option’s life		5.18 years			5.42 years			5.55 years
Underlying share price		107.8			107.8			118.1
Expected volatility		43.50	%		43.00	%		43.00	%
Expected dividends yield		0.00	%		0.00	%		0.00	%
Exercise price		100.0			100.0			100.0
Per-share fair value of the option		50.7			51.4			61.4

F-95

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

27.	Retained Earnings
(1)	Retained earnings as of December 31, 2023 and 2022 are as follows:
---	---
(In millions of won)
---	---	---	---	---
	December 31, 2023		December 31, 2022
Appropriated:
Legal reserve	W	22,320		22,320
Reserve for business expansion		9,831,138		9,631,138
Reserve for technology development		4,565,300		4,365,300
		14,396,438		13,996,438
Unappropriated		8,381,223		8,444,953
	W	22,799,981		22,463,711
(2)	Legal reserve
---	---

The Korean Commercial Act requires the Parent Company to appropriate as a legal reserve at least 10% of cash dividends paid for each accounting period until the reserve equals 50% of outstanding share capital. The legal reserve may not be utilized for cash dividends, but may only be used to offset a future deficit, if any, or may be transferred to share capital.

28.	Reserves
(1)	Details of reserves, net of taxes, as of December 31, 2023 and 2022 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---
	December 31, 2023			December 31, 2022
Valuation gain on FVOCI	W	176,208			173,281
Other comprehensive income of investments in associates and joint ventures		182,702			173,477
Valuation gain (loss) on derivatives		(1,488	)		14,463
Foreign currency translation differences for foreign operations		29,794			30,012
	W	387,216			391,233

F-96

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

28.	Reserves, Continued
(2)	Changes in reserves for the years ended December 31, 2023 and 2022 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Valuation gain<br> on financial<br> assets at FVOCI			Other<br> comprehensive<br> income of<br> investments in<br> associates and<br><br> <br>joint ventures		Valuation<br> gain (loss) on<br> derivatives			Foreign<br> currency<br> translation<br> differences for<br> foreign<br> operations			Total
Balance as of January 1, 2022	W	633,240			53,770		33,918			14,310			735,238
Changes, net of taxes		(459,959	)		119,707		(19,455	)		15,702			(344,005	)
Balance as of December 31, 2022	W	173,281			173,477		14,463			30,012			391,233
Changes, net of taxes		2,927			9,225		(15,951	)		(218	)		(4,017	)
Balance as of December 31, 2023	W	176,208			182,702		(1,488	)		29,794			387,216
(3)	Changes in valuation gain on financial assets at FVOCI for the years ended December 31, 2023 and 2022 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---
	2023			2022
Balance as of January 1	W	173,281			633,240
Amount recognized as other comprehensive income for the year, net of taxes		(18,883	)		(490,959	)
Amount reclassified to retained earnings, net of taxes		21,810			31,000
Balance as of December 31	W	176,208			173,281
(4)	Changes in valuation gain (loss) on derivatives for the years ended December 31, 2023 and 2022 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---
	2023			2022
Balance as of January 1	W	14,463			33,918
Amount recognized as other comprehensive income for the year, net of taxes		(18,725	)		(25,630	)
Amount reclassified to profit, net of taxes		2,774			6,175
Balance as of December 31	W	(1,488	)		14,463

F-97

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

29.	Other Operating Income and Expenses

Details of other operating income and expenses for the years ended December 31, 2023, 2022 and 2021 are as follows:

(In millions of won)
	2023		2022		2021
Other Operating Income:
Gain on disposal of property and equipment and intangible assets	W	21,898		15,985		39,136
Others(*)		28,468		40,274		76,627
	W	50,366		56,259		115,763
Other Operating Expenses:
Communication	W	32,238		31,881		32,462
Utilities		511,240		401,025		350,678
Taxes and dues		29,009		49,445		33,935
Repair		431,964		435,572		425,606
Research and development		369,507		340,864		347,711
Training		39,286		39,632		31,761
Bad debt for accounts receivable – trade		37,906		27,053		29,402
Travel		22,499		15,684		7,813
Supplies and other		130,330		113,839		101,656
Loss on disposal of property and equipment and intangible assets		9,369		20,465		28,158
Impairment loss on property and equipment and intangible assets		10,369		17,027		3,135
Donations		14,766		13,125		12,800
Bad debt for accounts receivable – other		5,256		3,011		3,995
Others(*)		7,534		20,353		22,475
	W	1,651,273		1,528,976		1,431,587
(*)	See note 4 (2).
---	---

F-98

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

30.	Finance Income and Costs

(1) Details of finance income and costs for the years ended December 31, 2023, 2022 and 2021 are as follows:

(In millions of won)
	2023		2022		2021
Finance Income:
Interest income	W	70,055		58,472		36,708
Gain on sale of accounts receivable – other		—		1,043		27,725
Dividends		43,014		2,552		12,039
Gain on foreign currency transactions		19,065		21,283		10,987
Gain on foreign currency translations		1,199		2,095		7,505
Gain relating to financial instruments at FVTPL		115,043		94,393		60,169
	W	248,376		179,838		155,133
Finance Costs:
Interest expense	W	389,813		328,307		279,737
Loss on sale of accounts receivable – other		65,027		61,841		—
Loss on foreign currency transactions		21,693		19,485		12,270
Loss on foreign currency translations		1,227		3,814		6,764
Loss relating to financial instruments at FVTPL		49,641		41,597		16,833
Loss on disposal of investment assets		—		1,283		—
	W	527,401		456,327		315,604
(2)	Details of interest income included in finance income for the years ended December 31, 2023, 2022 and 2021 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---
	2023		2022		2021(*)
Interest income on cash equivalents and financial instruments	W	44,921		27,991		16,141
Interest income on loans and others		25,134		30,481		27,709
	W	70,055		58,472		43,850
(*)	Includes amounts related to discontinued operations.
---	---
(3)	Details of interest expenses included in finance costs for the years ended December 31, 2023, 2022 and 2021 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---
	2023		2022		2021(*)
Interest expense on borrowings	W	29,917		25,736		66,188
Interest expense on debentures		247,105		217,475		224,144
Others		112,791		85,096		52,010
	W	389,813		328,307		342,342
(*)	Includes amounts related to discontinued operations.
---	---

F-99

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

30.	Finance Income and Costs, Continued
(4)	Finance income and costs by category of financial instruments for the years ended December 31, 2023, 2022 and 2021 are as follows. Bad debt expense (reversal of loss allowance) for accounts receivable – trade, loans and receivables are presented and explained separately in notes 6 and 35.
---	---
1)	Finance income and costs
---	---
(In millions of won)
---	---	---	---	---
	2023
	Finance income		Finance costs
Financial Assets:
Financial assets at FVTPL	W	127,001		114,668
Financial assets at FVOCI		39,681		—
Financial assets at amortized cost		69,373		22,795
Derivatives designated as hedging instrument		2,480		—
		238,535		137,463
Financial Liabilities:
Financial liabilities at FVTPL		6,717		—
Financial liabilities at amortized cost		3,124		389,938
		9,841		389,938
	W	248,376		527,401
(In millions of won)
---	---	---	---	---
	2022
	Finance income		Finance costs
Financial Assets:
Financial assets at FVTPL	W	104,068		103,292
Financial assets at FVOCI		1,495		1,283
Financial assets at amortized cost		45,008		23,094
Derivatives designated as hedging instrument		—		146
		150,571		127,815
Financial Liabilities:
Financial liabilities at FVTPL		18,432		—
Financial liabilities at amortized cost		10,835		328,512
		29,267		328,512
	W	179,838		456,327

F-100

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

30.	Finance Income and Costs, Continued
(4)	Finance income and costs by category of financial instruments for the years ended December 31, 2023, 2022 and 2021 are as follows. Bad debt expense (reversal of loss allowance) for accounts receivable – trade, loans and receivables are presented and explained separately in notes 6 and 35., Continued
---	---
1)	Finance income and costs, Continued
---	---
(In millions of won)
---	---	---	---	---
	2021
	Finance income(*)		Finance costs(*)
Financial Assets:
Financial assets at FVTPL	W	149,590		67,503
Financial assets at FVOCI		3,413		142,015
Financial assets at amortized cost		48,940		12,262
Derivatives designated as hedging instrument		—		600
		201,943		222,380
Financial Liabilities:
Financial liabilities at FVTPL		—		8,036
Financial liabilities at amortized cost		607		355,011
		607		363,047
	W	202,550		585,427
(*)	Includes amounts related to discontinued operations.
---	---
2)	Other comprehensive income (loss), net of tax
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---
	2023			2022			2021
Financial Assets:
Financial assets at FVOCI	W	(18,842	)		(491,853	)		920,871
Derivatives designated as hedging instrument		(11,520	)		(21,548	)		15,427
		(30,362	)		(513,401	)		936,298
Financial Liabilities:
Derivatives designated as hedging instrument		(5,940	)		182			706
	W	(36,302	)		(513,219	)		937,004

F-101

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

30.	Finance Income and Costs, Continued
(5)	Details of impairment losses for financial assets for the years ended December 31, 2023, 2022 and 2021 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---
	2023		2022		2021(*)
Accounts receivable – trade	W	37,906		27,053		31,546
Other receivables		5,256		3,011		6,001
	W	43,162		30,064		37,547
(*)	Includes amounts related to discontinued operations.
---	---
31.	Income Tax Expense
---	---
(1)	Income tax expenses for the years ended December 31, 2023, 2022 and 2021 consist of the following:
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---
	2023			2022			2021
Current tax expense:
Current year	W	273,936			274,902			319,539
Current tax of prior years(*)		(11,590	)		73,477			705
		262,346			348,379			320,244
Deferred tax expense:
Changes in net deferred tax assets		79,896			(60,058	)		331,704
Income tax expense
Tax expense of continuing operation		342,242			288,321			446,796
Tax expense of discontinued operation		—			—			205,152
	W	342,242			288,321			651,948
(*)	Current tax of prior years are mainly composed of the income tax refund due to a change in the interpretation of the tax authority in relation to the income tax previously recognized by the Group.
---	---
(2)	The difference between income taxes computed using the statutory corporate income tax rates and the recorded income taxes for the years ended December 31, 2023, 2022 and 2021 is attributable to the following:
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---	---
	2023			2022			2021(*)
Income taxes at statutory income tax rate	W	382,517			329,580			834,146
Non-taxable income		(3,091	)		(14,969	)		(13,924	)
Non-deductible expenses		15,725			24,679			15,329
Tax credit and tax reduction		(64,829	)		(10,300	)		(62,075	)
Changes in unrecognized deferred taxes		14,354			21,057			(68,589	)
Changes in tax rate		3,444			(42,307	)		(36,193	)
Income tax refund and others		(5,878	)		(19,419	)		(16,746	)
Income tax expense	W	342,242			288,321			651,948
(*)	The aggregated amount of profit before income tax from continuing and discontinued operations.
---	---

F-102

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

31.	Income Tax Expense, Continued
(3)	Deferred taxes directly charged to (credited from) equity for the years ended December 31, 2023, 2022 and 2021 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---	---
	2023			2022			2021
Valuation gain (loss) on financial assets measured at fair value	W	12,977			167,249			(208,490	)
Share of other comprehensive gain (loss) of investment in associates and joint ventures		292			(2,972	)		(34	)
Valuation gain (loss) on derivatives		5,631			7,649			(5,709	)
Remeasurement of defined benefit liabilities (assets)		(2,672	)		(20,867	)		(3,780	)
Gain (loss) on disposal of treasury shares and others		(53	)		(28,108	)		26,970
	W	16,175			122,951			(191,043	)
(4)	Details of the changes in deferred tax assets (liabilities) for the years ended December 31, 2023 and 2022 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---	---	---	---	---
	2023
	Beginning			Deferred tax<br><br> <br>expense (income)			Directly charged to<br> (credited from)<br> equity			Ending
Deferred tax assets (liabilities) related to temporary differences:
Loss allowance	W	75,042			73			—			75,115
Accrued interest income		(7,903	)		1,064			—			(6,839	)
Financial assets measured at fair value		(10,171	)		(5,332	)		12,977			(2,526	)
Investments in subsidiaries, associates and joint ventures		16,846			5,792			292			22,930
Property and equipment and intangible assets		(352,605	)		(66,808	)		—			(419,413	)
Provisions		1,629			(310	)		—			1,319
Retirement benefit obligation		30,619			(15,517	)		(2,672	)		12,430
Valuation gain on derivatives		12,768			1,271			5,631			19,670
Gain (loss) on foreign currency translation		20,633			34			—			20,667
Incremental costs to acquire a contract		(722,900	)		4,689			—			(718,211	)
Contract assets and liabilities		4,279			13,286			—			17,565
Right-of-use assets		(431,397	)		41,534			—			(389,863	)
Lease liabilities		428,648			(40,557	)		—			388,091
Others		85,716			(81,397	)		(53	)		4,266
		(848,796	)		(142,178	)		16,175			(974,799	)
Deferred tax assets related to unused tax loss carryforwards and tax credit carryforwards:
Tax loss carryforwards		2,007			5,143			—			7,150
Tax credit		89,883			57,139			—			147,022
		91,890			62,282			—			154,172
	W	(756,906	)		(79,896	)		16,175			(820,627	)

F-103

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

31.	Income Tax Expense, Continued
(4)	Details of the changes in deferred tax assets (liabilities) for the years ended December 31, 2023 and 2022 are as follows, Continued:
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	2022
	Beginning			Deferred tax<br><br> <br>expense (income)			Directly charged to<br> (credited from)<br> equity			Business<br> combinations			Ending
Deferred tax assets (liabilities) related to temporary differences:
Loss allowance	W	77,357			(2,315	)		—			—			75,042
Accrued interest income		(166	)		(5,057	)		—			(2,680	)		(7,903	)
Financial assets measured at fair value		(157,828	)		(19,592	)		167,249			—			(10,171	)
Investments in subsidiaries, associates and joint ventures		(31,817	)		51,635			(2,972	)		—			16,846
Property and equipment and intangible assets		(305,967	)		(46,895	)		—			257			(352,605	)
Provisions		4,198			(2,569	)		—			—			1,629
Retirement benefit obligation		52,332			(875	)		(20,867	)		29			30,619
Valuation gain on derivatives		6,336			(1,217	)		7,649			—			12,768
Gain (loss) on foreign currency translation		21,378			(745	)		—			—			20,633
Incremental costs to acquire a contract		(749,871	)		26,971			—			—			(722,900	)
Contract assets and liabilities		(2,201	)		6,480			—			—			4,279
Right-of-use assets		(389,502	)		(41,895	)		—			—			(431,397	)
Lease liabilities		381,537			47,111			—			—			428,648
Others		68,481			41,691			(28,108	)		3,652			85,716
		(1,025,733	)		52,728			122,951			1,258			(848,796	)
Deferred tax assets related to unused tax loss carryforwards and tax credit carryforwards:
Tax loss carryforwards		—			2,007			—			—			2,007
Tax credit		84,560			5,323			—			—			89,883
		84,560			7,330			—			—			91,890
	W	(941,173)			60,058			122,951			1,258			(756,906	)

F-104

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

31.	Income Tax Expense, Continued
(5)	Details of temporary differences, unused tax loss carryforwards and unused tax credits carryforwards which are not recognized as deferred tax assets (liabilities), in the consolidated statements of financial position as of December 31, 2023 and 2022 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---
	December 31, 2023			December 31, 2022
Loss allowance	W	77,837			85,969
Investments in subsidiaries, associates and joint ventures		(480,667	)		(434,253	)
Other temporary differences		64,004			61,817
Unused tax loss carryforwards		174,589			229,410

The amount of unused tax loss carryforwards which are not recognized as deferred tax assets as of December 31, 2023 are expiring within the following periods:

(In millions of won)
	Unused tax loss carryforwards
Less than 1 year	W	19,087
1 ~ 2 years		14,345
2 ~ 3 years		12,956
More than 3 years		128,201
	W	174,589
32.	Earnings per Share
---	---

Earnings per share is calculated as the profit attributable to the owners of the Parent Company for common share and dilutive potential common share, and details are as follows.

(1)	Basic earnings per share
1)	Basic earnings per share for the years ended December 31, 2023, 2022 and 2021 are calculated as follows:
---	---
(In millions of won, except for share data and basic earnings per share)
---	---	---	---	---	---	---	---	---	---
	2023			2022			2021
Basic earnings per share attributable to owners of the Parent Company:
Profit attributable to owners of the Parent Company	W	1,093,611			912,400			1,217,520
Interest on hybrid bonds		(17,283	)		(14,766	)		(14,766	)
Profit from continuing operation attributable to owners of the Parent Company on common shares		1,076,328			897,634			1,202,754
Profit from discontinued operation attributable to owners of the Parent Company on common shares		—			—			1,190,003
Weighted average number of common shares outstanding		217,264,615			217,994,490			332,761,592
Basic earnings per share (in won)
Continuing operation	W	4,954			4,118			3,614
Discontinued operation		—			—			3,576

F-105

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

32.	Earnings per Share, Continued
(1)	Basic earnings per share, Continued
---	---
2)	The weighted average number of common shares outstanding for the years ended December 31, 2023, 2022 and 2021 are calculated as follows:
---	---
(In shares)
---	---	---	---	---	---	---
	2023
	Number of common shares			Weighted average number of<br> common shares
Issued shares as of January 1, 2023		218,833,144			218,833,144
Treasury shares as of January 1, 2023		(801,091	)		(801,091	)
Acquisition of treasury shares		(5,773,410	)		(1,154,633	)
Disposal of treasury shares		441,087			387,195
		212,699,730			217,264,615
(In shares)
	2022
	Number of common shares			Weighted average number of<br> common shares
Issued shares as of January 1, 2022		218,833,144			218,833,144
Treasury shares as of January 1, 2022		(1,250,992	)		(1,250,992	)
Disposal of treasury shares		449,901			412,338
		218,032,053			217,994,490
(In shares)
	2021
	Number of common shares			Weighted average number of<br> common shares
Issued shares as of January 1, 2021		403,728,555			403,728,555
Treasury shares as of January 1, 2021		(47,092,790	)		(47,092,790	)
Acquisition of treasury shares		(1,494,032	)		(1,383,241	)
Disposal of treasury shares		3,134,003			1,022,242
Spin-off		(140,693,584	)		(23,513,174	)
		217,582,152			332,761,592

F-106

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

32.	Earnings per Share, Continued
(2)	Diluted earnings per share
---	---
1)	Diluted earnings per share for the years ended December 31, 2023, 2022 and 2021 are calculated as follows:
---	---
(In millions of won, except for share data and diluted earnings per<br> share)
---	---	---	---	---	---	---
	2023		2022		2021
Profit from continuing operation attributable to owners of the Parent Company on common shares	W	1,076,328		897,634		1,202,754
Profit from discontinued operation attributable to owners of the Parent Company on common shares		—		—		1,190,003
Adjusted weighted average number of common shares outstanding		217,452,721		218,108,742		332,917,848
Diluted earnings per share (in won)
Continuing operation	W	4,950		4,116		3,613
Discontinued operation		—		—		3,574
2)	The adjusted weighted average number of common shares outstanding for the years ended December 31, 2023, 2022 and 2021 are calculated as follows:
---	---
(In shares)
---	---	---	---	---	---	---	---	---
	2023			2022		2021
Outstanding shares as of January 1		218,032,053			217,582,152		356,635,765
Effect of treasury shares		(767,438	)		412,338		(360,999	)
Effect of spin-off		—			—		(23,513,174	)
Effect of share option		188,106			114,252		156,256
Adjusted weighted average number of common shares outstanding		217,452,721			218,108,742		332,917,848

F-107

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

33.	Dividends
(1)	Details of dividends declared
---	---

Details of dividend declared in Parent Company for the years ended December 31, 2023, 2022 and 2021 are as follows:

(In millions of won, except for face value and share data)
Year	Dividend type	Number of shares<br> outstanding		Face value<br> (in won)		Dividend ratio(*)			Dividends
2023	Cash dividends (Interim)		218,466,141		100		830	%	W	181,327
	Cash dividends (Interim)		218,473,140		100		830	%		181,333
	Cash dividends (Interim)		216,412,898		100		830	%		179,623
	Cash dividends (Year-end)		212,699,730		100		1,050	%		223,335
									W	765,618
2022	Cash dividends (Interim)		218,002,830		100		830	%	W	180,942
	Cash dividends (Interim)		218,032,053		100		830	%		180,967
	Cash dividends (Interim)		218,032,053		100		830	%		180,967
	Cash dividends (Year-end)		218,032,053		100		830	%		180,967
									W	723,843
2021	Cash dividends (Interim)		217,616,645		100		1,635	%	W	355,804
	Cash dividends (Year-end)		217,582,152		100		1,660	%		361,186
									W	716,990
(*)	Dividend ratio is calculated by dividing dividend per share by the par value of a share.
---	---
(2)	Dividends yield ratio
---	---

Dividends yield ratios for the years ended December 31, 2023, 2022 and 2021 are as follows:

(In won)
Year	Dividend type	Dividend per<br> share	Closing price at<br> year-end	Dividend yield<br> ratio
2023	Cash dividends	3,540	50,100	7.07%
2022	Cash dividends	3,320	47,400	7.00%
2021	Cash dividends	3,295	57,900	5.69%

F-108

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

34.	Categories of Financial Instruments
(1)	Financial assets by category as of December 31, 2023 and 2022 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---	---	---
	December 31, 2023
	Financial<br> assets at<br> FVTPL		Equity<br> instruments at<br> FVOCI		Financial assets at<br> amortized cost		Derivatives<br> hedging<br> instrument		Total
Cash and cash equivalents	W	313,340		—		1,141,638		—		1,454,978
Financial instruments		62,364		—		232,945		—		295,309
Long-term investment securities(*)		280,650		1,398,734		—		—		1,679,384
Accounts receivable – trade		—		—		1,990,849		—		1,990,849
Loans and other receivables		273,945		—		781,157		—		1,055,102
Derivative financial assets		32,324		—		—		116,210		148,534
	W	962,623		1,398,734		4,146,589		116,210		6,624,156
(*)	The Group designated <br>W<br>1,398,734 million of equity instruments that are not held for trading as financial assets at FVOCI.
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---	---	---
	December 31, 2022
	Financial<br> assets at<br> FVTPL		Equity<br> instruments at<br> FVOCI		Financial assets at<br> amortized cost		Derivatives<br> hedging<br> instrument		Total
Cash and cash equivalents	W	245,982		—		1,636,309		—		1,882,291
Financial instruments		148,365		—		89,240		—		237,605
Long-term investment securities(*)		221,139		1,189,597		—		—		1,410,736
Accounts receivable – trade		—		—		1,984,772		—		1,984,772
Loans and other receivables		332,669		—		909,003		—		1,241,672
Derivative financial assets		54,009		—		—		267,151		321,160
	W	1,002,164		1,189,597		4,619,324		267,151		7,078,236
(*)	The Group designated <br>W<br>1,189,597 million of equity instruments that are not held for trading as financial assets at FVOCI.
---	---

F-109

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

34.	Categories of Financial Instruments, Continued
(2)	Financial liabilities by category as of December 31, 2<br>023 a<br>nd 2022 are as follows:
---	---
(In millions of won)	December 31, 2023
---	---	---	---	---	---	---	---	---
	Financial liabilities<br> at FVTPL		Financial liabilities<br><br> <br>at amortized cost		Derivatives<br> hedging<br> instrument		Total
Accounts payable – trade	W	—		139,876		—		139,876
Derivative financial liabilities		295,876		—		9,212		305,088
Borrowings		—		718,078		—		718,078
Debentures		—		8,325,643		—		8,325,643
Lease liabilities(*)		—		1,611,433		—		1,611,433
Accounts payable - other and others		—		4,539,838		—		4,539,838
	W	295,876		15,334,868		9,212		15,639,956
(In millions of won)	December 31, 2022
---	---	---	---	---	---	---
	Financial liabilities at<br> FVTPL		Financial liabilities<br><br> <br>at amortized cost		Total
Accounts payable – trade	W	—		89,255		89,255
Derivative financial liabilities		302,593		—		302,593
Borrowings		—		936,110		936,110
Debentures		—		8,366,694		8,366,694
Lease liabilities(*)		—		1,782,057		1,782,057
Accounts payable - other and others		—		5,505,465		5,505,465
	W	302,593		16,679,581		16,982,174
(*)	Lease liabilities are not applicable on category of financial liabilities, but are classified as financial liabilities measured at amortized cost, considering the nature of measuring liabilities.
---	---
35.	Financial Risk Management
---	---
(1)	Financial risk management
---	---

The Group is exposed to market risk, credit risk and liquidity risk. Market risk is the risk related to the changes in market prices, such as foreign exchange rates, interest rates and price fluctuations. The Group implements a risk management system to monitor and manage these specific risks.

The Group’s financial assets consist of cash and cash equivalents, financial instruments, long-term investment securities, accounts receivable – trade and other, etc. Financial liabilities consist of accounts payable – trade and other, borrowings, debentures, lease liabilities and others.

F-110

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

35.	Financial Risk Management, Continued
(1)	Financial risk management, Continued
---	---
1)	Market risk
---	---
(i)	Currency risk
---	---

The Group has currency risk due to revenue and expenses from its global operations. Major foreign currencies where the currency risk occur are USD, EUR and others. The Group determines the currency risk management policy after considering the nature of business and the presence of methods that mitigate the currency risk for each Group entities. The Group manages currency risk arising from business transactions by using currency forwards, etc. Currency risk occurs on forecasted transactions and recognized assets and liabilities which are denominated in a currency other than the functional currency of each group entity.

Monetary assets and liabilities denominated in foreign currencies as of December 31, 2023 are as follows:

(In millions of won, thousands of foreign currencies)
				Liabilities
		Won<br> equivalent		Foreign<br><br> <br>currencies		Won<br> equivalent
	74,608	W	96,200		1,025,369	W	1,322,111
	5,391		7,691		132		188
Others			336				—
		W	104,227			W	1,322,299

All values are in US Dollars.

In addition, the Group has entered into cross currency swaps to hedge against currency risk related to foreign debentures. (See note 22)

As of December 31, 2023, a hypothetical change in exchange rates by 10 % would have increased (decreased) the Group’s profit before income tax and equity as follows:

(In millions of won)
					Equity
		If decreased by 10%			If increased by 10%		If decreased by 10%
	5,521		(5,521	)	W	5,521		(5,521	)
	750		(750	)		750		(750	)
Others	34		(34	)		34		(34	)
	6,305		(6,305	)	W	6,305		(6,305	)

All values are in Euros.

(ii)	Interest rate risk

The interest rate risk of the Group arises from borrowings, debentures and long-term payables – other. Since the Group’s interest-bearing assets are mostly fixed interest bearing assets, the Group’s revenue and operating cash flows from the interest-bearing assets are not influenced by the changes in market interest rates.

The Group performs various analysis to reduce interest rate risk and to optimize its financing. To minimize risks arising from changes in interest rates, the Group takes various measures such as refinancing, renewal, alternative financing and hedging.

F-111

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

35.	Financial Risk Management, Continued
(1)	Financial risk management, Continued
---	---
1)	Market risk, Continued
---	---
(ii)	Interest rate risk, Continued
---	---

As of December 31, 2023, floating-rate borrowings and debentures amount to W 90,000 million and W 386,820 million, respectively, and the Group has entered into interest rate swaps to hedge interest rate risk related to the floating-rate debentures. Therefore, profit before income tax for the year ended December 31, 2023 would not have been affected by the changes in interest rates of floating-rate debentures.

If the interest rate increases (decreases) 1%p with all other variables held constant, profit before income tax and equity for the year ended December 31, 2023 would change by W 900 million in relation to the floating-rate borrowings which have not entered into interest rate swaps.

As of December 31, 2023, the floating-rate long-term payables – other are W 1,290,225 million. If the interest rate increases (decreases) 1%p with all other variables held constant, profit before income tax and equity for the year ended December 31, 2023 would change by W 12,902 million in relation to the floating-rate long-term payables – other that are exposed to interest rate risk.

Interest	rate benchmark reform and associated risks

In case of Korean CD rate, the alternative interest rate benchmark has selected as Korea Overnight Financing Repo Rate(“KOFR”) and as part of interest rate benchmark reform, the interest rate has been disclosed through Korea Securities Depository since November 26, 2021. KOFR is calculated using the overnight RP rate as collateral for government bonds and monetary stabilization bonds. However, unlike LIBOR, calculation of CD rate will not be suspended, thereby making it unclear when and how the transition to KOFR will take place.

Non-derivative financial liabilities

The Parent Company’s non-derivative financial liabilities subject to interest rate benchmark reform as of December 31, 2022 were floating-rate bonds indexed to USD LIBOR. The Group completed discussion with the counterparty about including the fallback clauses as of December 31, 2023.

Derivatives

Most of the Group’s derivative instruments designated as cash flow hedge are governed by contracts based on the International Swaps and Derivatives Association (“ISDA”)’s master agreements. As part of interest rate benchmark reform, ISDA has included a new fallback clause regarding which alternative benchmark interest rate to be applied when the calculation of major IBOR is suspended in the master agreement. The master agreement is applied to derivative contracts executed after January 25, 2021, and the transaction parties are required to adhere to ISDA protocol to include the same fallback clause into derivative contracts executed before January 25, 2021. The Group has adhered to ISDA protocol for transition to the alternative benchmark interest rate and the fallback clause will be included when counterparties adhere to the protocol to include. The Group’s counterparties have adhered to ISDA protocol and agreed to include the fallback clause.

F-112

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

35.	Financial Risk Management, Continued
(1)	Financial risk management, Continued
---	---
1)	Market risk, Continued
---	---

(iii) Price fluctuations risk

As of December 31, 2023, the Group holds equity instruments in an active trading market, exposing it to price fluctuation risk. Assuming all other variables remain constant, the impact on the Group’s profit before income tax and equity resulting from a 10% fluctuation in the per-share stock price of the equity securities for the year ended December 31, 2023 is as follows.

(In millions of won)

Profit before income tax				Equity
If increased by 10%		If decreased by 10%		If increased by 10%		If decreased by 10%
W	—		—	W	85,006		(85,006	)
2)	Credit risk
---	---

The maximum credit exposure as of December 31, 2023 and 2022 are as follows:

(In millions of won)
	December 31, 2023		December 31, 2022
Cash and cash equivalents	W	1,454,773		1,882,093
Financial instruments		295,309		237,605
Investment securities		—		900
Accounts receivable – trade		1,990,849		1,984,772
Contract assets		129,771		132,221
Loans and other receivables		1,055,102		1,241,672
Derivative financial assets		148,534		321,160
	W	5,074,338		5,800,423

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. To manage credit risk, the Group evaluates the credit worthiness of each customer or counterparty considering the party’s financial information, its own trading records and other factors. Based on such information, the Group establishes credit limits for each customer or counterparty.

(i) Accounts receivable – trade and contract assets

The Group establishes a loss allowance in respect of accounts receivable – trade and contract assets. The main components of this allowance are a specific loss component that relates to individually significant exposures and a collective loss component established for groups of similar assets in respect of losses that are expected to occur. The collective loss allowance is determined based on historical data of collection statistics for similar financial assets. Details of changes in loss allowance for the year ended December 31, 2023 are included in note 6.

F-113

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

35.	Financial Risk Management, Continued
(1)	Financial risk management, Continued
---	---
2)	Credit risk, Continued
---	---
(ii)	Debt investments
---	---

The credit risk arises from debt investments included in W 295,309 million of financial instruments, and W 1,055,102 million of loans and other receivables. To limit the exposure to this risk, the Group transacts only with financial institutions with credit ratings that are considered to be low credit risk.

Most of the Group’s debt investments are considered to have a low risk of default and the borrower has a strong capacity to meet its contractual cash flow obligations in the near term. Thus, the Group measured the loss allowance for the debt investments at an amount equal to 12-month expected credit losses.

Meanwhile, the Group monitors changes in credit risk at each reporting date. The Group recognized the loss allowance at an amount equal to lifetime expected credit losses when the credit risk on the debt investments is assumed to have increased significantly if it is more than 30 days past due.

The Group’s maximum exposure to credit risk is equal to each financial asset’s carrying amount. The gross carrying amounts of each financial asset except for the accounts receivable – trade and derivative financial assets as of December 31, 2023 are as follows.

(In millions of won)
			Financial assets at amortized cost
	Financial assets<br> at FVTPL		12-month ECL			Lifetime ECL – not<br> credit impaired			Lifetime ECL – credit<br> impaired
Gross amount	W	336,309		1,009,175			8,914			71,677
Loss allowance		—		(3,314	)		(3,095	)		(69,255	)
Carrying amount	W	336,309		1,005,861			5,819			2,422

Changes in the loss allowance for the debt investments for the year ended December 31, 2023 are as follows:

(In millions of won)
	12-month ECL			Lifetime ECL –<br><br> <br>not credit impaired			Lifetime ECL –<br> credit impaired			Total
December 31, 2022	W	3,081			3,314			83,685			90,080
Remeasurement of loss allowance, net		1,105			3,049			1,102			5,256
Transfer to lifetime ECL – not credit impaired		(868	)		868			—			—
Transfer to lifetime ECL – credit impaired		—			(4,136	)		4,136			—
Amounts written off		(4	)		—			(26,583	)		(26,587	)
Recovery of amounts written off		—			—			6,915			6,915
December 31, 2023	W	3,314			3,095			69,255			75,664

F-114

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

35.	Financial Risk Management, Continued
(1)	Financial risk management, Continued
---	---
2)	Credit risk, Continued
---	---
(iii)	Cash and cash equivalents
---	---

The Group deposits W 1,454,773 million of cash and cash equivalents as of December 31, 2023 ( W 1,882,093 million as of December 31, 2022) at banks and financial institutions with credit ratings above the certain level. Impairment on cash and cash equivalents has been measured on a 12-month expected loss basis and reflects the short maturities of the exposures. The Group considered that its cash and cash equivalents have low credit risk based on the credit ratings of the counterparties assigned by external credit rating agencies.

3)	Liquidity risk

The Group’s approach to managing liquidity is to ensure that it will always maintain sufficient cash and cash equivalents balances and have enough liquidity through various committed credit lines. The Group maintains enough liquidity within credit lines through active operating activities.

Contractual maturities of financial liabilities as of December 31, 2023 are as

(In millions of won)
	Carrying<br> amount		Contractual<br> cash flows		Less than 1<br> year		1 - 5 years		More than 5<br> years
Accounts payable - trade	W	139,876		139,876		139,876		—		—
Borrowings(*)		718,078		739,791		417,056		322,735		—
Debentures(*)		8,325,643		9,532,468		1,493,063		5,800,210		2,239,195
Lease liabilities		1,611,433		1,899,929		386,202		1,026,475		487,252
Accounts payable – other and others(*)		4,539,838		4,614,608		3,642,356		972,202		50
	W	15,334,868		16,926,672		6,078,553		8,121,622		2,726,497
(*)	The contractual cash flow is amount that includes interest payables.
---	---

The Group does not expect that the cash flows included in the maturity analysis could occur significantly earlier or at different amounts.

As of December 31, 2023, periods in which cash flows from cash flow hedge derivatives are expected to occur are as follows:

(In millions of won)	Carrying<br> amount
Assets	W	116,210		123,260		30,928	92,332
Liabilities		(9,212	)	(10,610	)	2,970	(13,580	)
		106,998		112,650		33,898	78,752

F-115

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

35.	Financial Risk Management, Continued
(2)	Capital management
---	---

The Group manages its capital to ensure that it will be able to continue as a going concern while maximizing the return to shareholders through the optimization of its debt and equity structure. The overall strategy of the Group is the same as that of the Group as of and for the year ended December 31, 2022.

The Group monitors its debt-equity ratio as a capital management indicator. This ratio is calculated as total liabilities divided by total equity from the consolidated financial statements.

Debt-equity ratio as of December 31, 2023 and 2022 are as follows:

(In millions of won)
	December 31, 2023			December 31, 2022
Total liabilities	W	17,890,828			19,153,066
Total equity		12,228,399			12,155,196
Debt-equity ratios		146.31	%		157.57	%
(3)	Fair value
---	---
1)	Fair value and carrying amount of financial assets and liabilities including fair value hierarchy as of December 31, 2023 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---	---	---
	December 31, 2023
	Carrying<br> amount		Level 1		Level 2		Level 3		Total
Financial assets that are measured at fair value:
FVTPL	W	962,623		—		649,649		312,974		962,623
Derivative hedging instruments		116,210		—		116,210		—		116,210
FVOCI		1,398,734		1,135,832		—		262,902		1,398,734
	W	2,477,567		1,135,832		765,859		575,876		2,477,567
Financial liabilities that are measured at fair value:
FVTPL		295,876		—		—		295,876		295,876
Derivative hedging instruments		9,212		—		9,212		—		9,212
	W	305,088		—		9,212		295,876		305,088
Financial liabilities that are not measured at fair value:
Borrowings	W	718,078		—		695,320		—		695,320
Debentures		8,325,643		—		8,052,193		—		8,052,193
Long-term payables – other		1,260,453		—		1,294,977		—		1,294,977
	W	10,304,174		—		10,042,490		—		10,042,490

F-116

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

35.	Financial Risk Management, Continued
(3)	Fair value, Continued
---	---
2)	Fair value and carrying amount of financial assets and liabilities including fair value hierarchy as of December 31, 2022 are as follows:
---	---
(In millions of won)	December 31, 2022
---	---	---	---	---	---	---	---	---	---	---
	Carrying<br> amount		Level 1		Level 2		Level 3		Total
Financial assets that are measured at fair value:
FVTPL	W	1,002,164		44,431		727,014		230,719		1,002,164
Derivative hedging instruments		267,151		—		267,151		—		267,151
FVOCI		1,189,597		993,765		—		195,832		1,189,597
	W	2,458,912		1,038,196		994,165		426,551		2,458,912
Financial liabilities that are measured at fair value:
FVTPL	W	302,593		—		—		302,593		302,593
Financial liabilities that are not measured at fair value:
Borrowings	W	936,110		—		911,597		—		911,597
Debentures		8,366,694		—		7,813,420		—		7,813,420
Long-term payables – other		1,638,341		—		1,614,934		—		1,614,934
	W	10,941,145		—		10,339,951		—		10,339,951

The above information does not include fair values of financial assets and liabilities of which fair values have not been measured as carrying amounts are reasonable approximation of fair values.

Fair value of the financial instruments that are traded in an active market (financial assets at FVOCI and financial assets at FVTPL) is measured based on the bid price at the end of the reporting date.

The Group uses various valuation methods for determination of fair value of financial instruments that are not traded in an active market. Derivative financial contracts and long-term liabilities are measured using the discounted present value methods. Other financial assets are determined using the methods such as discounted cash flow and market approach. Inputs used to such valuation methods include swap rate, interest rate, and risk premium, and the Group performs valuation using the inputs which are consistent with natures of assets and liabilities measured.

Interest rates used by the Group for the fair value measurement as of December 31, 2023 are as follows:

	Interest rate
Derivative instruments	2.18% ~ 6.25%
Borrowings and debentures	3.84% ~ 18.12%
Long-term payables – other	3.72% ~ 3.85%

F-117

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

35.	Financial Risk Management, Continued
(3)	Fair value, Continued
---	---
3)	There have been no transfers between Level 1 and Level 2 for the year ended December 31, 2023. The changes of financial instruments classified as Level 3 for the year ended December 31, 2023 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Balance as of<br> January 1, 2023			Gain (loss) for<br> the year			OCI		Acquisition		Disposal			Balance as of<br><br> <br>December 31, 2023
Financial assets
FVTPL	W	230,719			(41,556	)		1,602		157,356		(35,147	)		312,974
FVOCI		195,832			—			14,448		52,622		—			262,902
	W	426,551			(41,556	)		16,050		209,978		(35,147	)		575,876
Financial liabilities
FVTPL	W	(302,593	)		6,717			—		—		—			(295,876	)
(4)	Enforceable master netting agreement or similar agreement
---	---

Carrying amounts of financial instruments recognized of which offset agreements are applicable as of December 31, 2023 and 2022 are as follows:

(In millions of won)	December 31, 2023
	Gross financial<br> instruments<br> recognized		Amount offset			Net financial<br> instruments presented<br> on the consolidated<br> statements of financial<br> position
Financial assets:
Accounts receivable – trade and others	W	194,374		(183,520	)		10,854
Financial liabilities:
Accounts payable – other and others	W	190,630		(183,520	)		7,110
(In millions of won)	December 31, 2022
	Gross financial<br> instruments<br> recognized		Amount offset			Net financial<br> instruments presented<br> on the consolidated<br> statements of financial<br> position
Financial assets:
Accounts receivable – trade and others	W	245,835		(236,921	)		8,914
Financial liabilities:
Accounts payable – other and others	W	244,509		(236,921	)		7,588

F-118

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

36.	Transactions with Related Parties
(1)	List of related parties
---	---
Relationship	Company
---	---
Ultimate controlling entity	SK Inc.
Joint venture	UTC Kakao-SK Telecom ESG Fund
Associates	SK China Company Ltd. and 44 others
Others	The Ultimate controlling entity’s subsidiaries and associates and others

For the periods presented, the Group belongs to SK Group, a conglomerate as defined in the Monopoly Regulation and Fair Trade Act of the Republic of Korea . All of the other entities included in SK Group are considered related parties of the Group.

(2)	Compensation for the key management

The Parent Company considers registered directors who have substantial role and responsibility in planning, operations, and relevant controls of the business as key management. The compensation given to such key management for the years ended December 31, 2023 and 2022 are as follows:

(In millions of won)
	2023		2022		2021
Salaries	W	4,139		3,487		5,956
Defined benefits plan expenses		1,005		761		2,845
Share option		2,542		1,598		146
	W	7,686		5,846		8,947

Compensation for the key management includes salaries, non-monetary salaries and defined benefits made in relation to the pension plan and compensation expenses related to share options granted.

F-119

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

36.	Transactions with Related Parties, Continued
(3)	Transactions with related parties for the years ended December 31, 2023, 2022 and 2021 are as follows:
---	---
(In millions of won)		2023
---	---	---	---	---	---	---	---
Scope	Company	Operating<br> revenue and<br> others		Operating<br> expense and<br> others(*1)		Acquisition of<br> property and<br> equipment<br> and others
Ultimate Controlling Entity	SK Inc.(*2)	W	21,438		633,265		120,926
Associates	F&U Credit information Co., Ltd.		3,876		49,398		552
	SK USA, Inc.		—		5,384		—
	Daehan Kanggun BcN Co., Ltd.		12,972		—		—
	Others(*3)		8,806		15,962		865
			25,654		70,744		1,417
Others	SK Innovation Co., Ltd.		33,571		18,977		—
	SK Energy Co., Ltd.		4,113		540		—
	SK Geo Centric Co., Ltd.		835		2		—
	SK Networks Co., Ltd.(*4)		5,876		970,662		1
	SK Networks Service Co., Ltd.		5,471		72,274		8,393
	SK Ecoplant Co., Ltd.		2,547		—		—
	SK hynix Inc.		58,725		178		—
	SK Shieldus Co., Ltd.		59,974		147,333		26,021
	Content Wavve Corp.		14,524		87,263		176
	Eleven Street Co., Ltd.		72,683		34,053		—
	SK Planet Co., Ltd.		18,308		88,250		16,338
	SK RENT A CAR Co., Ltd.		14,023		20,231		—
	SK Magic Co., Ltd.		1,632		1,142		—
	Tmap Mobility Co., Ltd.		24,862		10,003		—
	Onestore Co., Ltd.		16,265		166		—
	Dreamus Company		6,202		77,452		284
	UNA Engineering Inc.<br><br>(Formerly, UbiNS Co., Ltd.)		172		50,263		52,733
	Happy Narae Co., Ltd.		1,472		35,461		92,375
	Others		52,039		21,884		13,292
			393,294		1,636,134		209,613
		W	440,386		2,340,143		331,956
(*1)	Operating expenses and others include lease payments by the Group.
---	---
(*2)	Operating expenses and others include <br>W<br>218,019 million of dividends paid by the Parent Company.
---	---
(*3)	Operating revenue and others include <br>W<br>8,806 million of dividends received which was deducted from the investment in associates.
---	---
(*4)	Operating expenses and others include costs for handset purchases amounting to <br>W<br>915,339 million.
---	---

F-120

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

36.	Transactions with Related Parties, Continued
(3)	Transactions with related parties for the years ended December 31, 2023, 2022 and 2021 are as follows, Continued:
---	---
(In millions of won)		2022
---	---	---	---	---	---	---	---
Scope	Company	Operating<br> revenue and<br> others		Operating<br> expense and<br> others(*1)		Acquisition of<br><br> <br>property and<br> equipment<br> and others
Ultimate Controlling Entity	SK Inc.(*2)	W	22,162		662,247		114,895
Associates	F&U Credit information Co., Ltd.		3,490		49,227		265
	HanaCard Co., Ltd.(*3)		8,932		1,820		22
	Daehan Kanggun BcN Co., Ltd.		20,290		—		—
	Others(*4)		13,795		5,608		80
			46,507		56,655		367
Others	SK Innovation Co., Ltd.		27,524		19,598		—
	SK Energy Co., Ltd.		4,585		710		—
	SK Geo Centric Co., Ltd.		925		1		—
	SK Networks Co., Ltd.(*5)		4,312		904,320		288
	SK Networks Service Co., Ltd.		6,110		71,432		7,891
	SK Ecoplant Co., Ltd.		3,330		112		—
	SK hynix Inc.		60,933		75		—
	SK Shieldus Co., Ltd.		39,455		147,731		35,854
	Content Wavve Corp.		6,797		108,760		229
	Eleven Street Co., Ltd.		71,972		31,589		—
	SK Planet Co., Ltd.		19,753		95,261		17,481
	SK RENT A CAR Co., Ltd.		14,992		15,891		—
	SK Magic Co., Ltd.		2,204		1,071		—
	Tmap Mobility Co., Ltd.		22,011		4,973		892
	Onestore Co., Ltd.		17,181		24		—
	Dreamus Company		7,235		85,193		649
	UNA Engineering Inc.<br><br>(Formerly, UbiNS Co., Ltd.)		283		46,222		53,897
	Happy Narae Co., Ltd.		1,637		24,727		143,188
	Others		40,058		29,610		20,555
			351,297		1,587,300		280,924
		W	419,966		2,306,202		396,186
(*1)	Operating expenses and others include lease payments paid by the Group.
---	---
(*2)	Operating expenses and others include <br>W<br>272,524 million of dividends declared to be paid by the Parent Company.
---	---
(*3)	HanaCard Co., Ltd. was excluded from the related parties due to the disposal of the Group’s shares in the entity for the year ended December 31, 2022, and the transactions above occurred before the disposal.
---	---
(*4)	Operating revenue and others include <br>W<br>13,700 million of dividends deducted from the investment in associates as a result of receipt by the Group.
---	---
(*5)	Operating expenses and others include costs for handset purchases amounting to <br>W<br>844,157 million.
---	---

F-121

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

36.	Transactions with Related Parties, Continued
(3)	Transactions with related parties for the years ended December 31, 2023, 2022 and 2021 are as follows, Continued:
---	---
(In millions of won)		2021
---	---	---	---	---	---	---	---
Scope	Company	Operating<br> revenue and<br> others		Operating<br> expense<br> and<br> others(*1)		Acquisition of<br> property and<br> equipment<br> and others
Ultimate Controlling Entity	SK Inc.(*2)	W	33,253		633,868		82,191
Associates	F&U Credit information Co., Ltd.		3,828		50,029		—
	HanaCard Co., Ltd.		17,962		4,374		—
	SK Wyverns Co., Ltd.(*3)		202		8,203		—
	Daehan Kanggun BcN Co., Ltd.		10,943		—		—
	SK China Company Ltd.(*4)		131,141		—		—
	Others(*5)		11,778		8,356		—
			175,854		70,962		—
Others	SK Innovation Co., Ltd.		53,445		19,093		—
	SK Energy Co., Ltd.		18,970		1,250		—
	SK Geo Centric Co., Ltd.		33,435		9		—
	SK TNS Co., Ltd.(*3)		75		6,868		57,903
	SKC Infra Service Co., Ltd.(*3)		26		30,798		8,028
	SK Networks Co., Ltd.(*6)		14,439		1,055,512		24
	SK Networks Service Co., Ltd.		7,292		73,596		3,520
	SK hynix Inc.(*7)		285,104		199		—
	Happy Narae Co., Ltd.		6,899		20,229		133,625
	SK Shieldus Co., Ltd.(*8)		5,793		18,861		20,382
	Content Wavve Co., Ltd.		174		78,964		—
	Eleven Street Co., Ltd.		2,785		5,699		—
	SK Planet Co., Ltd.		2,048		16,747		6,081
	SK hynix Semiconductor (China) Ltd.		48,546		—		—
	SK hynix system ic (Wuxi) Co., Ltd.		20,807		—		—
	SK ON Hungary Kft.		38,413		—		—
	SK RENT A CAR Co., Ltd.		5,843		18,564		—
	Dreamus Company		795		20,074		396
	SK m&service Co., Ltd.		764		3,670		888
	UNA Engineering Inc.<br><br>(Formerly, UbiNS Co., Ltd.)		415		42,335		50,847
	Others		156,055		30,762		23,428
			702,123		1,443,230		305,122
		W	911,230		2,148,060		387,313
(*1)	Operating expense and others include lease payments paid by the Group.
---	---
(*2)	Operating expense and others include <br>W<br>248,677 million of dividends paid by the Parent Company.
---	---
(*3)	Transactions occurred before the related party relationship terminated.
---	---

F-122

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

36.	Transactions with Related Parties, Continued
(3)	Transactions with related parties for the years ended December 31, 2023, 2022 and 2021 are as follows, Continued:
---	---
(*4)	Operating revenue and others include <br>W<br>131,141 million of dividends that were received from SK China Company Ltd. and deducted from the investment in associates.
---	---
(*5)	Operating revenue and others include <br>W<br>10,716 million of dividends that were received from Korea IT Fund which was deducted from the investment in associates.
---	---
(*6)	Operating expenses and others include costs for handset purchases amounting to <br>W<br>996,910 million.
---	---
(*7)	Operating revenue and others include <br>W<br>170,937 million of dividend income received from SK hynix Inc.
---	---
(*8)	Operating revenue and others include <br>W<br>9,637 million of dividend income received from SK Shieldus Co., Ltd. (Formerly, ADT CAPS Co., Ltd.).
---	---
(4)	Account balances with related parties as of December 31, 2023 and 2022 are as follows:
---	---
(In millions of won)		December 31, 2023
---	---	---	---	---	---	---	---
		Receivables				Payables
Scope	Company	Loans		Accounts<br> receivable –<br> trade, etc.		Accounts<br> payable –<br> other, etc.
Ultimate Controlling Entity	SK Inc.	W	—		1,535		106,546
Associates	F&U Credit information Co., Ltd.		—		325		4,417
	Daehan Kanggun BcN Co., Ltd.(*1)		22,147		4,701		—
	Others		—		3,910		3,476
			22,147		8,936		7,893
Others	SK Innovation Co., Ltd.		—		8,697		28,646
	SK Networks Co., Ltd.		—		120		156,316
	Mintit Co., Ltd.		—		17,036		—
	SK hynix Inc.		—		8,022		2,251
	Happy Narae Co., Ltd.		—		101		5,686
	SK Shieldus Co., Ltd.		—		12,723		14,784
	Content Wavve Corp.		—		1,476		2
	Incross Co., Ltd.		—		2,239		943
	Eleven Street Co., Ltd.		—		6,138		6,103
	SK Planet Co., Ltd.		—		9,981		18,833
	SK RENT A CAR Co., Ltd.		—		866		33,365
	UNA Engineering Inc.<br><br>(Formerly, UbiNS Co., Ltd.)		—		1		10,764
	Others(*2)		—		15,082		30,184
			—		82,482		307,877
		W	22,147		92,953		422,316
(*1)	As of December 31, 2023, the Parent Company recognized loss allowance for the entire balance of loans to Daehan Kanggun BcN Co., Ltd.
---	---

F-123

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

36.	Transactions with Related Parties, Continued
(4)	Account balances with related parties as of December 31, 2023 and 2022 are as follows, Continued:
---	---
(*2)	During the year ended December 31, 2022, SK Telecom Innovation Fund, L.P., a subsidiary of the Parent Company, entered into a convertible loan agreement for USD 13,000,000 with id Quantique SA, classified as an other related party. SK Telecom Innovation Fund, L.P. acquired shares of id Quantique SA amounting to USD 26,731,250, including common shares converted from the entire balance of loan for the year ended December 31, 2023
---	---
(In millions of won)		December 31, 2022
---	---	---	---	---	---	---	---
		Receivables				Payables
Scope	Company	Loans		Accounts<br> receivable –<br> trade, etc.		Accounts<br> payable –<br> other, etc.
Ultimate Controlling Entity	SK Inc.	W	—		2,383		103,141
Associates	F&U Credit information Co., Ltd.		—		64		5,682
	SK USA, Inc.		—		—		1,519
	Wave City Development Co., Ltd.(*1)		—		901		—
	Daehan Kanggun BcN Co., Ltd.(*2)		22,147		3,199		—
	Others		—		—		65
			22,147		4,164		7266
Others	SK Innovation Co., Ltd.		—		9,726		33,091
	SK Networks Co., Ltd.		—		488		113,943
	Mintit Co., Ltd.		—		35,058		3
	SK hynix Inc.		—		15,494		311
	Happy Narae Co., Ltd.		—		31		31,979
	SK Shieldus Co., Ltd.		—		14,035		17,447
	Content Wavve Corp.		—		349		19,244
	Incross Co., Ltd.		—		3,774		16,152
	Eleven Street Co., Ltd.		—		6,797		13,026
	SK Planet Co., Ltd.		—		8,190		43,238
	SK RENT A CAR Co., Ltd.		—		1,291		22,895
	UNA Engineering Inc.<br><br>(Formerly, UbiNS Co., Ltd.)		—		—		21,179
	Others(*3)		16,475		13,996		41,890
			16,475		109,229		374,398
		W	38,622		115,776		484,805
(*1)	As of December 31, 2022, the Parent Company recognized loss allowance amounting to <br>W<br>379 million for accounts receivable – trade.
---	---
(*2)	As of December 31, 2022, the Parent Company recognized full loss allowance for the balance of loans to Daehan Kanggun BcN Co., Ltd.
---	---
(*3)	During the year ended December 31, 2022, SK Telecom Innovation Fund, L.P., a subsidiary of the Parent Company, entered into a convertible loan agreement for USD 13,000,000 with id Quantique SA, classified as an other related party.
---	---

F-124

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

36.	Transactions with Related Parties, Continued
(4)	Account balances with related parties as of December 31, 2023 and 2022 are as follows, Continued:
---	---
(5)	The Group has granted SK REIT Co., Ltd. The right of first offer regarding the disposal of real estate owned by the Group. Whereby, the negotiation period is within 3 to 5 years from June 30, 2021, date of agreement, and the Group has been granted the right by SK REIT Co., Ltd. to lease the real estate in preference to a third party if SK REIT Co., Ltd. purchases the real estate from the Group.
---	---
(6)	The details of additional investments and disposal of associates and joint ventures for the year ended December 31, 2023 are as presented in note 12.
---	---
37.	Commitments and Contingencies
---	---
(1)	Collateral assets and commitments
---	---

SK Broadband Co., Ltd., a subsidiary of the Parent Company, has pledged its properties as collateral for leases on buildings in the amount of W 1,228 million as of December 31, 2023.

(2)	Legal claims and litigations

As of December 31, 2023, the Group is involved in various legal claims and litigation. Provision recognized in relation to these claims and litigation is immaterial. In connection with those legal claims and litigation for which no provision was recognized, management does not believe the Group has a present obligation, nor is it expected any of these claims or litigation will have a material impact on the Group’s financial position or operating results in the event an outflow of resources is ultimately necessary.

(3)	Accounts receivable from sale of handsets

The sales agents of the Parent Company sell handsets to the Parent Company’s subscribers on an installment basis. The Parent Company entered into comprehensive agreements to purchase accounts receivable from handset sales with retail stores and authorized dealers and to transfer the accounts receivable from handset sales to special purpose companies which were established with the purpose of liquidating receivables, respectively.

The accounts receivable from sale of handsets amounting to W 291,747 million and W 357,467 million as of December 31, 2023 and 2022, respectively, which the Parent Company purchased according to the relevant comprehensive agreement are recognized as accounts receivable – other and long-term accounts receivable – other.

(4)	Obligation relating to spin-off

The Parent Company carried out the spin-off of its business of managing investments in semiconductor, New Information and Communication Technologies(“ICT”) and other businesses and making new investments on November 1, 2021. The Parent Company has obligation to jointly and severally reimburse the Parent Company’s liabilities incurred prior to the spin-off with SK Square Co., Ltd., the spin-off company, in accordance with Article 530-9 (1) of Korean Commercial Act.

F-125

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

37.	Commitments and Contingencies, Continued
(5)	Commitment of the acquisition and disposal of shares
---	---

The Board of Directors of the Parent Company resolved the acquisition and disposal of certain shares in order to strengthen the strategic alliance with Hana Financial Group Inc.(“HFG”) at the Board of Directors’ meeting held on July 22, 2022. In accordance with the resolution, as of July 27, 2022, the Parent Company disposed of its entire common shares of HanaCard Co., Ltd. (39,902,323 shares) and entire common shares of Finnq Co., Ltd. (6,370,000 shares) to HFG for W 330,032 million and W 5,733 million, respectively. Through the agreement with HFG, the Parent Company is obligated to acquire HFG’s common shares from July 27, 2022 to January 31, 2024, after depositing W 330,032 million in a specific money trust, and the Parent Company completed the acquisition of the shares for the year ended December 31, 2022. As a part of the aforementioned transaction, as of July 27, 2022, the Parent Company disposed of its entire common shares of SK Square Co., Ltd. (767,011 shares) to HanaCard Co., Ltd. for W 31,563 million, and HanaCard Co., Ltd. is obligated to acquire the Parent Company’s common shares from July 27, 2022 to January 31, 2024, after depositing W 68,437 million in a specific money trust, and completed the acquisition of the shares for the year ended December 31, 2022. The Parent Company, HFG, and HanaCard Co., Ltd. may not dispose of shares they have acquired under the aforementioned transaction until March 31, 2025.

(6)

The acquisition cost of property and equipment and intangible assets to be incurred in subsequent periods under arrangements is W 44,202 million as of December 31, 2023.

(7)

According to the covenant for bond issuance and borrowings, the Group is required to maintain specific financial ratios, such as the debt ratio, at certain levels. The funds obtained must be used for specified purposes only, and regular reporting to lenders is mandated. Additionally, the contracts include clauses that restrict both provision of additional collateral of assets held by the Group and disposal of certain assets.

---

F-126

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

38.	Statements of Cash Flows
(1)	Adjustments for income and expenses from operating activities for the years ended December 31, 2023, 2022 and 2021 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---	---
	2023			2022			2021
Interest income	W	(70,055	)		(58,472	)		(43,850	)
Dividends		(43,014	)		(2,552	)		(14,132	)
Gain on foreign currency translations		(1,199	)		(2,095	)		(10,753	)
Gain on sale of accounts receivable – other		—			(1,043	)		(27,725	)
Gain (loss) relating to investments in associates and joint ventures, net		(10,928	)		81,707			(1,948,447	)
Gain on disposal of property and equipment and intangible assets		(21,898	)		(15,985	)		(40,109	)
Gain on business transfer		—			—			(82,248	)
Gain relating to financial instruments at FVTPL		(115,043	)		(94,393	)		(91,244	)
Other income		—			(6,515	)		(10,369	)
Interest expense		389,813			328,307			342,342
Loss on foreign currency translations		1,227			3,814			8,005
Loss on sale of accounts receivables-other		65,027			61,841			—
Income tax expense		342,242			288,321			651,948
Expense related to defined benefit plan		124,439			134,509			190,462
Share option		18,889			84,463			91,646
Bonus paid by treasury shares		20,420			25,425			29,643
Depreciation and amortization		3,750,796			3,755,312			4,114,394
Bad debt for accounts receivables – trade		37,906			27,053			31,546
Loss on disposal of property and equipment and intangible assets		9,369			20,465			47,369
Impairment loss on property and equipment and intangible assets		10,369			17,027			3,135
Bad debt for accounts receivable – other		5,256			3,011			6,001
Loss relating to financial instruments at FVTPL		49,641			41,597			76,142
Loss on disposal of investment assets		—			1,283			—
Other financial fees		—			—			142,015
Other expenses		—			26,358			8,008
Other income (expenses)		(16,919	)		—			—
	W	4,546,338			4,719,438			3,473,779

F-127

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

38.	Statements of Cash Flows, Continued
(2)	Changes in assets and liabilities from operating activities for the years ended December 31, 2023, 2022 and 2021 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---	---
	2023			2022			2021
Accounts receivable – trade	W	(46,531	)		(60,546	)		(95,374	)
Accounts receivable – other		79,223			54,988			(152,038	)
Advanced payments		3,986			(25,377	)		(43,212	)
Prepaid expenses		(2,262	)		11,989			77,404
Inventories		(17,549	)		39,633			(70,601	)
Long-term accounts receivable – other		66,036			(74,729	)		83,658
Contract assets		3,877			(13,400	)		(11,582	)
Guarantee deposits		(2,117	)		6,245			8,125
Accounts payable – trade		50,442			(101,465	)		12,312
Accounts payable – other		(188,318	)		369,693			(109,476	)
Withholdings		(3,714	)		4,964			(55,925	)
Contract liabilities		(19,620	)		18,910			(2,158	)
Deposits received		(1,744	)		99			(3,737	)
Accrued expenses		(73,734	)		116,039			7,505
Provisions		(566	)		(20	)		(19,324	)
Long-term provisions		(1,061	)		(13,792	)		(260	)
Plan assets		(17,772	)		(132,131	)		(51,697	)
Retirement benefits payment		(99,396	)		(79,117	)		(114,897	)
Others		(3,343	)		(3,877	)		(27,418	)
	W	(274,163	)		118,106			(568,695	)
(3)	Significant non-cash transactions for the years ended December 31, 2023, 2022 and 2021 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---
	2023			2022			2021
Increase (decrease) in accounts payable – other relating to the acquisition of property and equipment and intangible assets	W	(305,823	)		(39,977	)		1,063,800
Increase of right-of-use assets		345,761			720,932			672,723
Change in assets and liabilities by spin-off (Note 41)		—			—			14,379,397
Retirement of treasury shares		—			—			1,965,952
Disposal of treasury shares (Congratulatory bonus for spin-off)		—			—			114,373
Transfer from property and equipment to investment property		13,900			4,732			23,034

F-128

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

38.	Statements of Cash Flows, Continued
(4)	Reconciliation of liabilities arising from financing activities for the years ended December 31, 2023 and 2022 are as follows:
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	2023
	January 1,<br> 2023			Cash flows			Non-cash transactions
					Exchange rate<br> changes(*)				Fair value<br> changes		Other<br> changes		December 31,<br> 2023
Total liabilities from financing activities:
Short-term borrowings	W	142,998			(142,998	)		—		—		—		—
Long-term borrowings		793,113			(75,050	)		—		—		15		718,078
Debentures		8,366,693			(84,082	)		36,701		—		6,331		8,325,643
Lease liabilities		1,782,057			(402,465	)		—		—		231,841		1,611,433
Long-term payables – other		1,638,341			(400,245	)		—		—		22,357		1,260,453
Derivative financial liabilities		—			—			—		(9,212	)	—		(9,212	)
Derivative financial assets		(267,151	)		183,090			—		(32,149	)	—		(116,210	)
	W	12,456,051			(921,750	)		36,701		(41,361	)	260,544		11,790,185
Other cash flows from financing activities:
Payments of cash dividends				W	(773,806	)
Payments of interest on hybrid bonds					(17,283	)
Acquisition of treasury shares					(285,487	)
Proceeds of hybrid bonds					398,509
Redemption<br> of hybrid bonds					(400,000	)
Cash inflow from transactions with the non-controlling shareholders					160
Cash outflow from transactions with the non-controlling shareholders					(21,333	)
					(1,099,240	)
				W	(2,020,990	)
(*)	The effect of changes in foreign exchange rates for financial liabilities at amortized cost.
---	---

F-129

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

38.	Statements of Cash Flows, Continued
(4)	Reconciliation of liabilities arising from financing activities for the years ended December 31, 2023 and 2022 are as follows, Continued:
---	---
(In millions of won)
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	2022
	January 1,<br> 2022			Cash<br> flows			Non-cash transactions								December 31,<br> 2022
					Exchange<br> rate<br> changes(*)				Fair<br><br> <br>value<br> changes		Business<br><br> <br>combina-<br> tions		Other<br> changes
Total liabilities from financing activities:
Short-term borrowings	W	12,998			130,000			—		—		—		—		142,998
Long-term borrowings		394,187			398,529			—		—		—		397		793,113
Debentures		8,426,683			(189,878	)		122,350		—		—		7,538		8,366,693
Lease liabilities		1,534,281			(401,054	)		—		—		6,503		642,327		1,782,057
Long-term payables – other		2,009,833			(400,245	)		—		—		—		28,753		1,638,341
Derivative financial liabilities		111			—			—		(111	)	—		—		—
Derivative financial assets		(182,661	)		768			—		(85,258	)	—		—		(267,151	)
	W	12,195,432			(461,880	)		122,350		(85,369	)	6,503		679,015		12,456,051
Other cash flows from financing activities:
Payments of cash dividends				W	(904,020	)
Payments of interest on hybrid bonds					(14,766	)
Cash inflow from transactions with the <br>non-controlling<br> shareholders					31,151
Cash outflow from transactions with the <br>non-controlling<br> shareholders					(367	)
					(888,002	)
				W	(1,349,882	)
(*)	The effect of changes in foreign exchange rates for financial liabilities at amortized cost.
---	---

F-130

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

39.	Emissions Liabilities
(1)	The quantity of emissions rights allocated free of charge for each implementation year as of December 31, 2023 are as follows:
---	---
(In tCO2-eQ)
---	---	---	---	---	---	---	---	---	---	---	---	---
	Quantities<br><br> <br>allocated<br><br> <br>in 2021		Quantities<br> allocated<br><br> <br>in 2022		Quantities<br> allocated<br><br> <br>in 2023		Quantities<br> allocated<br><br> <br>In 2024		Quantities<br> allocated<br><br> <br>in 2025		Total
Emissions rights allocated free of charge(*)		1,385,433		1,602,751		1,443,977		1,300,465		1,300,465		7,033,091
(*)	The changes in quantity due to additional allocation, cancellation of allocation and others are considered.
---	---
(2)	Changes in emissions rights quantities the Group held are as follows:
---	---
(In tCO2-eQ)
---	---	---	---	---	---	---	---	---	---	---	---	---
	Quantities<br><br> <br>allocated in<br> 2021			Quantities<br> allocated in<br> 2022			Quantities<br> allocated in<br> 2023			Total
Beginning		—			—			306,575			306,575
Allocation at no cost		1,385,433			1,602,751			1,443,977			4,432,161
Purchase		—			213,609			—			213,609
Surrender or shall be surrendered		(1,421,570	)		(1,515,595	)		(1,657,664	)		(4,594,829	)
Borrowed		36,137			5,810			—			41,947
Ending		—			306,575			92,888			399,463
(3)	As of December 31, 2023, the estimated annual greenhouse gas emissions quantities of the Group are 1,657,664 tCO2-eQ.
---	---
40.	Non-current Assets Held for Sale
---	---

Non-current assets held for sale as of December 31, 2023 and 2022 are as follows:

(In millions of won)
		December 31, 2023		December 31, 2022
Investments in associates	Daekyo Wipoongdangdang Contents Korea Fund	W	746		1,062
Long-term Investment securities	Digital Content Korea Fund		3,395		3,645
	InterVest Fund		—		107
	Central Fusion Content Fund		884		1,563
	P&I Cultural Innovation Fund		1,892		—
Inventories	—		505		—
Prepaid Expenses	—		1,489		—
Property and Equipment	—		1,604		—
		W	10,515		6,377

F-131

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

41.	Spin-off
(1)	In accordance with the resolution of the Board of Directors held on June 10, 2021 and shareholders’ meeting held on October 12, 2021, the Parent Company completed the spin-off of its business of managing investments in semiconductor, New Information and Communication Technologies(“ICT”) and other business making new investments on November 1, 2021, and the registration of the spin-off was completed as of November 2, 2021. The details of the spin-off are as follows:
---	---
Method of spin-off	Horizontal spin-off
---	---
Company	SK Telecom Co., Ltd. (Surviving Company)
	SK Square Co., Ltd. (Spin-off Company)
Effective date of spin-off	November 1, 2021
(2)	The details of financial information due to the spin-off of its business of managing investments in semiconductor, New ICT and other business and making new investments are as follows:
---	---
1)	Statements of Income
---	---

The details of profit or loss from discontinued operations for the year ended December 31, 2021 are as follows:

(In millions of won)
	2021
Operating revenue and other operating income	W	2,469,329
Revenue		2,383,083
Other income		86,246
Operating expenses:		2,396,324
Labor		824,505
Commission		349,344
Depreciation and amortization		287,412
Network interconnection		863
Advertising		158,512
Rent		2,754
Cost of goods sold		426,161
Others		346,773
Operating profit		73,005
Finance income		47,417
Finance costs		269,823
Gain relating to investments in subsidiaries, associates and joint ventures,		1,502,147
Profit before income tax		1,352,746
Income tax expense		205,152
Profit from discontinued operations, net of taxes	W	1,147,594

F-132

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

41.	Spin-off, Continued
(2)	The details of financial information due to the spin-off of its business of managing investments in semiconductor, New ICT and other business and making new investments are as follows, Continued:
---	---
2)	Statements of Cash Flows
---	---

The details of cash flows from discontinued operations for the year ended December 31, 2021 are as follows:

(In millions of won)
	2021
Cash flows from operating activities	W	59,255
Cash flows from investing activities		(967,053	)
Cash flows from investing activities		(88,872	)
(3)	The details of assets and liabilities derecognized from the financial statements due to the spin-off of its business of managing investments in semiconductor, New ICT and other business and making new investments are as follows. Subsequent to the spin-off, the Parent Company lost control over the related businesses. The spin-off was accounted for by derecognizing all related assets and liabilities. The net assets of the spin-off business as of the spin-off date was recognized in capital surplus and others.
---	---
(In millions of won)
---	---	---
	Amount
Current assets	W	2,608,601
Non-current assets		19,269,615
Total assets	W	21,878,216
Current liabilities	W	2,161,458
Non-current liabilities		4,676,324
Total liabilities	W	6,837,782
Net assets	W	15,040,434
(4)	As of November 1, 2021, the Parent Company has split the business division for the purpose of new investments and management of shares in related investee companies belong to semiconductors and New ICT sector. The Parent Company has the obligation to jointly and severally reimburse the liabilities incurred by the Parent Company prior to the spin-off with SK Square Co., Ltd., the spin-off company, in accordance with Article 530-9 (1) of Korean Commercial Act.
---	---
42.	Cash Dividends paid to the Parent Company
---	---

Cash dividends paid to the Parent Company for the years ended December 31, 2023, 2022 and 2021 are as follows:

(In millions of won)
	2023		2022		2021
Cash dividends received from consolidated subsidiaries	W	159,539		35,733		12,646
Cash dividends received from associates		8,806		13,700		312,793
	W	168,345		49,443		325,439

F-133

Table of Contents

SK TELECOM CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023, 2022 and 2021

43.	Subsequent Events
(1)	On January 25, 2024, the Board of Directors of the Parent Company approved the disposal of treasury shares and details of the transaction are as follows:
---	---
	Information of disposal
---	---
Number of treasury shares	498,135 Common shares
Price of the treasury shares (in won)	Per share <br>W<br>49,600
Aggregate disposal value	W<br>24,707 million
Disposal date	January 29, 2024
Purpose of disposal	Allotment of shares as bonus payment
Method of disposal	Over-the-counter
(2)	The Board of Directors of the Parent Company approved the acquisition and retirement of treasury shares of the Parent Company at the Board of Directors’ meeting held on July 26, 2023. The Parent Company acquired a total of <br>6,090,410<br> shares during the period from July 27, 2023 to January 26, 2024 through a trust agreement and <br>4,043,091<br> shares were retired on February<br>5<br>, 2024.
---	---

F-134

EX-1.1

Exhibit 1.1

ARTICLES OF INCORPORATION

PREMISE

The Company will pursue the happiness of its members as the ultimate purpose of business management, and the members will contribute to the sustainability of long-term benefits for the shareholders and the happiness of the stakeholders. For this purpose, the Company will establish its management philosophy as follows and carry out its management activities based thereon.

To pursue the sustainable happiness of the members, the Company must maintain stability and growth and continuously survive and develop. To achieve this, the members will simultaneously pursue the happiness of the members and of the stakeholders. All value that the company creates for the happiness of its stakeholders is social value. The company will elevate its economic value and develop a relationship of trust with its stakeholders.

Earn customers’ trust by offering and satisfying them with a variety of values and ultimately develop together with the customers.

Build a fair and competitive business ecosystem with business partners, and achieve mutual development through cooperation based on this ecosystem.

Raise the company value by continuously creating shareholder value.

Grow together with our society while making various contributions such as environmental protection, job creation, improvement in the quality of life, and the support of local communities.

The members will make consistent efforts to keep the happiness of the stakeholders in harmonious balance and at the same time consider the present and future happiness in order to ensure the longevity of the stakeholders (wholly amended on March 26, 2020).

CHAPTER 1. GENERAL PROVISIONS

Article1. Corporate Name

The name of the Company shall be “SK Telecom Chusik Hoesa” (hereafter “Company”), which shall be written in English as “SK Telecom Co., Ltd.” (amended on March 21, 1997).

Article 1-2. CorporateGovernance Charter

The Company shall constitute a Corporate Governance Charter encompassing its purpose and plans to develop its continued efforts to establish transparent and sound corporate governance (newly established on March 25, 2021).

Article 2. Objectives

(1)	The objectives of the Company are as follows: rational management of the telecommunications business,<br>development of the telecommunications technology and contribution to public welfare and convenience (amended on March 20, 1992).
(2)	In order to achieve the above objectives, the Company carries on the following businesses:<br>
---	---
1.	Information and communication business (amended on March 17, 2000);
---	---
2.	Sale and lease of handsets business;
---	---

3.	New media business;
4.	Advertising business;
---	---
5.	Mail order sales business;
---	---
6.	Real estate business (development, management, leasing, etc.) and chattel leasing business (amended on<br>March 12, 2010);
---	---
7.	Research and technology development relating to Items 1 through 4;
---	---
8.	Overseas and import/export business relating to Items 1 through 4;
---	---
9.	Manufacturing and distribution business relating to Items 1 through 4;
---	---
10.	Travel business (established on March 10, 2006);
---	---
11.	Electronic financial business (amended on March 14, 2008);
---	---
12.	Film industry (production, import, distribution and showing) (established on March 14, 2008);<br>
---	---
13.	Lifetime education and lifetime educational facilities management (established on March 12, 2010);<br>
---	---
14.	Electric engineering business (established on March 12, 2010);
---	---
15.	Information and communication related engineering business (established on March 12, 2010);<br>
---	---
16.	Ubiquitous city construction and related services business (established on March 12, 2010);<br>
---	---
17.	Related businesses through investment in, management and operation of, domestic and foreign subsidiaries and<br>invested companies (established on August 31, 2011);
---	---
18.	Construction business including machine equipment work, etc. (newly established on March 22, 2013);<br>
---	---
19.	Import/export business, import/export brokerage and/or agency business (established on March 20, 2015);<br>
---	---
20.	Electric utility business including smart grid business, etc. (newly established on March 18, 2016);<br>
---	---
21.	Data production, trading and utilization business, including MyData business (newly established on<br>March 25, 2022);
---	---
22.	Manufacture, import, maintenance, sale and lease of medial equipment and veterinary medical equipment business<br>(newly established on March 25, 2022); and
---	---
23.	Any other incidental businesses relating to the foregoing activities (amended on March 18, 2016, amended<br>on March 25, 2022).
---	---
(3)	To accomplish the above businesses effectively, parts of the businesses could be delegated in accordance with<br>resolutions of the Board of Directors (established on August 14, 1989).
---	---

Article 3. Head Office and Other Offices

The Company shall have its head office in Seoul and may establish sub-organizations in the place as required by a resolution of the Board of Directors.

Article 4. Method of Public Notice

Public notices by the Company shall be given on the Company’s Internet homepage (http://www.sktelecom.com). However, if public notices cannot be given on such homepage due to network failure or other inevitable reasons, they shall be given by publication in “Hankuk Kyungje Shinmoon”, a daily newspaper published in Seoul (amended on March 21, 2014).

CHAPTER 2. SHARES

Article 5. Total Number of Shares to be Issued

The total number of shares to be issued by the Company shall be six hundred seventy million (670,000,000) shares (amended on March 17, 2000, amended on October 12, 2021).

Article 6. Par Value of a Share

The par value of a share issued by the Company shall be one hundred (100) Won per share (amended on March 17, 2000, amended on October 12, 2021).

Article7. Classes Shares

The classes of shares to be issued by the Company shall be common shares and preferred shares (amended on March 26, 2019).

Article 8. Number and Characteristics of Preferred Shares

(1)	The preferred shares to be issued by the Company shall be of non-voting<br>right, and the number thereof shall be Five Million Five Hundred Thousand (5,500,000) shares (amended on March 21, 1997).
(2)	The dividend on the preferred shares shall be an amount not less than 9% and not more than 25% of par value, as<br>determined by the Board of Directors at the time of issuance of the relevant shares (amended on March 21, 1997).
---	---
(3)	In case the dividend ratio of the common shares exceeds that of the preferred shares, the Shareholder of the<br>preferred shares shall be allotted at the dividend ratio of the common shares (established on March 21, 1997).
---	---
(4)	If any dividends on preferred shares cannot be paid from the profits of the fiscal year concerned, then the<br>holders of such preferred shares shall have the right of preference to receive accumulated dividends unpaid for such year at the time of distribution of dividends on preferred shares for the succeeding fiscal year (amended on March 21, 1997).<br>
---	---
(5)	If a resolution not to pay dividends on preferred shares is adopted, then the preferred shares shall be deemed<br>to have voting rights from the time of the General Meeting of Shareholders following the General Meeting at which such resolution not to pay dividends on preferred shares is adopted to the time of the end of the General Meeting of the Shareholders<br>at which a resolution to pay dividends on such preferred shares is adopted (established on August 14, 1989).
---	---
(6)	In case the Company issues new shares by paid-in capital increase or non-paid-in capital increase, then the new shares issued with respect to the preferred shares shall be common shares in the case of<br>paid-in capital increase and shall be the shares of same type in the case of non-paid-in capital increase (established on<br>March 21, 1997).
---	---
(7)	The existing period of the preferred shares shall be for ten (10) years from the date of issuance, and the<br>preferred shares shall be converted into common shares upon the expiry thereof; provided, that if the holders of the preferred shares do not receive the dividends entitled to them before the expiry date, then the existing period shall be extended<br>until such holders (established on March 21, 1997).
---	---

Article 9. No Issuance of Shares Certificates (deleted on March 26,2019)

Article 9-2. Electronic Registration of Rights Indicated in Shares and Subscription RightsCertificates

Instead of issuing the share certificates and subscription right certificates, the Company electronically registers in the electronic register of the electronic registry the rights that shall be indicated in the shares and subscription right certificates (newly established on March 26, 2019).

Article10. Preemptive Right

(1)

The Company’s Shareholders shall have the preemptive right to subscribe to new shares in proportion to their respective shareholdings. However, in the case of abandonment or loss of the preemptive right of the Shareholders to subscribe for new shares, or if fractional shares remain at the time of allocation of new shares, such shares shall be disposed of by a resolution of the Board of Directors (amended on August 14, 1989).

(2)

Notwithstanding Paragraph (1) above, if the Company issues new shares by public offering or depositary receipts in accordance with the Overseas Securities Issuance Regulation, or issues new shares to increase the Company’s capital through public offerings, the decision on preemptive right and other conditions on issuance of new shares are determined by a resolution of the Board of Directors (amended on March 20, 1989).

---

Article10-2. Equal Dividend

The Company shall distribute dividends equally with respect to all shares of the same class that have been issued (including those converted into such shares) as of the record date, regardless of their issuance dates (established on March 15, 1996, amended on March 26, 2024).

Article 10-3. Stock Option

(1)	The Company may grant the Stock Options up to the limit as permitted by relevant laws and regulations to its<br>officers and employees or officers and employees of an affiliated company as defined in relevant laws and regulations (in this Article referred to as ‘Officers and Employees’) by a special resolution of the General Meeting of Shareholders.<br>Provided that, the Company may grant Officers and Employees the stock option by a resolution of the Board of Directors up to the limit as permitted by relevant laws and regulations (amended on March 8, 2002).
(2)	Officers and Employers who may be granted Stock Options shall be such person who has contributed to profit<br>maximization or technical innovation of the Company or is capable of such contribution; provided, that a person who is prohibited from being granted Stock Options by relevant laws and regulations shall be excluded from the foregoing (amended on<br>March 8, 2002).
---	---
1.	(deleted on March 8, 2002)
---	---
2.	(deleted on March 8, 2002)
---	---
3.	(deleted on March 8, 2002)
---	---
(3)	The shares to be delivered upon exercise of Stock Option shall be common shares in registered form (amended on<br>March 17, 2000).
---	---
(4)	The number of officers and employees to be granted with Stock Option shall not exceed 50% of the total number<br>of officers and employees. The Stock Option that can be granted to each person shall not exceed 1/100 of total issued and outstanding shares (amended on March 24, 2017).
---	---
(5)	(deleted on March 17, 2000).
---	---
(6)	The Stock Option may be exercised by the date set at the General Meeting of Shareholders or by the Board of<br>Directors within a period of seven (7) years commencing from the date when the relevant officer or employee is entitled to exercise such Stock Option (amended on March 16, 2001).
---	---
(7)	The Stock Option may be canceled by the resolution of Board of Directors if any of the following occurs<br>(amended on March 17, 2000):
---	---
1.	When the relevant officer or employee voluntarily retires or resign from the Company within three<br>(3) years from the date of grant of Stock Option (amended on March 17, 2000);
---	---

2.	When the relevant officer or employee causes loss to the Company due to his/her gross negligence or willful<br>misconduct (amended on March 17, 2000); or
3.	When there occur any other conditions for cancellation of Stock Option specified in the Stock Option agreement<br>(amended on March 17, 2000).
---	---

Article 10-4. Redemption of Shares

(1)	Shares may be redeemed with profits to be distributed to Shareholders by a resolution at the Board of Directors<br>in accordance with relevant laws and regulations (established on March 16, 2001).
(2)	Details of cancellation of shares with profits including the type and numbers of shares to be cancelled, total<br>acquisition amount, period and method of acquisition, etc. shall be determined by the resolution of the Board of Directors in accordance with relevant laws and regulations (established on March 16, 2001).
---	---

Article 11. Issuance at Current Market Price

(1)	All or a part of new shares to be issued by the Company may be issued at the then-current market price, in<br>which case the price of new shares shall be determined by a resolution of the Board of Directors (established on August 14, 1989).
(2)	In case of Paragraph (1), notwithstanding the provisions of Article 10, the Board of Directors may offer<br>publicly or cause a person who has subscribed for new shares to underwrite new shares to be issued at the then-current market price in accordance with the relevant provisions of the Capital Market and Financial Investment Business Act (amended on<br>March 23, 2012).
---	---

Article 12. Transfer Agent

(1)	The company shall designate a transfer agent (amended on August 14, 1989).
(2)	The transfer agent, the location where its services are to be rendered and the scope of its duties shall be<br>determined by the Board of Directors of the Company and shall be publicly announced (amended on August 14, 1989).
---	---
(3)	The Company shall keep the Register of Shareholders, or a duplicate thereof, at the location where the transfer<br>agent performs its duties. The transfer agent shall handle the activities of electronic registration, the management of the shareholder list, and other matters related to the stock (amended on March 26, 2019).
---	---
(4)	The procedures for the activities referred to in Paragraph (3) above will comply with the relevant<br>regulations on the Transfer Agent (amended March 23, 2012).
---	---

Article 13. Report of Name, Address and Seal or Signature ofShareholders, etc. (deleted on March 26, 2019)

Article 14. Record Date

(1)	(deleted on March 26, 2020)
(2)	The Company shall cause the Shareholders whose names appear in the Register of Shareholders on the last day of<br>each fiscal year to exercise the rights as Shareholders at the Ordinary General Meeting of Shareholders (amended on March 16, 2001).
---	---
(3)	If necessary for convening of an Extraordinary General Meeting of Shareholders or any other cause, the Company<br>may set a record date upon at least two week prior public notice (amended on March 26, 2020).
---	---

CHAPTER 3. BONDS

Article 15. Issuance of Convertible Bonds

(1)	The Company may issue convertible bonds to persons other than the Shareholders of the Company to the extent<br>that the aggregate par value of the bonds shall not exceed Four Hundred Billion (400,000,000,000) Won (amended on March 15, 1996).
(2)	The convertible bonds referred to in Paragraph (1) may be issued with conversion rights to a part of the<br>bonds by a resolution of the Board of Directors.
---	---
(3)	Upon conversion, from the aggregate par value of convertible bonds, common shares may be issued up to Three<br>Hundred Billion (300,000,000,000) Won and preferred shares may be issued up to One Hundred Billion (100,000,000,000) Won, and the conversion price, which shall not be less than the par value of each share, shall be determined by a resolution of the<br>Board of Directors at the time of issuance of the convertible bonds (amended on March 15, 1996).
---	---
(4)	The period during which conversion rights may be exercised shall commence on one (1) month after the<br>issuance date of the relevant convertible bonds and end on the date immediately preceding the redemption date thereof. However, the Board of Directors may adjust the conversion right period within the above period by a resolution.<br>
---	---
(5)	With respect to the shares issued upon conversion of the convertible bonds described in Paragraph (1), the<br>Company shall pay interest only on the amount that has become due and payable before the conversion (amended on March 15, 1996, amended on March 26, 2024).
---	---

Article 16. Issuance of Bonds with Warrants

(1)	The Company may issue bonds with warrants to persons other than the Shareholders of the Company to the extent<br>that the aggregate par value of the bonds shall not exceed Four Hundred Billion (400,000,000,000) Won (amended on March 15, 1996).
(2)	The aggregate value of new shares which may be subscribed for by the holders of the bonds with warrants shall<br>be determined by the Board of Directors, provided that the amount of such new shares shall not exceed the aggregate par value of the bonds with warrants.
---	---
(3)	Upon exercising preemptive rights, from the aggregate par amount of bonds with warrants, common shares may be<br>issued up to Three Hundred Billion (300,000,000,000) Won and preferred shares may be issued up to One Hundred Billion (100,000,000,000) Won, and the issue price, which shall not be less than the par value of each share, shall be determined by a<br>resolution of the Board of Directors at the time of issuance of the bonds with warrants (amended on March 15, 1996).
---	---
(4)	The period during which preemptive rights may be exercised shall commence on one (1) month after the<br>issuance date of the relevant bonds with warrants and end on the date immediately preceding the redemption date thereof. However, the Board of Directors may adjust the exercise period within the above period by a resolution.
---	---
(5)	(deleted on March 26, 2024).
---	---

Article 17. Applicable Provisions regarding Issuance of Bonds

The provisions of Articles 12 shall apply mutatis mutandis to the issuance of bonds (amended on March 26, 2019).

Article 17-2. Issuance of Bonds

(1)	The Company may issue bonds in accordance with a resolution of the Board of Directors (established on<br>March 23, 2012).

(2)	Subject to the determination by the Board of Directors of the amount and classes of bonds, the Board of<br>Directors may authorize the Representative Director to issue bonds within a period not exceeding one (1) year from the date of such determination (established on March 23, 2012).

Article 17-3. Electronic Registration of Rights Indicated in Bonds and Subscription Warrants

Instead of issuing the bond certificates and subscription warrants, the Company electronically registers in the electronic register of the electronic registry the rights that shall be indicated in the bonds and subscription warrants; provided that the Company is not required to electronically register the rights to be indicated on bonds if electronic register of such rights are not mandatory under relevant laws and regulations (newly established on March 26, 2019, amended on March 25, 2021).

CHAPTER 4. GENERAL MEETING OFSHAREHOLDERS

Article 18. Types of General Meeting

(1)	General Meetings of the Shareholders of the Company shall be of two types: Ordinary and Extraordinary.<br>
(2)	The Ordinary General Meeting of Shareholders shall be convened within three (3) months after the end of<br>each fiscal year and Extraordinary General Meetings of Shareholders shall be convened at any time if necessary (amended on July 7, 1994).
---	---

Article 19. Convening of General Meeting

(1)	Except as otherwise provided by the relevant laws and regulations, General Meetings of Shareholders shall be<br>convened by the Representative Director in accordance with a resolution of the Board of Directors (amended on August 14, 1989).
(2)	In the absence of the Representative Director, the provision of Article 35, Paragraph (2) shall apply<br>mutatis mutandis (amended on August 14, 1989).
---	---

Article 20. Notice and Public Notice of Convening of General Meeting

(1)

In convening a General Meeting of Shareholders, a written or digital notice thereof setting forth the time, date, place and agenda of the Meeting, shall be sent to each Shareholder at least two (2) weeks prior to the date of the Meeting (amended on March 8, 2002).

(2)

The written or digital notice of convening General Meeting of Shareholders to Shareholders holding not more than one (1) percent of the total number of shares with voting rights issued and outstanding shall be replaced by public notices given respectively at least twice in “Hankuk Kyungje Shinmoon” and “Maeil Kyungje Shinmoon” published in Seoul, two (2) weeks prior to the Meeting, or by public notices via electronic means as prescribed by the relevant laws and regulations. Public notice of a Meeting shall include the statement that a General Meeting will be held and the agenda of the Meeting (amended on March 22, 2013).

---

Article 21. Place of General Meeting

General Meetings of Shareholders shall be held at the place where the head office of the Company is located but may be held at a near-by place if necessary (amended on August 14, 1989).

Article 22. Chairman of General Meeting

The Chairman of the General Meeting of Shareholders shall be the Representative Director. In the absence of the Representative Director, the other Directors shall preside at the Meeting in the order previously determined by the Board of Directors (amended on July 7, 1994).

Article 23. Chairman of General Meeting

(1)	The chairman of a General Meeting of Shareholders may order any person who intentionally speaks or behaves<br>obstructively or who disturb the proceedings of the Meeting to stop or retract a speech or to leave the place of Meeting, and such person shall comply with his/her order (established on August 14, 1989).
(2)	The Chairman of a General Meeting of Shareholders may restrict time and number of speeches by a Shareholder as<br>deemed necessary for the purpose of smooth proceeding (established on March 27, 1998).
---	---

Article 24. voting Rights ofShareholders

Every Shareholder shall have one (1) vote per share registered by his own name.

Article 25. Limitation to Voting Rights of Cross-Held Shares

If the Company, its parent company and its subsidiary, or its subsidiary holds shares exceeding ten (10) percent of the total number of shares issued and outstanding of another company, the shares of the Company held by such other company shall not have voting rights (amended on August 14, 1989).

Article 26. Disunitary Exercise of Voting Rights

(1)	If a Shareholder who holds two (2) or more shares with voting rights wishes to exercise them in disunity,<br>such Shareholder shall notify the Company in writing of his intention and reason for disunitary voting at least three (3) days prior to the Meeting (amended on August 14, 1989).
(2)	The Company may reject an exercise of vote in disunity by a Shareholder except in the event that he/she has<br>accepted a trust of shares or he/she holds the shares on behalf of another person (amended on August 14, 1989).
---	---

Article 27.Exercise of Voting Rights by Proxy

(1)	Shareholders may exercise their voting rights by proxy.
(2)	The proxy shall be a Shareholder of the Company and must present documents evidencing his power of<br>representation prior to the opening of the General Meeting of Shareholders; provided, however, the proxy for a corporate Shareholder must be an employee of such corporation authorized by the corporation’s representative (established on<br>July 7, 1994).
---	---

Article 28. Matters for Resolution (deleted on July 7, 1994)

Article 29. Method of Resolution of General Meeting of Shareholders

All resolutions of General Meetings of Shareholders, except as otherwise provided by the relevant laws and regulations, shall be adopted by affirmative votes of the majority of the voting rights of Shareholders present thereat and at least one-fourth (1/4) of the total number of shares issued and outstanding (amended on March 15, 1996).

Article 30. Minutes of General Meeting of Shareholders

The substance of the course and proceedings of a General Meeting of Shareholders and the results thereof shall be recorded in minutes on which the names and seals of the chairman and the Directors present at the Meeting shall be affixed or which shall be signed by such persons, and shall be kept at the head office and branches of the Company (amended on March 15, 1996).

CHAPTER 5. DIRECTORS (amended on March 17, 2000)

Article 31. Number of Directors

(1)	The Company shall have a minimum of three (3) but not more than twelve (12) Directors, and more than<br>a half of Directors shall be outside Directors (amended on March 11, 2005).
(2)	(deleted on March 17, 2000).
---	---

Article 32. Appointment of Directors

(1)	The Directors shall be elected at a General Meeting of Shareholders (amended on March 17, 2000).<br>
(2)	The Directors shall be appointed at a General Meeting of Shareholders by affirmative votes of the majority of<br>the voting rights of Shareholders present and such majority also represents at least one-fourth (1/4) of the total number of shares issued and outstanding (amended on March 17, 2000).<br>
---	---
(3)	For appointment of Directors, the cumulative voting system pursuant to Article<br>382-2 of the Commercial Act shall not be applied (established on March 20, 1999).
---	---
(4)	(deleted on July 7, 1994).
---	---
(5)	The Directors shall consist of standing Director(s), non-standing<br>Director(s) and outside Director(s) who do(es) not participate in general operation of the Company (established on March 27, 1998).
---	---
(6)	(deleted on March 17, 2000).
---	---

Article 32-2. Committee for Recommendation of Outside Director

(1)	The Company shall have the committee for recommendation of Outside Director (the “Recommendation<br>Committee”) at the Board of Directors (established on March 17, 2000).
(2)	An outside Director shall be appointed from among those candidates who were recommended by the Recommendation<br>Committee (established on March 17, 2000).
---	---
(3)	The Recommendation Committee shall consist of two (2) or more Directors and a half or more of such<br>Directors shall be composed of outside Directors already appointed (established on March 17, 2000).
---	---
(4)	All matters necessary for the constitution and operation of the Recommendation Committee shall be decided<br>separately by the Board of Directors (established on March 17, 2000).
---	---

Article 32-3.Qualification of Director

(1)	A person who falls under any of the following items shall not be a Director of the Company, and a Director who<br>falls under any of the following items after his/her appointment shall be dismissed (amended on March 17, 2000):
1.	Person who controls a company having competitive relationship with the Company, as specified in the Monopoly<br>Regulation and Fair Trade Law (hereinafter, the “FTL”) or any person relating to such a person (amended on March 17, 2000);
---	---
2.	Person who is, or has been within last two (2) years, an officer or an employee of a company having<br>competitive relationship with the Company, or a company which belongs to the same enterprise group as such competitor under the FTL (amended on March 17, 2000); or
---	---
3.	Person who is, or has been within last two (2) years, an officer or an employee of a corporation which is<br>the largest Shareholder or the 2nd largest Shareholder of a company having competitive relationship with the Company, or a company which belongs to the same enterprise group as such corporation under the FTL (amended on March 17, 2000).<br>
---	---

(2)

The outside Director of the Company shall be such person who has expert knowledge in management, economy, accounting, law or relevant technology, or substantial experience in such areas, and who may contribute to the development of the Company and protection of interests of the Shareholders. A person who falls under any of causes for disqualification as specified in the Commercial Act or other relevant laws and regulations, shall not become an outside Director of the Company (amended on March 23, 2012).

(3)

If an outside Director who falls under any of causes for disqualification in any of items specified in Paragraph (1) above or in the Paragraph (2) above, he/she shall be dismissed from his/her office when there occurs any of such causes. In such case, any vacancy in the office of the outside Director shall be filled at the Ordinary General Meeting of Shareholders following the occurrence of such causes for disqualification (amended on March 17, 2000).

---

Article 33.Term of office of Directors

(1)	The term of office of the Directors (including Representative Director) shall be until the close of the 3rd<br>Ordinary General Meeting of Shareholders convened after he/she office (amended on March 16, 2001, amended on March 25, 2021).
(2)	The total term of outside Directors shall not exceed 6 years, and, when including the service at affiliates, 9<br>years (newly established on March 25, 2021).
---	---

Article 34. Appointment of Directors in case of Vacancy

(1)	If a Director falls under one of the following items, his/her position is deemed to be vacant (amended on<br>March 17, 2000, amended on March 25, 2021):
1.	When dead;
---	---
2.	When adjudicated insolvent;
---	---
3.	When adjudicate on the commencement of adult guardianship or limited guardianship; or
---	---
4.	When sentenced to a punishment heavier than imprisonment without prison labor.
---	---
(2)	Any vacancy in the office of Director shall be filled by a resolution of an Extraordinary General Meeting of<br>Shareholders. However, if the number of Directors required by these Articles of Incorporation or applicable laws are met and there is no difficulty in the administration of business, a appointment may be withheld temporarily or postponed until the<br>next following Ordinary General Meeting of Shareholders (amended on March 17, 2000).
---	---
(3)	The terms of office of a Director appointed to fill a vacancy or increase the number of Directors shall<br>commence on the date of taking office (amended on March 17, 2000).
---	---

Article 35. Duties of Directors

(1)	The Company shall appoint more than one (1) representative Directors among Directors by a resolution of<br>the Board of Directors. The Representative Director shall represent the Company and manage all affairs of the Company (amended July 7, 1994).
(2)	The Directors shall assist the Representative Director and shall carry out their respective responsibilities as<br>determined by the Board of Directors. In the absence of the Representative Director, they shall perform his duty in the order determined by the provisions of the Board of Directors (amended July 7, 1994).
---	---

Article 35-2. Reporting Duty of Directors

A Director shall immediately report to the Audit Committee when such a Director finds matters which could materially cause damage to the Company (amended on March 17, 2000).

Article 35-3. Duties of Directors to be faithful

The Directors shall faithfully perform their respective duties for the benefits of the Company (amended on March 17, 2000).

Article 36. Duties of Auditors (deleted on March 17, 2000)

Article 37. Auditors’ Records (deleted on March 17, 2000)

Article 38. Disqualification of Directors and Auditors (deleted on July 7, 1994)

Article 39. Assurance of Employee’s Employment

The Company shall assure its employees’ employment with the Company except for discharge or removal pursuant to the Company’s Rules of Employment (amended on July 7, 1994).

Article 40. Restriction on the Representation Right of the Representative Director (deleted on July 7, 1994)

Article 41. Agent

Representative Director may appoint agents among employees of the Company to be delegated rights with respect to the Company’s business, including any litigation involving the Company except otherwise prohibited by any laws or regulation, or the Articles of Incorporation (amended on July 7, 1994).

Article 42. Consultant

Representative Director may have consultants or advisory institutions to refer important matters on business administration (amended on July 7, 1994).

CHAPTER 6. BOARD OF DIRECTORS

Article 43. Constitution of the Board of Directors

The Board of Directors of the Company shall consist of Directors. The Board of Directors shall resolve all important matters relating to the execution of business (amended on July 7, 1994).

Article 44. Convening of the Board of Directors’ Meeting

(1)	Meetings of the Board of Directors shall be convened by the Representative Director as he deems necessary or<br>upon the request of more than three (3) Directors (amended on July 7, 1994).
(2)	A Director who does not have the right to convene the Meeting of Board of Directors may demand to convene the<br>Meeting of Board of Directors to a Director with a right to convene the Meeting. If a Director with such a right rejects to the demand without reasonable cause, other Director may convene the Meeting of Board of Directors (established on<br>March 8, 2002).
---	---
(3)	In convening a Meeting of the Board of Directors, a notice thereof setting forth agenda of the Meeting shall be<br>given to each Director at least seven (7) days prior to the date of the Meeting; provided that in the cases of urgent matters, notice can be given until the day prior to the date of the Meeting (amended on March 8, 2002, amended on<br>March 26, 2024).
---	---
(4)	The procedure of Paragraph (3) may be dispensed with upon the consent of all Directors (amended on<br>March 8, 2002).
---	---

Article 45. Resolutions of the Board of Directors

(1)	Resolutions of the Board of Directors shall be adopted by the presence of a majority of the Directors in office<br>and by the affirmative vote of a majority of the Directors present.
(2)	No Director who has an interest in a matter for resolution may exercise his or her vote upon such matter.<br>
---	---

Article 45-2. Matters Subject to Prior Approval of Majority of the Outside Directors

Notwithstanding the provisions to the contrary in the Articles of Incorporation, the Company shall obtain approval from the majority of the outside Directors in order to effect the following acts (established on March 27, 1998).

(1)	Acquisition by the Company of, or causing its subsidiary to acquire, such stock or equity of a foreign company<br>or corporation or other overseas assets, equivalent to 5% or more of its capital under the most recent balance sheet; or
(2)	Contribution of capital to, providing loan or guarantee to, acquisition of assets of, or any similar<br>transaction with, the affiliated companies of the Company (as defined in the FTL) equivalent to 10 billion Won or more through single or more transactions.
---	---

Article 45-3. Approval of the Board of Directors with regard to the Plan of Safety and Health, etc.

(1)	The Representative Director of the Company shall establish a safety and health plan of the Company in<br>accordance with the relevant laws and regulation, including the Occupational Safety and Health Act (established on March 26, 2020).
(2)	The Company shall report to and obtain approval from the Board of Directors for the safety and health plan<br>under paragraph (1) (established on March 26, 2020).
---	---

Article 46. Function (deleted on July 7, 1994)

Article 46-2. Internal Trading

The Board of Directors shall establish and amend the regulations for internal trading in order to insure the fairness of transactions with affiliated companies (as defined in the FTL) of the Company (established on March 27, 1998).

Article 47. Management

Matters necessary for management of the Board of Directors shall be determined by the provisions of the Board of Directors.

Article 47-2. Auditors’ Council (deleted on March 17, 2000)

Article 47-3. Audit Committee (established on March 17, 2000)

(1)	The Company shall have the Audit Committee in the Board of Directors (established on March 17, 2000).<br>
(2)	The Audit Committee shall consist of three (3) or more directors and<br>two-thirds (2/3) or more of the committee members shall be composed of outside Directors (established on March 17, 2000).
---	---
(3)	The committee members shall be appointed at a General Meeting of Shareholders and all matters necessary for the<br>operation of the Audit Committee shall be decided separately at the Board of Directors (amended on March 23, 2012).
---	---

Article 48. Minutes of the Meeting of the Board of Directors

All agenda of the Board of Directors, the substance of the proceedings of the Board and the result thereof, name(s) of Director(s) who raise(s) an objection to the Board resolution and the reason therefor, shall be recorded in the minutes on which the names and seals of the Chairman and all Directors present shall be affixed or which shall be signed by such persons,

and shall be kept at the head office (amended on March 17, 2000).

Article 49. Remuneration and Severance Allowance of Directors

(1)	Remuneration for the Directors shall be determined by a resolution of the General Meeting of Shareholders<br>(amended on March 17, 2000).
(2)	Severance allowances for Directors shall be handled in accordance with the Regulation on Remuneration for<br>Officers as adopted by a resolution of the General Meeting of Shareholders (amended on March 17, 2000).
---	---

Article 49-2. Treatment for Outside Directors

The Company may pay to outside Directors the expense incurred during the performance of their duties (amended on March 17, 2000).

CHAPTER 7. ACCOUNTING

Article 50. Fiscal Year

The fiscal year of the Company shall commence on January 1 and end on December 31 of each year (amended on August 14, 1988).

Article 51. Safe (deleted on July 7,1994)

Article 52. Preparation and Preservation of Financial Statements and Business Report

(1)	The Representative Director of the Company shall prepare the following documents, supplementary documents<br>thereto and the business report for obtaining the audit of the Audit Committee six (6) weeks prior to the day set for the Ordinary General Meeting of Shareholders, for audit by the Audit Committee, and the Representative Director shall submit<br>the following documents and the business report to the Ordinary General Meeting of Shareholders (amended on March 17, 2000).
1.	Balance sheet;
---	---
2.	Profit and loss statement; and
---	---
3.	Any other documents indicating the financial status and management results of the Company as defined in the<br>Presidential Decree to implement the Commercial Act (amended on March 23, 2012).
---	---
(2)	A consolidated financial statement shall be included in the documents as specified in Paragraph (1) above<br>if the Company falls within the scope of the company which is required to prepare the consolidated financial statement as defined in the Presidential Decree to implement the Commercial Act (established on March 23, 2012).
---	---
(3)	The Audit Committee shall submit the audit report on the documents described in Paragraph (1) above to the<br>Representative Director within four (4) weeks from the day of receipt thereof (amended on March 23, 2012).
---	---

(4)

The Representative Director shall keep the documents described in Items of Paragraph (1) above, together with the business report, and the audit report at the head office of the Company for five (5) years and certified copies of all of such documents at the branches of the Company for three (3) years beginning from one (1) week prior to the day of the Ordinary General Meeting of Shareholders (amended on March 23, 2012).

(5)

The Representative Director shall give public notice of the balance sheet and the independent auditors’ opinion immediately after the documents described in Items of Paragraph (1) above have been approved by the General Meeting of Shareholders (amended on March 23, 2012).

---

Article 53. Disposition of Surplus

The Company shall dispose of the earned surplus which is unappropriated as of the end of each fiscal year according to the following method (amended on March 21, 1997).

(1)	Earned surplus Reserves (required to be more than one-tenth of cash<br>dividends paid for the pertinent fiscal year);
(2)	Other Statutory reserves;
---	---
(3)	Dividends;
---	---
(4)	Discretionary reserves;
---	---
(5)	Bonus for officers;
---	---
(6)	Other appropriation of retained earnings; and
---	---
(7)	Earned surplus carried forward to next fiscal year.
---	---

Article 54. Dividends

(1)	Dividends may be paid in cash or shares (amended on July 7, 1994).
(2)	In the case of stock dividends, the classes and types of new shares to be allotted may be determined by<br>resolution of the General Meetings of Shareholders if the Company has issued different classes and types of shares (established on March 15, 1996).
---	---
(3)	The Company may set the record date for the Shareholders or pledgees who are entitled to dividends under<br>Paragraph (1) by a resolution of the Board of Directors, and once a record date has been set, it must be announced two (2) weeks prior to the record date (established on August 14, 1989, amended on March 26, 2024).<br>
---	---
(4)	If there is no claim for the payment of dividends for five (5) years from the date when the allotment<br>starts, the right to claim dividends in Paragraph (1) shall be deemed to be waived and the dividend shall be deemed to be the earning of the Company (amended on August 14, 1989).
---	---

Article 54-2. Interim Dividends (deleted on March 25, 2021)

Article 54-3. Quarterly Dividends

(1)	Dividends of profits may be paid by the Company in cash on the last day of the third, sixth, and ninth month<br>from the beginning of each fiscal year (the “record date for quarterly dividend”) by a resolution of Board of Directors (established on March 25, 2021).
(2)	Quarterly dividends under Paragraphs (1) shall be paid to the shareholders entered in and the pledgees<br>registered with the Register of Shareholders as of the record date for quarterly dividend (established on March 25, 2021).
---	---

(3)	All other matters relevant to the quarterly dividends to be paid under Paragraph (1), including the limitation<br>on amount and the time of payment, shall comply with relevant laws and regulations, including Financial Investment Services and Capital Markets Act (established on March 25, 2021).
(4)	The provisions of Article 54 Paragraph (4) shall apply mutatis mutandis to this Article (established on<br>March 25, 2021).
---	---

CHAPTER 8. SUPPLEMENTARY PROVISIONS

Article 55. Duty of Keeping Secret

(1)	The employees, or the former employees of the Company shall not disclose or embezzle secrets which are obtained<br>on his duty (amended on March 27, 1998).
(2)	If any officer or any person who was the officer of the Company discloses or misappropriates the information<br>concerning the management of the Company, he/she shall be liable for the loss incurred to the Company (established on March 27, 1998).
---	---

Addendum No. 5(as of August 14, 1989)

Article 1. Date of Enforcement

These Articles of Incorporation shall take effect as of August 14, 1989.

Article 2. Provisions of the Company

The provisions needed for the undertaking and management of the Company’s business shall be determined and enforced by the Board of Directors.

Article 3. Matters Not Specified in These Articles of Incorporation

Matters not specified in these Articles of Incorporation shall comply with resolutions of the General Meeting of Shareholders, the Commercial Act and other laws or regulations.

Addendum No. 6 (as of March 15, 1991)

These Articles of Incorporation shall take effect as of March 15, 1991.

Addendum No. 7 (as of March 20, 1992)

These Articles of Incorporation shall take effect as of March 20, 1992.

Addendum No. 8 (as of July 7, 1994)

These Articles of Incorporation shall take effect as of July 7, 1994.

Addendum No. 9 (as of March 15, 1996)

Article 1. Date of Enforcement

These Articles of Incorporation shall take effect as of March 15, 1996. However, the amended Articles of 10-2, 13, 17, 29,30, 32, 33, 35-2, 36, 37, 48 and 54 shall take effect as of October 1, 1996.

Article 2. Interim Measures for Terms of Office of Auditors

The terms of office of auditors who are holding office of the Company when these Articles of Incorporation become effective, shall be determined by the previous Articles of Incorporation of the Company.

Addendum No. 10 (as of March 21, 1997)

Article 1. Date of Enforcement

These Articles of Incorporation shall take effect as of March 21, 1997.

Addendum No. 11 (as of March 27, 1998)

Article 1. Effective Date

These Articles of Incorporation shall become effective from March 27, 1998.

Article 2. Interim Measures for appointing outside Director

Notwithstanding the amended provision of Article 31 Paragraph (1), the Company may appoint at most three (3) outside Director(s).

Addendum No. 12 (as of March 20, 1999)

Article 1. Effective Date

These Articles of Incorporation shall become effective from March 20, 1999.

Article 2. Issuance of New Shares

The Company shall issue 160,210 common shares by June 17, 1999.

Article 3. Manner to Issue New Shares

At the time of issuance of new shares under Article 2 of the Addendum, the Company shall, notwithstanding the provision of Article 10, paragraph (1) of the text, allocate all of such new shares to the stockholders, except foreigners who are restricted from the acquisition of securities beyond a certain limit according to Article 6, Item 3 of the Telecommunication Business Act, in proportion to stocks which the stockholder owns. Provided, however that the issue price and manner of subscription shall be determined by resolution of the Board of Directors.

Article 4. Transient Provision

The provision of Article 32, paragraph (3) of the text shall be effective to the date immediately preceding the date set for the Ordinary General Meeting of Shareholders in 2003 (amended on March 17, 2000).

Addendum No. 13 (as of March 17, 2000)

Article 1. Date of Effectiveness

These Articles of Incorporation shall take effect as of March 17, 2000. However, the amended Article 31 shall take effect from the date of convening the Ordinary General Meeting of Shareholders following the close of the 2000 business year.

Article 2. Allocation of New Shares to a Third Party

Notwithstanding the provisions of Article 10, Paragraph (1) of the text, the Company may allocate 579,492 new shares (on the basis of 5,000 Won as par value of a share) to Pohang Iron & Steel Co., Ltd., once or more within year 2000 by a resolution of the Board of Directors in the manner of the issuance of new shares to a third party.

Addendum No. 14 (as of March 16, 2001)

Article 1. Date of Effectiveness

These Articles of Incorporation shall take effect as of March 16, 2001.

Article 2. Transient Provision

Article 33 shall also be applied to the Directors who have been elected prior to the effective date of these Articles of Incorporation.

Addendum No. 15 (as of March 12, 2004)

Article 1. Date of Effectiveness

These Articles of Incorporation shall take effect as of March 12, 2004.

Addendum No. 16 (as of March 11, 2005)

Article 1. Date of Effectiveness

These Articles of Incorporation shall take effect as of March 11, 2005.

Addendum No. 17 (as of March 10, 2006)

Article 1. Date of Effectiveness

These Articles of Incorporation shall take effect as of March 10, 2006.

Addendum No. 18 (as of March 14, 2008)

Article 1. Date of Effectiveness

These Articles of Incorporation shall take effect as of March 14, 2008.

Addendum No. 19 (as of March 12, 2010)

Article 1. Date of Effectiveness

These Articles of Incorporation shall take effect as of March 12, 2010.

Addendum No. 20 (as of August 31, 2011)

Article 1. Date of Effectiveness

These Articles of Incorporation shall take effect as of October 1, 2011.

Addendum No. 21 (as of March 23, 2012)

Article 1. Date of Effectiveness

These Articles of Incorporation shall take effect as of March 23, 2012. However, the amended provisions of Article 17-2 and Article 52, Paragraph (1), Item 3 and Paragraph (2) shall take effect as of April 15, 2012.

Addendum No. 22 (as of March 22, 2013)

Article 1. Date of Effectiveness

These Articles of Incorporation shall take effect as of March 22, 2013.

Addendum No. 23 (as of March 21, 2014)

Article 1. Date of Effectiveness

These Articles of Incorporation shall take effect as of March 21, 2014.

Addendum No. 24 (as of March 20, 2015)

Article 1. Date of Effectiveness

These Articles of Incorporation shall take effect as of March 20, 2015.

Addendum No. 25 (as of March 18, 2016)

Article 1. Date of Effectiveness

These Articles of Incorporation shall take effect as of March 18, 2016.

Addendum No. 26 (as of March 24, 2017)

Article 1. Date of Effectiveness

These Articles of Incorporation shall take effect as of March 24, 2017.

Addendum No. 27 (as of March 26, 2019)

Article 1. Date of Effectiveness

These Articles of Incorporation shall take effect as of March 26, 2019. However, the amended provisions of Articles 7, 9, 9-2, 12, 13, 17, 17-3 (except those translated to Korean) shall take effect as of the effective date of the ^ LOGO ^Act on Electronic Registration of Stocks, Bonds, Etc.

LOGO .

Addendum No. 28 (as of March 26, 2020)

Article 1. Date of Effectiveness

These Articles of Incorporation shall take effect as of March 26, 2020. However, Article 45-3 shall take effect as of January 1, 2021.

Addendum No. 29 (as of March 25, 2021)

Article 1. Date of Effectiveness

These Articles of Incorporation shall take effect as of March 25, 2021.

Addendum No. 30 (as of October 12, 2021)

Article 1. Date of Effectiveness

These Articles of Incorporation shall take effect as of October 28, 2021.

Addendum No. 31 (as of October 12, 2021)

Article 1. Date of Effectiveness

These Articles of Incorporation shall take effect as of November 2, 2021.

Addendum No. 32 (as of March 25, 2022)

Article 1. Date of Effectiveness

These Articles of Incorporation shall take effect as of March 25, 2022.

Addendum No. 33 (as of March 26, 2024)

Article 1. Date of Effectiveness

These Articles of Incorporation shall take effect as of March 26, 2024. However, the amended provisions of Article 54 (Dividends) shall take effect from the dividend distribution for the fiscal year ending in 2024 (41st fiscal period).

EX-8.1

Exhibit 8.1

List of Subsidiaries of SK Telecom Co., Ltd.

(As of December 31, 2023)

Subsidiary Name	Jurisdiction of Incorporation
Atlas Investment	Cayman Islands
Global AI Platform Corporation	USA
Global AI Platform Corporation Korea	Korea
Happy Hanool Co., Ltd.	Korea
Home & Service Co., Ltd.	Korea
Media S Co., Ld.	Korea
PanAsia Semiconductor Materials LLC	Korea
PS&Marketing Corporation	Korea
Quantum Innovation Fund I	Korea
SAPEON Inc.	Korea
SAPEON Korea Inc.	Korea
SERVICE ACE Co., Ltd.	Korea
SERVICE TOP Co., Ltd.	Korea
SK Broadband Co., Ltd.	Korea
SK Communications Co., Ltd.	Korea
SK Global Healthcare Business Group Ltd.	Hong Kong
SK m&service Co., Ltd.	Korea
SK O&S Co., Ltd.	Korea
SK stoa Co., Ltd.	Korea
SK Telecom Americas, Inc.	USA
SK Telecom China Fund I L.P.	Cayman Islands
SK Telecom China Holdings Co., Ltd.	China
SK Telecom Innovation Fund, L.P.	USA
SK Telink Co., Ltd.	Korea
YTK Investment Ltd.	Cayman Islands

EX-12.1

Exhibit 12.1

CERTIFICATION

Pursuantto Section 302 of the Sarbanes-Oxley Act 2002

I, Young Sang Ryu, certify that:

1.	I have reviewed this annual report on Form 20-F of SK Telecom Co.,<br>Ltd.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a<br>material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
---	---
3.	Based on my knowledge, the financial statements, and other financial information included in this report,<br>fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
---	---
4.	The company’s other certifying officer and I are responsible for establishing and maintaining disclosure<br>controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
---	---
(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be<br>designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being<br>prepared;
---	---
(b)	Designed such internal control over financial reporting, or caused such internal control over financial<br>reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting<br>principles;
---	---
(c)	Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this<br>report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
---	---
(d)	Disclosed in this report any change in the company’s internal control over financial reporting that<br>occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
---	---
5.	The company’s other certifying officer and I have disclosed, based on our most recent evaluation of<br>internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
---	---
(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over<br>financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
---	---
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in<br>the company’s internal control over financial reporting.
---	---

Date: April 29, 2024

/s/ Young Sang Ryu
Young Sang Ryu
President and Chief Executive Officer

EX-12.2

Exhibit 12.2

CERTIFICATION

Pursuantto Section 302 of the Sarbanes-Oxley Act of 2002

I, Yang Seob Kim, certify that:

1.	I have reviewed this annual report on Form 20-F of SK Telecom Co.,<br>Ltd.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a<br>material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
---	---
3.	Based on my knowledge, the financial statements, and other financial information included in this report,<br>fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
---	---
4.	The company’s other certifying officer and I are responsible for establishing and maintaining disclosure<br>controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
---	---
(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be<br>designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being<br>prepared;
---	---
(b)	Designed such internal control over financial reporting, or caused such internal control over financial<br>reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting<br>principles;
---	---
(c)	Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this<br>report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
---	---
(d)	Disclosed in this report any change in the company’s internal control over financial reporting that<br>occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
---	---
5.	The company’s other certifying officer and I have disclosed, based on our most recent evaluation of<br>internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
---	---
(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over<br>financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
---	---
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in<br>the company’s internal control over financial reporting.
---	---

Date: April 29, 2024

/s/ Yang Seob Kim
Yang Seob Kim
Chief Financial Officer

EX-13.1

Exhibit 13.1

Certification

Pursuantto Section 906 of the Sarbanes-Oxley Act of 2002

(Subsection (a) and (b) of Section 1350, Chapter 63 ofTitle 18, United States Code)

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsection (a) and (b) of section 1350, chapter 63 of title 18, United States Code), the undersigned officer of SK Telecom Co., Ltd., a corporation organized under the laws of the Republic of Korea (the “Company”), does hereby certify, to such officer’s knowledge, that:

The annual report on Form 20-F for the year ended December 31, 2023 (the “Form 20-F”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the Form 20-F fairly presents, in all material respects, the financial condition and results of operation of the Company.

Dated: April 29, 2024	/s/ Young Sang Ryu
	Young Sang Ryu
	President and Chief Executive Officer

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the U.S. Securities and Exchange Commission or its staff upon request.

EX-13.2

Exhibit 13.2

Certification

Pursuantto Section 906 of the Sarbanes-Oxley Act of 2002

(Subsection (a) and (b) of Section 1350, Chapter 63 ofTitle 18, United States Code)

Dated: April 29, 2024	/s/ Yang Seob Kim
	Yang Seob Kim
	Chief Financial Officer

EX-97.1

Exhibit 97.1

SK TELECOM CO., LTD.

POLICY FOR THE RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION

1. Purpose

The purpose of this Policy is to describe the circumstances in which Executive Officers will be required to repay or return Erroneously Awarded Compensation to the Company in accordance with the Clawback Rules.

2. Administration

Except as specifically set forth herein, this Policy shall be administered by the Administrator. Any determinations made by the Administrator shall be final and binding on all affected individuals and need not be uniform with respect to each individual covered by this Policy. Subject to any limitation under applicable law, the Administrator may authorize and empower any officer or employee of the Company to take any and all actions necessary or appropriate to carry out the purpose and intent of this Policy. (other than with respect to any recovery under this Policy involving such officer or employee)

3. Definitions

For purposes of this Policy, the following capitalized terms shall have the meanings set forth below.

(a) “Accounting Restatement” shall mean an accounting restatement: (i) due to the material noncompliance of the Company with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements (a “Big R” restatement); or (ii) that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period (a “little r” restatement).

(b) “Administrator” shall mean the Committee or any other committee designated by the Board to administer the Policy, and in the absence of such designation, the Board.

(d) “Clawback Eligible Incentive Compensation” shall mean, with respect to each individual who served as an Executive Officer at any time during the applicable performance period for any Incentive-based Compensation (whether or not such individual is serving as an Executive Officer at the time the Erroneously Awarded Compensation is required to be repaid to the Company), all Incentive-based Compensation Received by such individual: (i) on or after the Effective Date; (ii) after beginning service as an Executive Officer; (iii) while the Company has a class of securities listed on the Listing Exchange; and (iv) during the applicable Clawback Period.

(e) “Clawback Period” shall mean, with respect to any Accounting Restatement, the three completed fiscal years of the Company immediately preceding the Restatement Date and any transition period (that results from a change in the Company’s fiscal year) of less than nine months within or immediately following those three completed fiscal years. However, a transition period between the last day of the Company’s previous fiscal year end and the first day of its new fiscal year that comprises a period of nine to twelve months would be deemed a completed fiscal year.

(f) “Clawback Rules” shall mean Section 10D of the Exchange Act and any applicable rules or standards adopted by the SEC thereunder (including Rule 10D-1 under the Exchange Act) or the Listing Exchange pursuant

to Rule 10D-1 under the Exchange Act (including Section 303A.14 of the New York Stock Exchange Listed Company Manual), in each case as may be in effect from time to time.

(g) “Committee” shall mean the Compensation Committee of the Board.

(h) “Company” shall mean SK Telecom Co., Ltd. (and as the Administrator determines is applicable, together with each of its direct and indirect subsidiaries).

(i) “Effective Date” shall mean October 2, 2023.

(j) “Erroneously Awarded Compensation” shall mean, with respect to each Executive Officer in connection with an Accounting Restatement, the amount of Clawback Eligible Incentive Compensation that exceeds the amount of Clawback Eligible Incentive Compensation that otherwise would have been Received had it been determined based on the restated amounts, computed without regard to any taxes paid.

(k) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

(l) “Executive Officer” shall mean any individual who is or was an executive officer as determined by the Administrator in accordance with the definition of “executive officer” as set forth in the Clawback Rules and any other senior executive, employee or other personnel of the Company who may from time to time be deemed subject to the Policy by the Administrator. For the avoidance of doubt, the Administrator shall have full discretion to determine which individuals in the Company shall be considered an “Executive Officer” for purposes of this Policy.

(m) “Financial Reporting Measures” shall mean measures that are determined and presented in accordance with the accounting principles used in preparing the Company’s financial statements, and any measures that are derived wholly or in part from such measures. Stock price and total shareholder return shall for purposes of this Policy be considered Financial Reporting Measures. For the avoidance of doubt, a Financial Reporting Measure need not be presented within the Company’s financial statements or included in a filing with the SEC.

(n) “Incentive-based Compensation” shall mean any compensation that is granted, earned or vested based wholly or in part upon the attainment of a Financial Reporting Measure.

(o) “Impracticable” shall mean, in accordance with the good faith determination of the Committee, or if the Committee does not consist of independent directors, a majority of the independent directors serving on the Board, that either: (i) the direct expenses paid to a third party to assist in enforcing the Policy against an Executive Officer would exceed the amount to be recovered, after the Company has made a reasonable attempt to recover the applicable Erroneously Awarded Compensation, documented such reasonable attempt(s) and provided such documentation to the Listing Exchange; (ii) recovery would violate the Republic of Korea’s law where that law was adopted prior to November 28, 2022, provided that, before concluding that it would be Impracticable to recover any amount of Erroneously Awarded Compensation based on violation of the Republic of Korea’s law, the Company has obtained an opinion of Korean counsel, acceptable to the Listing Exchange, that recovery would result in such a violation and a copy of the opinion is provided to the Listing Exchange; or (iii) recovery would likely cause an otherwise tax-qualified retirement plan, under which benefits are broadly available to employees of the Company, to fail to meet the requirements of 26 U.S.C. 401(a)(13) or 26 U.S.C. 411(a) and regulations thereunder.

(p) “Listing Exchange” shall mean the New York Stock Exchange or such other U.S. national securities exchange or national securities association on which the Company’s securities are listed.

(q) “Method of Recovery” shall include, but is not limited to: (i) requiring reimbursement of Erroneously Awarded Compensation; (ii) seeking recovery of any gain realized on the vesting, exercise, settlement, sale, transfer, or other disposition of any equity-based awards; (iii) offsetting the Erroneously Awarded Compensation from any compensation otherwise owed by the Company to the Executive Officer; (iv) cancelling outstanding vested or unvested equity awards; and/or (v) taking any other remedial and recovery action permitted by applicable law, as determined by the Administrator.

(r) “Policy” shall mean this Policy for the Recovery of Erroneously Awarded Compensation, as the same may be amended and/or restated from time to time.

(s) “Policy Adoption Date” shall mean November 23, 2023, which is the date that the Board has approved the adoption of this Policy.

(t) “Received” shall, with respect to any Incentive-based Compensation, mean deemed receipt and Incentive-based Compensation shall be deemed received in the Company’s fiscal period during which the Financial Reporting Measure specified in the Incentive-based Compensation award is attained, even if the payment or grant of the Incentive-based Compensation occurs after the end of that period. For the avoidance of doubt, Incentive-Based Compensation that is subject to both a Financial Reporting Measure vesting condition and a service-based vesting condition shall be considered received when the Financial Reporting Measure is achieved, even if the Incentive-Based Compensation continues to be subject to the service-based vesting condition.

(u) “Restatement Date” shall mean the earlier to occur of: (i) the date the Board, a committee of the Board or the officer or officers of the Company authorized to take such action if Board action is not required, concludes, or reasonably should have concluded, that the Company is required to prepare an Accounting Restatement; or (ii) the date a court, regulator or other legally authorized body directs the Company to prepare an Accounting Restatement.

(v) “SEC” shall mean the U.S. Securities and Exchange Commission.

4. Repayment of Erroneously Awarded Compensation

(a) In the event the Company is required to prepare an Accounting Restatement, the Administrator shall reasonably promptly (in accordance with the applicable Clawback Rules) determine the amount of any Erroneously Awarded Compensation for each Executive Officer in connection with such Accounting Restatement and shall reasonably promptly thereafter provide each Executive Officer with written notice, which may be in the form of an e-mail, containing the amount of Erroneously Awarded Compensation and a demand for repayment or return, as applicable.

For Clawback Eligible Incentive Compensation based on stock price or total shareholder return where the amount of Erroneously Awarded Compensation is not subject to mathematical recalculation directly from the information in the applicable Accounting Restatement, the amount shall be determined by the Administrator based on a reasonable estimate of the effect of the Accounting Restatement on the stock price or total shareholder return upon which the Clawback Eligible Incentive Compensation was Received (in which case, the Company shall maintain documentation of such determination of that reasonable estimate and provide such documentation to the Listing Exchange).

The Administrator is authorized to engage, on behalf of the Company, any third-party advisors it deems advisable in order to perform any calculations contemplated by this Policy. For the avoidance of doubt, recovery under this Policy with respect to an Executive Officer shall not require the finding of any misconduct by such Executive Officer or such Executive Officer being found responsible for the accounting error leading to an Accounting Restatement.

(b) In the event that any repayment of Erroneously Awarded Compensation is owed to the Company, the Administrator shall recover reasonably promptly the Erroneously Awarded Compensation through any Method of Recovery it deems reasonable and appropriate in its discretion based on all applicable facts and circumstances and taking into account the time value of money and the cost to shareholders of delaying recovery. For the avoidance of doubt, except to the extent permitted pursuant to the Clawback Rules, in no event may the Company accept an amount that is less than the amount of Erroneously Awarded Compensation in satisfaction of an Executive Officer’s obligations hereunder. Notwithstanding anything herein to the contrary, the Company shall not be required to take the actions contemplated in this Section 4(b) if recovery would be Impracticable. In implementing the actions contemplated in this Section 4(b), the Administrator will act in accordance with the listing standards and requirements of the Listing Exchange and with the applicable Clawback Rules.

5. Reporting and Disclosure

The Company shall file all disclosures with respect to this Policy in accordance with the requirements of U.S. federal securities laws, including any disclosure required by applicable SEC rules.

6. Indemnification Prohibition

The Company shall not be permitted to indemnify any Executive Officer against the loss of any Erroneously Awarded Compensation that is repaid, returned or recovered pursuant to the terms of this Policy and/or pursuant to the Clawback Rules, including any payment or reimbursement for the cost of third-party insurance purchased by any Executive Officer to cover any such loss under this Policy and/or pursuant to the Clawback Rules. Further, the Company shall not enter into any agreement that exempts any Incentive-based Compensation from the application of this Policy or that waives the Company’s right to recovery of any Erroneously Awarded Compensation and this Policy shall supersede any such agreement (whether entered into before, on or after the Effective Date). Any such purported indemnification (whether oral or in writing) shall be null and void.

7. Interpretation

The Administrator is authorized to interpret and construe this Policy and to make all determinations necessary, appropriate, or advisable for the administration of this Policy. It is intended that this Policy be interpreted in a manner that is consistent with the requirements of the Clawback Rules. The terms of this Policy shall also be construed and enforced in such a manner as to comply with applicable law, including the Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act, and any other law or regulation that the Administrator determines is applicable.

For the avoidance of doubt, applicable law includes the laws of the Republic of Korea. In the event any provision of this Policy is determined to be unenforceable or invalid under applicable law, such provision shall be applied to the maximum extent permitted by applicable law and shall automatically be deemed amended in a manner consistent with its objectives to the extent necessary to conform to any limitations required by applicable law.

Should there be any inconsistency or conflict between the English version of this Policy and its Korean translation, the English version shall prevail.

8. Policy Effective Date

This Policy shall be effective as of the Policy Adoption Date.

9. Amendment; Termination

The Administrator may modify or amend this Policy, in whole or in part, from time to time in its discretion and shall amend any or all of the provisions of this Policy as it deems necessary, including as and when it determines

that it is legally required by the Clawback Rules, or any federal securities law, SEC rule or Listing Exchange rule. The Administrator may terminate this Policy at any time, and this Policy shall remain in effect only so long as the Clawback Rules apply to the Company.

Notwithstanding anything in this Section 9 to the contrary, no amendment or termination of this Policy shall be effective if such amendment or termination would (after taking into account any actions taken by the Company contemporaneously with such amendment or termination) cause the Company to violate the Clawback Rules, or any federal securities law, SEC rule or Listing Exchange rule. Furthermore, unless otherwise determined by the Administrator or as otherwise amended, this Policy shall automatically be deemed amended in a manner necessary to comply with any change in the Clawback Rules.

10. Other Recoupment Rights; No Additional Payments

The Administrator intends that this Policy will be applied to the fullest extent permitted by applicable law. The Administrator may require that any employment agreement, equity award agreement, or any other agreement entered into on or after the Effective Date shall, as a condition to the grant of any benefit thereunder, require an Executive Officer to agree to abide by the terms of this Policy.

Executive Officers shall be deemed to have accepted continuing employment on terms that include compliance with the Policy, to the extent of its otherwise applicable provisions, and to be contractually bound by its enforcement provisions. Executive Officers who cease employment or service with the Company shall continue to be bound by the terms of the Policy with respect to Clawback Eligible Incentive Compensation. Any right of recoupment under this Policy is in addition to, and not in lieu of, any other remedies or rights of recoupment that may be available to the Company under applicable law, regulation or rule or pursuant to the terms of any similar policy in any employment agreement, cash-based bonus plan, equity award agreement or similar agreement and any other legal remedies available to the Company. To the extent that an Executive Officer has already reimbursed the Company for any Erroneously Awarded Compensation Received under any duplicative recovery obligations established by the Company or applicable law, it shall be appropriate for any such reimbursed amount to be credited to the amount of Erroneously Awarded Compensation that is subject to recovery under this Policy, as determined by the Administrator in its sole discretion.

Nothing in this Policy precludes the Company from implementing any additional clawback or recoupment policies with respect to Executive Officers or any other service provider of the Company. Application of this Policy does not preclude the Company from taking any other action to enforce any Executive Officer’s obligations to the Company, including termination of employment or institution of civil or criminal proceedings or any other remedies that may be available to the Company with respect to any Executive Officer.

11. Successors

This Policy shall be binding and enforceable against all Executive Officers and their beneficiaries, estates, heirs, executors, administrators or other legal representatives to the extent required by the Clawback Rules or as otherwise determined by the Administrator.

Table of Contents

Table of Contents

TABLE OF CONTENTS

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Competition may reduce our market share and harm our business, financial condition and results of operations.

Table of Contents

Table of Contents

Inability to successfully implement or adapt our network and technology to meet the continuing technological advancements affecting the wireless telecommunications industry will likely have a material adverse effect on our business, financial condition and results of operations.

Table of Contents

Implementation of new wireless technology and enhancement of existing wireless technology have required, and may continue to require, significant capital and other expenditures, which we may not recoup.

Our businesses are subject to various types of Government regulation, and any change in Government policy relating to the telecommunications industry could have an adverse effect on our business, financial condition and results of operations.

Table of Contents

Table of Contents

We are subject to additional regulations as a result of our dominant market position in the wireless telecommunications sector, which could harm our ability to compete effectively.

Occurrences of widespread infectious diseases, including any possible recurrence of COVID-19, may materially and adversely affect our business, financial condition and results of operations.

Table of Contents

In the event that a future recurrence of COVID-19 or other types of widespread infectious diseases cannot be effectively and timely contained, our business, financial condition and results of operations may be adversely affected.

Table of Contents

Due to the existing high penetration rate of wireless telecommunications services in Korea, we are unlikely to maintain our subscriber growth rate, which could adversely affect our business, financial condition and results of operations.

Table of Contents

Our business, financial condition and results of operations may be adversely affected if we fail to acquire adequate additional frequency usage rights or use our bandwidth efficiently to accommodate subscriber growth and subscriber usage.

Table of Contents

We rely on key technology professionals and senior management, and the loss of the services of any such personnel or the inability to attract and retain them may negatively affect our business.

We need to observe certain financial and other covenants under the terms of our debt instruments, the failure to comply with which would put us in default under those instruments.

We may have to make further financing arrangements to meet our capital expenditure requirements and debt payment obligations.

Table of Contents

Termination or impairment of our relationship with a small number of key suppliers for network equipment and for leased lines could adversely affect our business, financial condition and results of operations.

Table of Contents

Our business relies on technology developed by us, and our business will suffer if we are unable to protect our proprietary rights.

Malicious and abusive Internet practices could impair our services and we may be subject to significant legal and financial exposure, damage to our reputation and a loss of confidence of our customers.

Labor disputes may disrupt our operations.

Table of Contents

Concerns that radio frequency emissions may be linked to various health concerns could adversely affect our business and we could be subject to litigation relating to these health concerns.

Our ability to deliver services may be disrupted due to a systems failure, shutdown in our networks or natural disaster.

Depreciation of the value of the Won against the Dollar and other major foreign currencies may have a material adverse effect on our results of operations and the market value of our common shares and ADSs.

Table of Contents

If SK Inc. causes us to breach the foreign ownership limitations on our common shares by being deemed to be a foreign entity, we may experience a change of control.

Unfavorable financial and economic developments in Korea may have an adverse effect on us.

Table of Contents

Table of Contents

Escalations in tensions with North Korea could have an adverse effect on us and the market value of our common shares and ADSs.

Table of Contents

Korea’s legislation allowing class action suits related to securities transactions may expose us to additional litigation risk.

There are special risks involved with investing in securities of Korean companies, including the possibility of restrictions being imposed by the Government in emergency circumstances.

Table of Contents

Sales of our shares by SK Inc. and/or other large shareholders may adversely affect the market value of our common shares and ADSs.

If an investor surrenders his or her ADSs to withdraw the underlying shares, he or she may not be allowed to deposit the shares again to obtain ADSs.

An investor in our ADSs may not be able to exercise preemptive rights for additional new shares and may suffer dilution of his or her equity interest in us.

Table of Contents

Short selling of our ADSs by purchasers of securities convertible or exchangeable into our ADSs could materially adversely affect the market price of our ADSs.

A holder of our ADSs may not be able to enforce a judgment of a foreign court against us.

We are generally subject to Korean corporate governance and disclosure standards, which may differ from those in other countries.

Table of Contents

+82-2-6100-2114.

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Wireless Services

Table of Contents

Wireless Device Sales

Smartphones and Basic Phones. We offer smartphones that are enabled to utilize our digital wireless networks and run on various operating systems, such as Apple iOS and Google Android. We also offer basic phones that have the ability to access wireless Internet services.

IoT Solutions

Table of Contents

Platform Services

Other New Businesses

Table of Contents

Rate Plans

Table of Contents

Roaming Plans. “Baro Plan” is our representative international roaming plan for longer term travelers and provides fixed data transmission allowances of 3GB for Won 29,000, 6GB for Won 39,000, 12GB for Won

Table of Contents

Digital Wireless Network

Table of Contents

Network Infrastructure

Table of Contents