SK Telecom Co., Ltd.

Good afternoon.

I am Joong-seok Oh, Head of IR Planning at SK Telecom. Today's conference call will consist of the presentation on the earnings results for Q1 of 2021

and the future management plans and strategic direction by Pung Young Yoon, CFO and Head of Corporate Center 1, and Hyung Il Ha, Head of Corporate Center 2, followed by a Q&A session.

Today, achievements and strategic plans for MNO will be provided by Pung Young Yoon, Head of Corporate Center 1,

and Hyung Il Ha, Head of Corporate Center 2, will discuss that of the new ICT businesses.

Today's conference call will provide consecutive interpretation.

and we have with us executives from relevant business divisions to help deepen your understanding. Before we begin, we want to remind you that all forward-looking statements are subject to change depending on the macroeconomic and market situations. Let me now present our CFO. Hello.

I am Yun Pung-young, CFO of SK Telecom. I would like to thank the investors and analysts who have sent us a lot of encouragement and support before the actual announcement.

Good afternoon, this is Pung Young Yoon, CFO of SK Telecom. First of all, let me express my appreciation to investors and analysts for their continued support.

On April 14th, SK Telecom announced that it was reviewing a plan for a spin-off which would result in a telecom company

and a holding company with semiconductor and new ICT assets. We plan to use the spin-off to increase shareholder value and create the most optimal structures for telecom business and new ICT businesses respectively, thereby accelerating their growth. To fulfill the purpose of the spin-off, we completed the cancellation of treasury shares worth $2.6 trillion in market value, which accounts for 10.8% of the total issued stocks.

As mentioned, the division plan is the most important part of the shareholder value.

The planned spin-off was designed to prioritize shareholder value, and we believe that we have gained a good understanding of the investors and the market. We will carry out the plan with a strong conviction and make sure that all the necessary decisions are finalized within the first half of the year.

Now, let me discuss the consolidated earnings highlights for Q1 of 2021.

Consolidated revenue for Q1 of 2021 recorded $4,780.5 billion won. All business divisions enjoyed growth year-on-year, and media and safety and care posted a double-digit growth, marking a 7.4% year-on-year increase. But the figure declined 1.2% Q1-2, Due to the base effect of higher seasonal sales in Q4, Consolidated operating income increased by 29% year-on-year and 17.4% two-on-two to post $388.8 billion won. MNO and media led the operating income improvement by achieving both revenue growth and cost efficiency. SNC and Commerce also contributed to earnings with their YOY growth in operating income.

SK Hynix 지문법 영향과 SK Wyverns 매각 이익으로 전년 동기 대비 86.9% 증가하였고 전분기 대비로는 54.2% 증가하였습니다. Net income recorded 572 billion won, posting an 86.9% growth year-on-year and a 54.2% growth Q&Q thanks to equity method income on SK Hynix and sales profit of SK Wyverns. Let me now discuss major achievements and strategic direction for each business. SK Telecom 별도 기준 1분기 M&O 매출은 전년 동기 대비 1.9%, 전분기 대비 1.4% 증가한 2조 9,807억 원을 기록하였습니다. 지난 4월 3일 논칭 만 2년을 맞은 5G 서비스는 1분기 말 기준 가입자 2조 9,807억 원을 기록하였습니다. Non-consolidated MNO revenue for Q1 increased by 1.9% year-on-year and 1.4% Q12 to post $2,980,700,000.

Celebrating the second anniversary of 5G on April 3rd, we saw the number of 5G subscribers reach 6.74 million as of the end of Q1, and record the biggest quarterly net ads, thereby leading M&O revenue growth.

M&O operating income posted 307.3 billion won, a 19% growth year-on-year and a 33.1% growth Q2 as the market stabilization trend continued. Recently, M&O has launched five new 5G credit cards. We have launched two 5G credit cards, one with lower price and enhanced benefits, and two with a diversified 5GX plan to enhance the 5G credit line-up. Based on the credit cards that can satisfy various customer needs, we will lead the popularization of 5G services.

Recently, we introduced five new 5G price plans to strengthen the 5G price options. They include three online-only on-tech plans that offer more benefits at lower prices and two additional 5GX plans at $69,001 and $79,001. We will continue to promote the transition to 5G services based on a variety of price plans that cater to diverse customer needs.

The new subscription service that M&O is promoting is expanding its revenue range by releasing subscription services in areas that are close to daily life, such as education, rental, and F&B. In the second half of the year, we plan to launch a comprehensive subscription service that can enjoy the best subscription life at a reasonable price along with a new subscription marketing platform. We are planning as a representative product that can raise expectations for subscription services in earnest and will do our best to ensure that the quality is not out of expectation.

Subscription services newly pursued by MNO Division are expanding partnerships and launching diverse subscription services for daily lives, including education, rental, and F&B. In the second half of the year, we plan to introduce an integrated subscription services based on a new subscription marketing platform where customers can enjoy optimal subscription life at reasonable prices. We're developing flagship products that will raise customers' expectations for subscription services. We will do our best to ensure high quality of these services.

Moving on to media, SK Broadband's consolidated revenue recorded $967 billion. With the T-Broad merger and IPTV subscriber growth, it rose by 17.6% year-on-year but declined by 4.1% Q-on-Q,

Thanks to revenue growth and operational process improvements, operating income increased by 98.8% year-on-year and 12.6% Q-on-Q to record 75.4 billion won. Safety and Care 사업은 ADT CAPS와 SKINFOSAC 합병 법인 출범을 맞아 기존 보안사업에서 Safety and Care 사업으로 명칭을 변경하고 사업위원을 확장하고자 합니다.

The net profit was recorded at 3,505 billion won according to the ADT-CAS connection standard. As the high growth rate continued in new businesses such as home security and cloud security, the net profit increased by 20.3% compared to the previous year, and the net profit increased by 5.5% due to the characteristics of the safety and care business, which is the peak of the fourth quarter. The new business not only improved its net profit but also its profitability, so the net profit of this quarter is 9.4% compared to the previous year.

As for safety and care business, with the merger of ADT Cabs and SK InfoSec, we changed the name of the division from Security Division to Safety and Care Division to expand the scope of business. After the merger, the consolidated revenue, including ADT Cabs, recorded $350.5 billion won. It increased by 20.3% year-on-year, Thank you for joining us. and 14.9% Q&Q increase.

The sales of the commerce business recorded 2,037 billion won. It increased by 7% compared to the previous year due to the trend of increasing non-demand consumption, and decreased by 9.3% due to factors such as the focus on quarter promotion such as the 11th event compared to the previous quarter. 11번가와 SK스토어 모두 1분기 마케팅 비용이 다소 증가했지만 양사의 외형 성장을 바탕으로 영업이익은 BP 기조를 유지할 수 있었습니다.

Commerce revenue posted $203.7 billion won. It increased by 7% year-on-year based on the continued contactless consumption trend but decreased by 9.3% Q&Q due to concentrated promotions in Q4 including the 11th day event. Marketing expenses for 11th Street and SK Store increased in Q1, but operating income maintained the BEP level thanks to volume growth.

Next, Chung Il Ha, Head of Corporate Center 2, will discuss the achievements and strategic direction for the new ICT businesses.

Hello, I am Chung Il Ha, Head of Corporate Center 2. Good afternoon. I am Hyung Il Ha, head of Crypto Center 2. Allow me to discuss the achievements and plans for the new ICT businesses.

First is the media business. SK Broadband has secured 869,000 paid broadcast subscribers by the end of the first quarter.

The number of paid TV subscribers of SK Broadband stands at 8.69 million as of the end of Q1. Established by SK Broadband in January as a multiple program provider, Media S began regular broadcasting in April. In partnerships with Kakao Entertainment and SMCNC, 70% of the programs are exclusive content unavailable on other TV channels.

SK Broadband will strengthen the value chain of the media business, which is connected to content, channels, and platforms.

SK Broadband will strengthen the value chain in the media business that encompasses content, channels, and platforms. WAVE will further enhance competitiveness of original content, such as Taxi Driver, that is enjoying high viewer rating. We recently hired Chief Producer Chan Ho Lee, well known for dramas such as Signal and Stranger, as Chief Content Officer, and we're in the process of establishing a content planning studio. Next is the Security Division, which is renamed as Safety and Care Division.

Launched in March, the emerged entity of ADT Caps and SK InfoSec will leap forward as Korea's number one integrated security company.

In addition to achieving growth in the existing security domains, we will expand technology-based business models in new security domains such as securities for home, unmanned stores, and cloud.

ADT-CAPS has recently set up a business partnership to cooperate with AWS and cloud security businesses. ADT-CAPS's cloud security services are linked to AWS's solutions, and we will continue to work with AWS

ADT CAPS recently signed an agreement to cooperate with AWS for cloud security business. By combining ADT's cloud security services with AWS solutions, we will promote business together to gain market share in the financial and public sectors where there is high demand for transition to cloud.

Also, we are in the process of selecting a lead underwriter for IPO of ADT Caps, and we will do our best to prepare for the IDO. Next is Commerce Business. Commerce Business

Despite intensifying market competition, commerce achieved growth in both revenue and profitability year-on-year. 11th Street started Order Today, Deliver Tomorrow service through fulfillment service together with Korea Post. It is also selling popular products including daily necessities in partnerships with major domestic and global brands such as Amore and P&G Korea. In collaboration with Amazon, we are making preparations to allow customers to buy Amazon products on 11th Street. We plan to announce more details as soon as the service is ready to be launched. In addition to investment from Uber, T-Map Mobility has received 400 billion won of investments from financial investors based on a valuation of 1.4 trillion won.

T-Map Mobility was launched through joint investment of T-Map Mobility and Uber

and its differentiated services are expected to offer customers more choices and provide drivers with more revenue.

Finally, let me move on to One Store, which is preparing for an IPO.

With continued GMV growth for 11 consecutive quarters, one store received investments from KT and LG U+, thereby solidifying its position as Korea's representative at market. We acquired Rock Media and established a content studio as a joint venture with ES24, all of which are our efforts to secure K-content IPs and develop them in a variety of formats. I will now hand it back to the CFO. Thank you.

Thank you, Mr. Ha, for your presentation. Dear investors and analysts, we are pleased to have delivered earnings that exceeded the market consensus in this quarter. We announced a spin-off plan and canceled Treasury shares to enhance shareholder value.

We also demonstrated that the fundamentals in all our businesses have been strengthened.

I understand that many people want to know more about our dividend policy. After final decisions concerning the spin-off are made at the Board in the first half of the year,

We will share with you more details including a decision on the quarterly dividend.

We will continue to do our best for a successful spin-off. Let me reassure you that all the decisions we make will be to maximize shareholder value.

We ask for your continued support and interest. Thank you.

Now the Q&A session will begin. Please press 1 and 4 if you have any questions. Questions will be taken according to the order you have pressed the number 1 and 4. Please press 1 and 5 if you want to cancel your questions.

The first question will be provided by

Taewon Oh from Korea Investment and Securities. Please go ahead.

Thank you for the opportunity to ask a question. There are two questions. First of all, there are a few projects that do not appear in the process, such as WAVE or FLOW. I would appreciate it if you could share with us where you will go after the division, and if you can explain it in detail. Thank you very much for this opportunity. I would like to ask two questions. The first question is regarding the spin-off plan. Wave and Flow were not mentioned in your recent disclosure.

So I'd like to learn how these businesses and other subsidiaries will be divided between the surviving company and the spin-off company after the spin-off. The second question is related to your subscription service plan. You mentioned that in the second half of the year, you are going to launch an integrated subscription service. So can you provide us with some updates on your subscription service business plan? Mr. Oh, thank you very much for your questions.

Let me first answer your question regarding where wave and flow will go after the spin-off.

After the spin-off, the surviving company will grow as an AI-based infra company by combining the fixed and wireless telecommunication infrastructure and pursuing growth based on AI-centered subscription marketing and data center business.

The spin-off company will grow as an ICT investment company that is specialized in making aggressive investments in semiconductor life platforms and global tech seeding, thereby making various investments that will drive value up. In your question, you asked about Wave and Flow. They belong to media and content assets, thereby falling under the live platform area.

So under the spin-off company, they will become global businesses that will lead new lifestyles of customers. As for the specific business portfolios of the surviving company and the spin-off company, these will be finalized at the Board within the first half of the year. Let me now address your question regarding the subscription services.

We have been accumulating know-how and expertise in the subscription market by utilizing our telecommunication services. We believe that MNO is very competitive in providing subscription services.

In various areas such as telecommunications, media, and e-commerce, we have accumulated a large amount of data and we have the digital infrastructure that can cover product planning all the way to offering, and we also have marketing competitiveness in both online and offline channels.

Based on such expertise and capabilities, we believe that we can produce a sizable revenue not only based on SK Telecom customers but also 50 million Korean people.

We have been expanding the scope of subscription products to media, games, delivery, and education, and we're now in the process of developing product curation and offering based on AI technology in order to offer optimal packages for our customers. Furthermore, we are going to transform the existing team membership platform into a subscription marketing platform that is provided for entire population in Korea in the second half of the year. The subscription market in Korea was 49 trillion won in size last year and it is expected to grow to 100 trillion won of market by 2025. Our target for the subscription products and services is having the number of subscribers reach 35 million by 2025 and achieve the revenue size of 1.5 trillion won by 2025 by expanding partnerships and business models. I believe that we can take up about 20% of the market share of the subscription market that we can address. Thank you.

The next question will be provided by Mina Choi from Samsung Securities. Please go ahead.

Thank you for the question. I'm Mina Choi from Samsung Securities.

I'd like to ask you two questions. The first is, through the April public announcement, You said you will make a decision about the division in the first half of the year. Please comment on the future schedule. And the second question is about Tmap Mobility. It seems that Tmap is going to speed up its business promotion this year by raising funds from FI recently. Please share about the recent business situation. Thank you very much for this opportunity.

I would like to ask two questions. The first question is, in April, you made a disclosure that you will carry out the spinoff. And you mentioned that decisions related to the spinoff will be made in the first half of this year. Can you share with us the upcoming schedule regarding the spinoff? The second question is related to the TMAP Mobility. Recently, you received financial investments, and I believe that TMAP Mobility will start to accelerate its growth trajectory. So what is the current status of TMAP Mobility? And as for UTI, which was launched in collaboration with Uber, can you provide us with some specific growth strategies on this recently launched business?

Thank you for your question.

Thank you very much for these questions.

I'm going to answer your question regarding the schedule for the spin-off, and Hyung Il Ha will answer questions related to the team's mobility. Currently, we are reviewing the overall process regarding the spin-off and we aim to table the spin-off plan to the Board of Directors within the first half of the year.

In consideration of the board resolution process and the overall process for the spin-off and re-listing, we believe that the re-listing can be completed within November after the general shareholders' meeting in October.

Corporate 2 Center장 하형일입니다. 질문해주신 팀의 모빌리티 분사 이후 산업진행 현황에 대해서 말씀드리겠습니다.

I am Hyung Il Ha, Head of Corporate Center 2. I'd like to address your question related to the status of business of TMAP Mobility after the speed-off.

지난 12월에 공식 출범한 TMAP Mobility는 TMAP Life Platform, TMAP Auto, Mobility on Demand, Mobility as a Service 영역을 중심으로 사업을 진행하고 있습니다.

After officially launched in December last year, T-Map Mobility is carrying out business in the four key areas including the T-Map Life Platform, T-Map Auto, Mobility on Demand, and Mobility as a Service. In the first quarter of the year, we built a foundation for T-MAP mobility by receiving 400 billion won of financial investments from financial investors, and we have launched UTI in collaboration with Uber in order to offer differentiated services centered around taxis.

In this quarter, we plan to launch a subscription membership service that was not existing in the T-MAP life platform business area,

In the second quarter, we plan to introduce a completely new type of subscription membership services in the business area of T-MAP Life Platform, and we also plan to launch a driver-on-demand service as a pilot for B2C customers. These new services on the four core business areas will be launched as scheduled, which are expected to provide differentiated customer experience.

Now, I'd like to discuss the future strategy and the upcoming schedules for UT. On April 1st, U-T was officially launched based on the joint investment of Uber and T-Met Mobility.

U-T was officially launched based on the joint investment of Uber and T-Met Mobility. In the second half of the year, UT plans to launch a new service by combining Uber Taxi and T-Map Taxi. Initially, services will center around contracted taxi drivers and premium taxi services, but going forward, we plan to offer various mobile services and additional value-added services based on the taxi platform.

As a result, customers will be able to have more options in terms of taxi rides depending on the brands, price plans, and services.

At the same time, taxi drivers will benefit from these new services by increasing their sales through differentiated services and by reducing the time to drive around to spot customers.

We're not really able to give you any more details today, but we will be sure to communicate them with the market when the services are ready.

Thank you.

Thank you.

The next question will be provided by Hwae Jae Kim from Taishin Securities. Please go ahead.

Hello, I'm Hwae Jae Kim from Taishin Securities. This is a question about the delivery. In the last official comment, you announced that the total amount of money that will be transferred as a full-time delivery will not be reduced. Q. When does the dividend start? And please explain the dividend policy of each investor and business company by division. The second is a question related to Wave. You recently announced a 1 trillion won investment plan until 2025. In December 2019, the content that was released with an investment of 200 billion won was recognized as a value of 1 trillion won as a pre-money standard, and up to 2023, it was said that it would achieve 5 trillion won in revenue of 5 million people. Thank you for this opportunity. I would like to ask two questions. The first question is related to your dividend.

You mentioned that even though you start the quarterly dividend payout, the total amount of dividend payout will not go down. I'd like to know from when your quarterly dividend payout would begin, and what is the overall dividend payout policy for the two companies after the spinoff? The second question is related to your investment plan and business plan for Wave. You mentioned that by 2025, you are going to receive 1 trillion won of investment and you have various plans for WAVE. But this is quite different from what you mentioned previously when you were communicating with us regarding WAVE plan by 2023. So the amount of investment and the amount of revenue seems to have declined slightly when you are adjusting your target for 2025. So can you provide us with some color on what is your overall investment plan for WAVE? which you mentioned is going to be around 1 trillion won and what is your revenue plan and schedule for WAVE going forward?

Thank you very much for your questions. I'm going to address your question regarding the dividend policy and Mr. Ha from Corporate Center 2 will address your question regarding WAVE.

Even after the spin-off, we will continue to maintain the shareholder-friendly management principle.

We will make sure that regardless of the spin-off, the surviving company's level of dividend payout will be at least similar to that of last year. As Korea's number one fixed and wireless telecommunications company, as the rollout of 5G is accelerating, we believe that our operating income and the cash flow will be sustained going forward.

As such, we will make sure that we have the shareholder return policy so that earnings growth will lead to increased shareholder returns including dividend payouts.

At the annual General Shareholders Meeting, we created a basis for quarterly dividend payouts

After discussions at the Board of Directors, we will carry out this new dividend policy plan so that we can start paying out the quarterly dividend by starting from the end of the second quarter. The timing for the quarterly payout for the first quarter has already passed, but this portion will be combined for the fourth quarter dividend payout so that we can maintain the level of dividend payout to our shoulders to be at least same or similar to that of last year. As for the spin-off company, which will become a specialized investment company, we will make sure that their growth potential of the investment portfolio will be recognized, and by actively attracting investment and pursuing IPOs, we will make sure that the corporate value of these businesses will be rightly recognized in the market. As for the dividend policy of the new company, after the spin-off is finalized and after the board of directors is composed, we will be able to communicate to the market more details later.

Corporate E2 Center장 하형일입니다. Wave 23년 가입자 및 매출 목표에 대해서 먼저 말씀드리겠습니다.

I am Hyung Il Ha, head of Corporate Center 2. Let me first comment on the subscriber target and the revenue target of WAVE before 2023.

WAVE continues to increase the number of subscribers after breaking 2 million subscribers in 20 years due to the impact of IU's advertisement effect that started last year.

As we increase the original content lineup and the popularity of Penthouse Season 2, and as a result of the successful advertising with IU that began at the end of last year, WAVE was able to enjoy the growth in its paid TV subscribers by reaching 2 million within last year, and this subscriber growth trend is continuing.

As we continue to differentiate WAVE services based on content from terrestrial broadcasting stations and original content, we believe that we can achieve the initial target of having 5 million paid subscribers

and the revenue of 500 billion won by 2023 and we believe that we can achieve this earlier than the original target.

Let me now comment on the ways we want to secure 1 trillion won of investment for Wave.

In March, WAVE made an announcement of making an investment in original content, which is worth 1 trillion won, which will be done by 2025.

SK Telecom is planning to provide investment resources through existing funds, including 100 billion won, for external investment and content revenue reinvestment.

The financial sources for these investments will come from a variety of sources, including the rights offering of 100 billion won of Teske Telecom, as well as external investments and reinvestment of profit from content business.

In terms of external investment, we have received 2 billion won of FI investment in 2019, and we are currently planning a second funding. I will explain this in more detail later.

As for raising external investments, we already received 200 billion won of financial investments in 2019, and we're now in the process of preparing for the second round of funding. As for the second round, as soon as details are prepared, we're going to communicate them with the market.

Thank you.

Thank you.

Next question is from Lee Seung-hyun of Citigroup. Please go ahead.

The next question will be provided by Sean Lee from Citigroup. Please go ahead.

Thank you for your question. I have two questions. The first question is related to security business. Please tell us about the current status of ADD CACs and SK Inputs, and how they are being operated in the first quarter, and what kind of synergy you are expecting. The second question is related to M&O business. Thank you for this opportunity. I would like to ask two questions. The first question is related to your security business. The ADT Caps and SK InfoSec were merged in the first quarter.

So what's the current status and the operation of this merged entity, and what kinds of synergy are you expecting from this merger? The second question is related to your MNO business. What is your 5G subscriber target by the end of this year? I understand that your initial target by the end of this year was 9 million, but there was a very big net ask in the first quarter, so I'm asking this question. Thank you very much for your questions.

I will address your question related to the 5G subscriber growth trend, and Mr. Ha from Corporate Center 2 will answer your question related to the security business.

As we have made continued efforts to offer new 5G products and improve the service quality of 5G services, and as we were improving the 5G ecosystem with new flagship handset launches, we were able to achieve the 5G subscriber number to 6.74 million By the end of this quarter compared to last year, there was a net add of 1.26 million compared to the end of last year.

At the beginning of the year, we mentioned that our 5G subscriber target for this year was 9 million, but considering the current trend, we think that we can achieve even 10 million.

The new tariff schemes for 5G and on-tact price plans that SK Telecom has recently offered to satisfy various customer needs are expected to provide customers with more choices and reasonable prices, thereby accelerating 5G migration.

Let me now respond to your question regarding the synergy of ADT CAHPS and SK InfoSec.

We successfully completed the process of merging ADT CAPS and SK InfoSec in March. As a result, we have merged ADT CAPS with the revenue size of 1.3 trillion won and EBITDA of 357 billion won.

The 21-year annual sales are expected to reach 1.6 trillion won based on the combination of infrastructure and capacity that the two companies have.

Various activities are underway in earnest in order to maximize the energy from these two entities based on our infrastructure for security and various capabilities. We expect the annual revenue for 2021 to be 1.6 trillion won.

Also, in order to become a global cloud security company, Amazon AWS and strategic business cooperation were established last April.

In addition, in order to become a global cloud security provider, we have signed an agreement to pursue strategic cooperation with Amazon AWS in April. I can discuss the effect of synergy from the customer perspective and product perspective.

First of all, from a customer perspective, SK InfoSec has a large volume of B2B customers including large enterprises, and ADT Caps has B2C customers including small and medium enterprises and single businesses. And by completing these From the product perspective, we are expected to provide customized one-stop services that combine physical security, information security, and building management as combined solutions. For instance, when there is a cyber intrusion or detection of malicious codes, we can do video analysis by utilizing the platform data

And by leveraging on our access control system, we can detect any intruders to buildings and assets. And such flexible response will become more possible.

Thank you.

The next question will be provided by Neil Anderson from HSBC. Please go ahead.

Thank you very much and good afternoon. Just have one question, please, and it relates to the media business and the sequential improvement in operating margin in the first quarter. So for the three quarters last year, it was around 6.7%. and it's increased to 7.8% in the first quarter. So my question is how sustainable is that and what are your margin targets for this year? Thank you.

This is a question related to the margin. The sales margin was about 6.5% in the last three quarters, and it is recorded to be 7.8% in this quarter. Do you think this margin increase is possible? Thank you for your question.

The performance improvement of SK Broadband has a variety of factors.

We believe that there are various factors that have contributed to improvement in the operating margin of SK Broadband.

First of all, there is a negative effect of T-Broad's convenience. Second, the home shopping delivery fee is continuously increasing with the increase in the number of subscribers. Third, the number of IPTV subscribers is also continuously increasing. Fourth, I think it is a result of efficient capex implementation and effort to reduce costs.

So these various factors include the effect of the T-Broad merger. That's the first factor. The second factor is the increase in the subscriber base and increase in the commission's income from home shopping broadcasting. The third factor is the continued increase in the IPTV subscriber base. And the final factor would be effective CapEx implementation and cost efficiency. We will continue to make efforts to increase the subscriber base and carry out our business in a more efficient manner so that we can maintain and increase profitability of the media business. Thank you.

The next question will be provided by Stanley Yang from J.B. Morgan. Please go ahead.

Yes, thank you for the question. The first question is, you said that you are reviewing the balance of the new settlement law. If you maintain 10,000 won in the existing M&O law and if the balance is paid after the new settlement law, do you think that the sum of the balance will be higher than the current amount? The second question is, I have high expectations for the launch of the subscription model. How many subscription models will be released in the second half of the subscription model? Or will one of the combined subscription models, such as Amazon Prime, be launched and one of them will cover several services? I'm curious about whether this is the same as the existing MNO.

Thank you for this opportunity to ask questions. The first question is related to your dividend policy. You mentioned that detailed decisions regarding the dividend policy for the spin-off company will be made soon. But can I safely assume that given the MNO dividend payout level of 10,000 won per share, and in assuming that there will be dividend payout from the new spin-off company, can we anticipate that the total amount of dividend payout from SK Telecom will increase going forward? The second question is related to your subscription business model. There are high expectations for subscription services, and I'd like to know if your subscription model would be to push several subscription models and services separately or to follow the model of Amazon where you have one single subscription platform where multiple services are provided. If you continue to launch these new subscription services, are they going to be linked with your MNO, telecom subscribers, or are they going to be operated separately?

Thank you for your question. I will answer your question about the policy of sharing. As for the subscription service, I will answer the question from Myung-Jin Han, who is currently leading the subscription service.

Thank you very much for your questions. I'm going to respond to your question on the dividend policy, and Han Myung-Jin, head of subscription service company, will answer the second question.

In relation to the dividend, you are right. It is expected that the dividend will be more than the existing dividend in the MNO, which is the original law. As I said, the dividend policy of the new law has not yet been decided,

As for the first question on our dividend policy, your understanding is correct. The dividend payout from the M&O business as part of the surviving company will be similar or more than the previous level of dividend payout. And on top of that, we have not yet decided on the dividend policy of the spin-off company But if they start to pay out dividend, it's going to be a plus alpha. As I mentioned earlier, when the board of directors is composed for the spin-off company and when discussions on the dividend policy are made, we're going to communicate them with the market.

The second question is from Myung-Jin Han, the owner of the subsidiary company. I am Han Myung-Jin.

I am the head of the subscription business and let me address your second question.

As you may understand, we have many family businesses under the ICT umbrella and there are many different services and products that we are preparing

that will help enhance the likelihood of customers.

Basically, I can say that our model will be similar to Amazon Prime where there will be an integrated subscription paradigm

In addition to that, we are planning to offer additional services and products for subscription. So we're planning to charge a monthly subscription fee for the subscription customers.

MNO 통신요금과 연계에 대해서는 지금 구독 사업 자체가 5천만 고객 대상으로 새로운 구독 상품을 제공한다는 측면에서 기존의 MNO 통신요금과의 연계는 당장 고려하고 있지는 않습니다.

As for your question regarding the connection with MNO services, we are currently planning this subscription platform to reach out to 50 million Korean population. So we're currently not considering any linkage between the subscription services and the MNO fees. Thank you.

This concludes the conference call for the first quarter of 2021. Thank you.