South Korean wireless service provider and Motley Fool Global Gains recommendation SK Telecom (NYSE:SKM) will post its second-quarter 2007 results on Thursday. We're jumping the gun, though, and previewing what's expected for the company.

What analysts say:

  • Buy, sell, or hold the line? A six pack of analysts offer opinions on SK Telecom (the ADRs that is), with the group evenly split on the buy/hold line. Three say buy shares, while three say hold on there. SK Telecom has far more opinions given in our Motley Fool CAPS system, where 139 players have ranked the company a five-star stock.
  • Revenue. Analysts estimate revenue this quarter will be $3.06 billion, up from approximately $2.9 billion a year ago.
  • Earnings. Analyst estimates call for profits of $0.62 per share this quarter.

What management says:
For any investor who harbors concerns about investing in foreign companies because of lack of transparency, check out SK Telecom. The company provides extensive corporate and market information in plain, easy-to-understand formats. This even includes monthly fact sheets with metrics showing how its wireless business is performing. With this level of detail, shareholders don't have to attempt to "read between the lines" of management statements. The only thing left is to hear what the company paid (expense-wise) to achieve these results.

What management does:
SK Telecom commands a market share hovering just above 50% in South Korea, where it competes against KT Freetel (a subsidiary of KT Corp. (NYSE:KTC)) and LG Telecom. While SK Telecom has seen subscriber additions accelerating in the last several months, average revenue per user, or ARPU, is relatively stagnant and churn is trending upward -- thanks to a largely saturated Korean market with full number portability available between all three operators. This makes subscriber growth far more subdued than in emerging markets like China, where China Mobile (NYSE:CHL) routinely signs up 4 million subscribers a month. So while SK Telecom's operating statistics don't muster much enthusiasm, they show that the operator is holding its own in a very competitive market.








Net Additions (thousands)







Monthly Churn














Source: SK Telecom (APRU for the month of June not reported).

One Fool says:
What's more meaningful when looking at SK Telecom and the Korean market, in general, is growth in the adoption of new services. To this end, the company is pushing the boundaries to offer Korean consumers innovative services such as mobile TV and controlling home appliances from their cell phones. SK Telecom is also diversifying outside of Korea and has made strategic investments with China Unicom (NYSE:CHU) in China and partnered with EarthLink (NASDAQ:ELNK) in the U.S. to form virtual operator Helio.

There are concerns that Helio isn't luring enough high-spending customers away from giants AT&T (NYSE:T) and Verizon Wireless -- a joint venture between Verizon Communications and Vodafone (NYSE:VOD) -- and may go the way of now-bankrupt Amp'd Mobile. Beyond the metrics, financials and details of how well Helio and other initiatives are progressing will determine whether investors should hang up on SK Telecom or stay on the line.

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Fool contributor Dave Mock always takes the big picture over the details. He owns no shares of companies mentioned here. Dave is the author of The Qualcomm Equation. The Fool's disclosure policy snuggles, cleans toilets, and even takes out the garbage without complaint.