##### Table of Contents





As filed with the Securities and
    Exchange Commission on June 30, 2009
      UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
    Form 20-F
     (Mark One)o

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

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2008ORo

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

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
 11, Euljiro 2-Ga, Jung-gu,
    Seoul, Korea
 (Address of principal executive
    offices)
  Mr. Kyung-hwan
    Chung
 11, Euljiro 2-Ga, Jung-gu,
    Seoul, Korea
 Telephone No.:
    82-2-6100-2114
 Facsimile No.:
    82-2-6100-7827
 (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

Name of Each Exchange on Which RegisteredAmerican Depositary Shares, each representing one-ninth of one
    shares of Common Stock

New York Stock ExchangeCommon Stock, par value W500 per share

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
    72,486,015 shares of common stock, par value
    W500 per share (not including
    8,707,696 shares of common stock held by the company as
    treasury shares)
  þ o
  o þ
  þ o
  Regulation S-T o o
  Rule 12b-2
  Large accelerated
    filer þ

Accelerated
    filer o

Non-accelerated
    filer o     U.S.
    GAAP  o     IFRS  o     Other  þ
  o þ
  Rule 12b-2 o þ
  (APPLICABLE ONLY TO ISSUERS
    INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE
    YEARS)
  o o




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##### Table of Contents





TABLE OF
    CONTENTS
   
 PageCERTAIN DEFINED TERMS AND CONVENTIONS USED IN
    THIS REPORT


1FORWARD-LOOKING STATEMENTS


2ITEM 1. IDENTITY OF DIRECTORS, SENIOR
    MANAGEMENT AND ADVISERS


3Item 1.A. Directors and Senior Management


3Item 1.B. Advisers


3Item 1.C. Auditor


3ITEM 2. OFFER STATISTICS AND EXPECTED
    TIMETABLE


3ITEM 3. KEY INFORMATION


3Item 3.A. Selected Financial Data


3Item 3.B. Capitalization and Indebtedness


8Item 3.C. Reasons for the Offer and Use of
    Proceeds


8Item 3.D. Risk Factors


8ITEM 4. INFORMATION ON THE COMPANY


22Item 4.A. History and Development of the
    Company


22Item 4.B. Business Overview


25Item 4.C. Organizational Structure


50Item 4.D. Property, Plants And Equipment


50ITEM 4A. UNRESOLVED STAFF COMMENTS


51ITEM 5. OPERATING AND FINANCIAL REVIEW AND
    PROSPECTS


51Item 5.A. Operating Results


51Item 5.B. Liquidity and Capital Resources


59Item 5.C. Research and Development


72Item 5.D. Trend Information


74Item 5.E. Off-Balance Sheet Arrangements


74Item 5.F. Tabular Disclosure of Contractual
    Obligations


74Item 5.G. Safe Harbor


74ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND
    EMPLOYEES


74Item 6.A. Directors and Senior Management


74Item 6.B. Compensation


76Item 6.C. Board Practices


76Item 6.D. Employees


77Item 6.E. Share Ownership


79ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY
    TRANSACTIONS


79Item 7.A. Major Shareholders


79Item 7.B. Related Party Transactions


81Item 7.C. Interests of Experts and
    Counsel


82ITEM 8. FINANCIAL INFORMATION


82Item 8.A. Consolidated Statements and Other
    Financial Information


82Item 8.B. Significant Changes


85ITEM 9. THE OFFER AND LISTING


85Item 9.A. Offering and Listing Details


85Item 9.B. Plan of Distribution


85Item 9.C. Markets


86




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PageItem 9.D. Selling Shareholders


93Item 9.E. Dilution


93Item 9.F. Expenses of the Issue


93ITEM 10. ADDITIONAL INFORMATION


93Item 10.A. Share Capital


93Item 10.B. Memorandum and Articles of
    Incorporation


93Item 10.C. Material Contracts


106Item 10.D. Exchange Controls


106Item 10.E. Taxation


111Item 10.F. Dividends and Paying Agents


115Item 10.G. Statements by Experts


115Item 10.H. Documents on Display


115Item 10.I. Subsidiary Information


115ITEM 11. QUANTITATIVE AND QUALITATIVE
    DISCLOSURES ABOUT MARKET RISK


115ITEM 12. DESCRIPTION OF SECURITIES OTHER
    THAN EQUITY SECURITIES


116ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND
    DELINQUENCIES


116ITEM 14. MATERIAL MODIFICATIONS TO THE
    RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS


116ITEM 15. CONTROLS AND PROCEDURES


116ITEM 16. RESERVED


117Item 16A. AUDIT COMMITTEE FINANCIAL
    EXPERT


117Item 16B. CODE OF ETHICS


118Item 16C. PRINCIPAL ACCOUNTANT FEES AND
    SERVICES


118Item 16D. EXEMPTIONS FROM THE LISTING
    STANDARDS FOR AUDIT COMMITTEES


118Item 16E. PURCHASES OF EQUITY SECURITIES BY
    THE ISSUER AND AFFILIATED PURCHASERS


119Item 16G CORPORATE GOVERNANCE


120ITEM 17. FINANCIAL STATEMENTS


121ITEM 18. FINANCIAL STATEMENTS


121ITEM 19. EXHIBITS


121EX-1.1 ARTICLES OF INCORPORATIONEX-8.1 LIST OF SUBSIDIARIESEX-12.1 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO SECTION 302EX-12.2 CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO SECTION 302EX-13.1 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350EX-13.2 CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350EX-99.1 CONSENT OF DELOITTE ANJIN LLC   ii




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##### Table of Contents



CERTAIN
    DEFINED TERMS AND CONVENTIONS USED IN THIS REPORT        W
       1




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##### Table of Contents



FORWARD-LOOKING
    STATEMENTS      
    our ability to anticipate and respond to various competitive
    factors affecting the wireless telecommunications industry,
    including new services that may be introduced, changes in
    consumer preferences, economic conditions and discount pricing
    strategies by competitors;
    our implementation of high-speed downlink packet access, or
    HSDPA, technology, high-speed uplink packet access, or HSUPA,
    technology and wireless broadband internet, or WiBro, technology;
    our plans for capital expenditures in 2009 for a range of
    projects, including investments in our backbone networks (and
    expansion of our WiBro network in particular), investments to
    improve our WCDMA network-based products and services,
    investments in our wireless Internet-related and convergence
    businesses and funding for mid-to long-term research and
    development projects, as well as other initiatives, primarily
    related to our ongoing businesses and in the ordinary course;
    our efforts to make significant investments to build, develop
    and broaden our businesses, including developing and providing
    wireless data, multimedia, mobile commerce and Internet services;
    our ability to comply with governmental rules and regulations,
    including the regulations of the KCC, related to
    telecommunications providers, rules related to our status as a
    market-dominating business entity under the Korean
    Monopoly Regulation and Fair Trade Act, or the Fair Trade Act,
    and the effectiveness of steps we have taken to comply with such
    regulations;
    our ability to manage effectively our bandwidth and to implement
    timely and efficiently new bandwidth-efficient technologies;
    our expectations and estimates related to interconnection fees;
    tariffs charged by our competitors; regulatory fees; operating
    costs and expenditures; working capital requirements; principal
    repayment obligations with respect to long-term borrowings,
    bonds and obligations under capital leases; and research and
    development expenditures and other financial estimates;
    the success of our various joint ventures and investments in
    other telecommunications service providers;
    our ability to successfully manage our acquisition in 2008 of an
    additional 38.7% stake in SK Broadband Co., Ltd. (formerly
    hanarotelecom incorporated), or SK Broadband, a fixed-line
    telecommunications operator and broadband Internet service
    provider; and
    the growth of the telecommunications industry in Korea and other
    markets in which we do business and the effect that economic,
    political or social conditions have on our number of
    subscribers, call volumes and results of operations.   2




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##### Table of Contents



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.
    Auditor  Not applicable.
  Item 2.
    OFFER
    STATISTICS AND EXPECTED TIMETABLE  Not applicable.
  Item 3.
    KEY
    INFORMATION  Item 3.A.
    Selected
    Financial Data      As of or for the Year Ended December 31,2004


2005


2006


2007


2008


2008(In billions of Won and millions of Dollars, except per share
    and percentage data)INCOME STATEMENT DATAKorean GAAP:Total Operating Revenue(1)

W
10,570.6


W
10,721.8


W
11,028.0


W
11,863.4
(19)

W
14,021.0


US$
11,110.1Cellular Service(1)


10,297.6



10,361.9



10,515.6



11,016.1



11,389.8



9,025.2Broadband Internet and Fixed-line Telephone Service


















1,821.8



1,443.5Other(2)


273.0



359.9



512.4



847.3
(19)


809.4



641.4Operating Expenses


8,130.9



8,051.2



8,406.9



9,761.4
(19)


12,268.5



9,721.5Operating Income


2,439.7



2,670.6



2,621.1



2,102.0
(19)


1,752.5



1,388.6Income from Continuing Operation before Income Tax


2,123.2



2,561.6



2,021.6



2,285.8
(19)


1,258.7



997.4Net Income(3)


1,493.4



1,868.3



1,449.6



1,562.3



972.3



770.4Net Income per Share(4)


20,261



25,443



19,801



22,696



16,707



13.24Diluted Net Income per Share(4)


20,092



25,036



19,523



22,375



16,559



13.12Dividends Declared per Share


10,300



9,000



8,000



9,400



9,400



7.45Weighted Average Number of Shares


73,614,296



73,614,296



73,305,026



72,650,909



72,765,557



72,765,557U.S. GAAP:Total Operating Revenue

W
10,534.6


W
10,701.4


W
10,541.8


W
11,212.4


W
11,157.6


US$
8,841.2Operating Expenses


8,137.6



7,847.7



7,720.0



9,144.3



9,404.0



7,451.7Operating Income


2,397.0



2,853.7



2,821.8



2,068.1



1,753.6



1,389.5Net Income(4)


1,554.6



2,019.6



1,878.3



1,505.3



1,072.9



850.2Net Income per Share(4)(5)


21,118



27,435



25,624



20,720



14,744



11.7Diluted Net Income per Share(4)(5)


20,939



26,983



25,207



20,730



14,606



11.6  3




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##### Table of Contents



As of or for the Year Ended December 31,2004


2005


2006


2007


2008


2008(In billions of Won and millions of Dollars, except per share
    and percentage data)BALANCE SHEET DATAKorean GAAP:Working Capital(6)

W
1,323.8


W
1,735.2


W
1,455.5


W
1,796.2


W
793.6


US$
628.9Property and Equipment, Net


4,703.9



4,663.4



4,507.3



4,969.4



7,437.7



5,893.6Total Assets


14,283.4



14,704.8



16,240.0



19,048.9



22,473.7



17,808.0Non-current Liabilities(7)


4,010.7



3,513.9



3,548.5



4,344.4



6,020.4



4,770.5Capital Stock


44.6



44.6



44.6



44.6



44.6



35.4Total Shareholders Equity


7,205.7



8,327.5



9,483.1



11,687.6



11,824.4



9,369.6U.S. GAAP:Working Capital (Deficiency)

W
1,311.3


W
1,587.2


W
1,286.2


W
1,751.1


W
738.0


US$
584.8Total Assets(4)


15,592.0



16,356.5



17,909.4



20,173.6



21,239.2



16,829.8Total Shareholders Equity(4)


8,252.2



9,477.7



10,718.4



12,657.8



12,227.1



9,688.7   As of or for the Year Ended December 31,2004


2005


2006


2007


2008


2008(In billions of Won and millions of Dollars, except per share
    and percentage data)OTHER FINANCIAL DATAKorean GAAP:EBITDA(3)(8)

W
4,087.7


W
4,429.5


W
3,879.1


W
4,366.0


W
4,008.4


US$
3,176.2Capital Expenditures(9)


1,631.9



1,416.6



1,498.1



1,804.1



2,236.9



1,772.5R&D Expenses(10)


336.1



321.1



279.0



293.1



299.7



237.5Internal R&D


267.1



252.0



212.0



218.7



226.7



179.7External R&D


69.0



69.1



67.0



74.4



73.0



57.8Depreciation and Amortization


1,752.5



1,675.5



1,698.4



1,971.3



2,759.3



2,186.5Cash Flow from Operating Activities


2,527.9



3,407.1



3,589.8



3,721.7
(20)


3,296.9
(20)


2,612.4
(20)Cash Flow from Investing Activities


(1,470.3
)


(1,938.2
)


(2,535.2
)


(2,414.9
)(20)


(3,875.4
)(20)


(3,070.8
)(20)Cash Flow from Financing Activities


(968.6
)


(1,429.0
)


(952.4
)


(1,041.3
)(20)


869.4
(20)


688.9
(20)Margins (% of total sales):EBITDA Margin(8)(11)


38.7
%


41.3
%


35.2
%


36.8
%


29.5
%


29.5
%Operating Margin(11)


23.1



24.9



23.8



17.7



12.1



12.1Net Margin(11)


14.1



17.4



13.1



13.2



7.1



7.1U.S. GAAP:EBITDA(4)(8)

W
3,971.9


W
4,404.2


W
4,527.4


W
3,960.9


W
3,277.4


US$
2,597.0Capital Expenditures(9)


1,656.9



1,429.3



1,538.0



1,854.0



1,861.0



1,474.6Cash Flow from Operating Activities


3,237.9



3,296.8



3,614.8



3,284.8



2,698.7



2,138.4Cash Flow from Investing Activities


(1,634.1
)


(1,816.5
)


(2,560.6
)


(2,385.2
)


(3,926.9
)


(3,111.6
)Cash Flow from Financing Activities


(1,514.8
)


(1,439.3
)


(940.6
)


(631.3
)


1,118.7



886.5   4




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As of or for the Year Ended December 31,2004


2005


2006


2007


2008


2008SELECTED OPERATING DATAPopulation of Korea (millions)(12)


48.2



48.3



48.3



48.5



48.6



48.6Our Wireless Penetration(13)


39.0
%


40.4
%


42.0
%


45.3
%


47.4
%


47.4
%Number of Employees(14)


7,353



6,646



7,676



9,485



10,626



10,626Total Sales per Employee (in millions of Won and thousands of
    Dollars)

W
1,437.6


W
1,613.3


W
1,436.7


W
1,267.1


W
1,319.5


US$
1,045.6Wireless Subscribers(15)


18,783,338



19,530,117



20,271,133



21,968,169



23,032,045



23,032,045Average Monthly Outgoing Voice Minutes per Subscriber(16)


194



197



201



201



200



200Average Monthly Revenue per Subscriber(17)

W
39,689


W
40,205


W
40,220


W
40,154


W
38,526


US$
30.53Average Monthly Churn Rate(18)


1.7
%


1.8
%


2.0
%


2.6
%


2.7
%


2.7
%Digital Cell Sites


9,458



10,142



12,515



16,099



17,213



17,213     *
    
    The translation into Dollars was made at the rate of Won 1,262.0
    to US$1.00. See note 2(a) of the notes to our consolidated
    financial statements.(1)
    
    Includes revenues from SK Teletech Co., Ltd. of Won
    649.8 billion for 2004 and Won 294.6 billion for 2005
    from the sale of digital handsets and Won 849.4 billion for
    2004, Won 898.6 billion for 2005,
    Won 1,033.4 billion for 2006, Won 1,062.2 billion
    for 2007 and Won 1,149.2 billion for 2008 of
    interconnection revenue. Following our sale of a 60% equity
    interest in SK Teletech to Pantech & Curitel in July
    2005, our equity interest in the company was reduced to 29.1%
    (which subsequently became a 22.7% interest in Pantech following
    the merger of SK Teletech into Pantech in December
    2005) and SK Teletech ceased to be our consolidated
    subsidiary. Following the exclusion of SK Teletech from
    consolidation, we did not derive revenues from digital handset
    sales.(2)
    
    For more information about our other revenue, see
    Item 5. Operating and Financial Review and
    Prospects and Item 4.B. Business Overview.(3)
    
    As of January 1, 2007, we adopted Statements of Korean
    Accounting Standards, or SKAS No. 25. Pursuant to adoption
    of SKAS No. 25, net income is allocated to equity holders
    of the parent and minority interest. In addition, when a
    subsidiary is purchased during the fiscal year, the
    subsidiarys statement of income is included in
    consolidation as though it had been acquired at the beginning of
    the fiscal year, and pre-acquisition earnings are presented as a
    separate deduction within the consolidated statements of income.
    The consolidated statements of income for the years ended
    December 31, 2006 appearing in our consolidated financial
    statements included elsewhere in this report have been
    reclassified in accordance with SKAS No. 25.(4)
    
    Adjusted to retroactively reflect our acquisition of an
    additional 38.7% equity stake in SK Broadband in March 2008,
    increasing our total equity interest in SK Broadband to 43.4%.(5)
    
    Net income per share is calculated by dividing net income
    attributable to majority interest by the weighted average number
    of shares outstanding during the period. Diluted net income per
    share is calculated by dividing adjusted net income by adjusted
    weighted average number of shares outstanding during the period,
    taking into account the issuance of convertible bonds in 2004,
    2005, 2006, 2007 and 2008.(6)
    
    Working capital means current assets minus current liabilities.(7)
    
    Our monetary assets and liabilities denominated in foreign
    currencies are valued at the exchange rate of Won 1,044 to
    US$1.00 as of December 31, 2004, Won 1,013 to US$1.00 as of
    December 31, 2005, Won 930 to US$1.00 as of
    December 31, 2006, Won 938 to US$1.00 as of
    December 31, 2007 and Won 1,258 to US$1.00 as of
    December 31, 2008, the rates of exchange permitted under
    Korean GAAP as of those dates. See note 2(w) of the notes
    to our consolidated financial statements.(8)
    
    EBITDA refers to income before interest income, interest
    expense, taxes, depreciation and amortization. EBITDA is
    commonly used in the telecommunications industry to analyze
    companies on the basis of operating performance. Since the
    telecommunications business is a very capital intense business,
    capital 5




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expenditures and level of debt and interest expenses may have a
    significant impact on net income for companies with similar
    operating results. Therefore, for a telecommunications company
    such as ourselves, we believe that EBITDA provides a useful
    reflection of our operating results. We use EBITDA as a
    measurement of operating performance because it assists us in
    comparing our performance on a consistent basis as it removes
    from our operating results the impact of our capital structure,
    which includes interest expense from our outstanding debt, and
    our asset base, which includes depreciation and amortization of
    our property and equipment. However, EBITDA should not be
    construed as an alternative to operating income or any other
    measure of performance determined in accordance with Korean GAAP
    or U.S. GAAP or as an indicator of our operating performance,
    liquidity or cash flows generated by operating, investing and
    financing activities. Other companies may define EBITDA
    differently than we do. EBITDA under U.S. GAAP is computed using
    interest income, interest expense, depreciation, amortization
    and income taxes under U.S. GAAP, which may differ from Korean
    GAAP for these items.(9)
    
    Consists of investments in property, plant and equipment. Under
    U.S. GAAP, interest costs incurred during the period required to
    complete an asset or ready an asset for its intended use are
    capitalized based on the interest rates a company pays on its
    outstanding borrowings. Under Korean GAAP, such interest costs
    are expensed as incurred.(10)
    
    Includes donations to Korean research institutes and educational
    organizations. See Item 5.C. Research and
    Development.(11)
    
    Operating revenue and operating income used in the calculation
    of these ratios for 2007 and 2008 include the operating revenue
    and operating income from the discontinued operation, but
    exclude the operating revenue and operating income of
    newly-consolidated subsidiaries prior to the date of
    consolidation.(12)
    
    Population estimates based on historical data published by the
    National Statistical Office of Korea.(13)
    
    Wireless penetration is determined by dividing our subscribers
    by total estimated population, as of the end of the period.(14)
    
    Includes regular employees and temporary employees. See
    Item 6.D. Employees.(15)
    
    Wireless subscribers include those subscribers who are
    temporarily deactivated, including (1) subscribers who
    voluntarily deactivate temporarily for a period of up to three
    months no more than twice a year and (2) subscribers with
    delinquent accounts who may be involuntarily deactivated up to
    two months before permanent deactivation, which we determine
    based on various factors, including prior payment history.(16)
    
    The average monthly outgoing voice minutes per subscriber is
    derived by dividing the total minutes of outgoing voice usage
    for the period by the monthly average number of subscribers for
    the period, then dividing that number by the number of months in
    the period. The monthly average number of subscribers is derived
    by dividing (i) the sum of the average number of
    subscribers for each month in the period, calculated as the
    average of the number of subscribers on the first and last days
    of the relevant month, by (ii) the number of months in the
    period.(17)
    
    The average monthly revenue per subscriber excludes
    interconnection revenue and is derived by dividing the sum of
    total initial subscription fees, monthly plan-based fees, usage
    charges for outgoing voice calls, usage charges for wireless
    data services, value-added service fees and other miscellaneous
    revenues for the period by the monthly average number of
    subscribers for the period, then dividing that number by the
    number of months in the period. Including interconnection
    revenue, average monthly revenue per subscriber was Won 43,542
    for 2004, Won 44,167 for 2005, Won 44,599 for 2006, Won 44,416
    for 2007 and Won 43,016 for 2008.(18)
    
    The average monthly churn rate for a period is the number
    calculated by dividing the sum of voluntary and involuntary
    deactivations during the period by the simple average of the
    number of subscribers at the beginning and end of the period,
    then dividing that number by the number of months in the period.
    Churn includes subscribers who upgrade to CDMA lxRTT or CDMA
    1xEV/ DO-capable handsets by terminating their service and
    opening a new subscriber account.(19)
    
    As a result of our sale of HELIO LLC (HELIO) to
    Virgin Mobile USA, Inc. in August 2008, HELIOs results of
    operations have been classified as discontinued operations.
    Operating revenue, operating expenses, operating income and
    income before income taxes and minority interest for the year
    ended December 31, 2007 have been revised to exclude
    HELIOs results of operations.(20)
    
    Cash flow activities from discontinued operation for the years
    ended December 31, 2007 and 2008 have been excluded. 6




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As of or for the Year Ended December 31,2004


2005


2006


2007


2008


2008(1)(In billions of Won and millions of Dollars)U.S. GAAP:Net Income(2)

W
1,554.6


W
2,019.6


W
1,878.3


W
1,505.3


W
1,072.9


US$
850.2LESS: Interest income


(86.7
)


(62.6
)


(86.8
)


(99.0
)


(121.8
)


(96.5
)ADD: Interest expense


291.0



226.8



241.7



204.0



240.2



190.3Taxes


611.1



667.1



686.8



576.9



161.7



128.1Depreciation and Amortization


1,601.9



1,553.3



1,807.4



1,773.7



1,924.4



1,524.9EBITDA(2)

W
3,971.9


W
4,404.2


W
4,527.4


W
3,960.9


W
3,277.4


US$
2,597.0     (1)
    
    The translation into Dollars was made at the rate of Won 1,262.0
    to US$1.00. See note 2(a) of the notes to our consolidated
    financial statements.(2)
    
    Adjusted to retroactively reflect our acquisition of an
    additional 38.7% equity stake in SK Broadband in March 2008,
    increasing our total equity interest in SK Broadband to 43.4%.    As of or for the Year Ended December 31,2004


2005


2006


2007


2008


2008(1)(In billions of Won and millions of Dollars)Korean GAAP:Net Income

W
1,493.4


W
1,868.3


W
1,449.6


W
1,562.3


W
972.3


US$
770.4LESS: Interest income


(80.5
)


(61.1
)


(80.0
)


(93.9
)(2)


(136.3
)(2)


(108.0
)ADD: Interest expense


303.4



253.5



239.1



235.3
(2)


344.6
(2)


273.1Taxes


629.8



693.3



572.0



694.5
(2)


188.9
(2)


149.7Depreciation and Amortization


1,741.6



1,675.5



1,698.4



1,967.8
(2)


2,638.9
(2)


2,091.0EBITDA

W
4,087.7


W
4,429.5


W
3,879.1


W
4,366.0


W
4,008.4


US$
3,176.2     (1)
    
    The translation into Dollars was made at the rate of Won 1,262.0
    to US$1.00. See note 2(a) of the notes to our consolidated
    financial statements.(2)
    
    In accordance with SKAS No. 25, which we adopted in 2007,
    when a subsidiary is purchased during the fiscal year, the
    subsidiarys statement of income is included in
    consolidation as though it had been acquired at the beginning of
    the fiscal year, and pre-acquisition earnings are presented as a
    separate deduction within the consolidated statements of income.
    For purposes of reconciling net income under Korean GAAP with
    EBITDA, the interest income, interest expense, taxes and
    depreciation and amortization amounts for 2007 and 2008 shown in
    the table above exclude, with respect to subsidiaries newly
    consolidated in 2007 or 2008, the income earned and expense
    incurred by such subsidiaries prior to the date of
    consolidation. In addition, interest income, interest expense,
    taxes and depreciation and amortization amounts for 2007 and
    2008 shown in the table above include income earned and expense
    incurred from discontinued operations. As a result, the interest
    income, interest expense, taxes and depreciation and
    amortization amounts for 2007 and 2008 that appear in the table
    above differ from those set forth in our consolidated statements
    of income and consolidated statements of cash flows for the
    years ended December 31, 2007 and 2008, respectively. 7




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##### Table of Contents



Exchange
    Rates
    At End of


AverageYear Ended December 31,

Period


Rate(1)


High


Low(Won per US$1.00)2004


1,035.1



1,139.3



1,195.1



1,035.12005


1,010.0



1,023.7



1,059.8



997.02006


930.0



950.1



1,002.9



913.72007


935.8



928.0



950.2



903.22008


1,262.0



1,105.8



1,507.9



935.2   Past Six MonthsHigh


Low(Won per US$1.00)December 2008


1,479.0



1,257.4January 2009


1,391.5



1,292.3February 2009


1,532.8



1,368.7March 2009


1,570.1



1,334.8April 2009


1,378.3



1,277.0May 2009


1,277.0



1,232.9June 2009 (through June 19, 2009)


1,269.0



1,232.1       (1)
    
    The average rates for the annual periods were calculated based
    on the average noon buying rate on the last day of each month
    (or portion thereof) during the period.    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  Competition
    may reduce our market share and harm our results of operations
    and financial condition.
   8




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9




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Inability
    to successfully implement or adapt our network and technology to
    meet the continuing technological advancements affecting the
    wireless industry will likely have a material adverse effect on
    our financial condition, results of operation, cash flows and
    business.
          Implementation
    of 3G and WiBro technologies has required, and may continue to
    require, significant capital and other expenditures, which we
    may not recoup.
       10




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Our
    growth strategy calls for significant investments in new
    businesses and regions, including businesses and regions in
    which we have limited experience.
       11




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##### Table of Contents



Due to
    the existing high penetration rate of wireless services in
    Korea, we are unlikely to maintain our subscriber growth rate,
    which could adversely affect our results of
    operations.
    Our
    business and results of operations may be adversely affected if
    we fail to acquire adequate additional spectrum or use our
    bandwidth efficiently to accommodate subscriber growth and
    subscriber usage.
      We may
    have to make further financing arrangements to meet our capital
    expenditure requirements and debt payment
    obligations.
   12




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##### 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 results of operations, financial position
    and cash flows.
       13




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##### Table of Contents



Our
    businesses are subject to extensive Government regulation and
    any change in Government policy relating to the
    telecommunications industry could have a material adverse effect
    on our results of operations, financial condition and cash
    flows.
           14




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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.
     15




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##### 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.
    Korea
    is our most important market, and our current business and
    future growth could be materially and adversely affected if
    economic conditions in Korea deteriorate.
      
    continuing difficulties in the housing and financial sectors in
    the United States and elsewhere and the resulting adverse
    effects on the global financial markets;
    adverse changes or volatility in foreign currency reserve
    levels, commodity prices (including oil prices), exchange rates
    (including fluctuation of the U.S. dollar or Japanese yen
    exchange rates or revaluation of the Chinese renminbi), interest
    rates and stock markets;
    substantial decreases in the market prices of Korean real estate;
    increasing delinquencies and credit defaults by consumer and
    small and medium sized enterprise borrowers;
    declines in consumer confidence and a slowdown in consumer
    spending;
    adverse developments in the economies of countries that are
    important export markets for Korea, such as the United States,
    Japan and China, or in emerging market economies in Asia or
    elsewhere;
    the continued emergence of the Chinese economy, to the extent
    its benefits (such as increased exports to China) are outweighed
    by its costs (such as competition in export markets or for
    foreign investment and the relocation of the manufacturing base
    from Korea to China);
    social and labor unrest;
    a 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
    that, together, would lead to an increased government budget
    deficit;
    financial problems or lack of progress in the restructuring of
    Korean conglomerates, other large troubled companies, their
    suppliers or the financial sector; 16




---



##### Table of Contents




    loss of investor confidence arising from corporate accounting
    irregularities and corporate governance issues at certain Korean
    conglomerates;
    the economic impact of any pending or future free trade
    agreements, including the Free Trade Agreement recently
    negotiated with the United States;
    geo-political uncertainty and risk of further attacks by
    terrorist groups around the world;
    the recurrence of severe acute respiratory syndrome, or SARS, or
    an outbreak of avian flu in Asia and other parts of the world;
    deterioration in economic or diplomatic relations between Korea
    and its trading partners or allies, including deterioration
    resulting from trade disputes or disagreements in foreign policy;
    political uncertainty or increasing strife among or within
    political parties in Korea;
    hostilities involving oil producing countries in the Middle East
    and any material disruption in the supply of oil or increase in
    the price of oil; and
    an increase in the level of tension or an outbreak of
    hostilities between North Korea and Korea or the
    United States.  Disruptions
    in global credit and financial markets and the resulting
    governmental actions around the world could have a material
    adverse impact on our business and the ability to meet our
    funding needs, and could cause the market value of the common
    shares and ADSs to decline.
     17




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##### Table of Contents



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 the common shares
    and ADSs.
      
    an increase in the amount of Won required by us to make interest
    and principal payments on our foreign currency-denominated debt,
    which accounted for approximately 23% of our total consolidated
    long-term debt, including current portion, as of
    December 31, 2008; 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.    
    the amounts a registered holder or beneficial owner of ADSs will
    receive from the 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 the common shares; and
    the secondary market price of the ADSs.  Increased
    tensions with North Korea could have an adverse effect on us and
    the market value of the common shares and ADSs.
     18




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##### Table of Contents



If SK
    Holdings causes us to breach the foreign ownership limitations
    on shares of our common stock, we may experience a change of
    control.
      
    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% of the average of our annual revenue for the preceding
    three fiscal years.   19




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##### Table of Contents



If our
    convertible notes are converted by foreign holders and the
    conversion would cause a violation of the foreign ownership
    restrictions of the Telecommunications Business Act, or in
    certain other circumstances, we may sell common stock in order
    to settle the converting holders conversion rights in cash
    in lieu of delivering common stock or ADSs to them, and these
    sales might adversely affect the market price of our common
    stock or ADSs.
    Sales
    of our shares by SK Holdings, POSCO and/or other large
    shareholders may adversely affect the market value of the common
    shares and ADSs.
      Koreas
    legislation allowing class action suits related to securities
    transactions may expose us to additional litigation
    risk.
    If an
    investor surrenders his ADSs to withdraw the underlying shares,
    he may not be allowed to deposit the shares again to obtain
    ADSs.
   20




---



##### Table of Contents



An
    investor in our ADSs may not be able to exercise preemptive
    rights for additional shares and may suffer dilution of his
    equity interest in us.
    
    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.    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.
   21




---



##### Table of Contents



We are
    generally subject to Korean corporate governance and disclosure
    standards, which may differ from those in other
    countries.
    Item 4.
    INFORMATION
    ON THE COMPANY  Item 4.A.
    History
    and Development of the Company        video-on-demand
   22




---



##### Table of Contents



100-999, 82-2-6100-2114.
  Korean
    Telecommunications Industry
           23




---



##### Table of Contents



As of December 31,2004


2005


2006


2007


2008(In thousands, except for per population amounts)Population of Korea(1)


48,082



48,294



48,297



48,456



48,607Wireless Subscribers(2)


36,586



38,342



40,197



43,498



45,607Wireless Subscribers per 100 Population


76.1



79.4



83.2



89.8



93.8Telephone Lines in Service(2)


22,871



22,920



23,119



23,130



22,132Telephone Lines per 100 Population


47.6



47.5



47.9



47.7



45.5    (1)
    
    Source: National Statistical Office of Korea.(2)
    
    Source: KCC.      As of December 31,2004


2005


2006


2007


2008(In thousands)Number of Wireless Internet Enabled Handsets


35,017



37,202



38,894



41,598



42,740Total Number of Wireless Subscribers


36,586



38,342



40,197



43,498



45,607Penetration of Wireless Internet Enabled Handsets


95.7
%


97.0
%


96.8
%


95.6
%


93.7
%        As of December 31,2004


2005


2006


2007


2008(In thousands)Number of Internet Users(1)


31,580



33,010



34,120



34,820



35,360Number of Broadband Subscribers(2)


11,921



12,191



14,043



14,709



15,475  24




---



##### Table of Contents



(1)
    
    Source: NIDA.(2)
    
    Source: KCC. Includes subscribers accessing Internet service
    using digital subscriber line, or xDSL, connections; cable modem
    connections; local area network, or LAN, connections; and
    satellite connections.  Item 4.B.
    Business
    Overview  Overview
      
    Cellular voice services.  We provide wireless
    voice transmission services to our subscribers through our
    backbone cellular networks and also offer wireless global
    roaming services through service agreements with various foreign
    wireless telecommunications service providers. (Accordingly,
    while cellular voice services principally refer to
    our core wireless voice transmission services, they also
    comprise our wireless voice and data global roaming services.)
    Wireless data services.  We also provide
    wireless data transmission services, including wireless Internet
    access services, which allow subscribers to access a wide range
    of online digital contents and services, as well as to send and
    receive text and multimedia messages, using their mobile phones.
    Broadband Internet and fixed-line telephone
    services.  Through our consolidated subsidiary, SK
    Broadband, we provide broadband Internet access service and
    other Internet-related services, including
    video-on-demand
    and IP TV services. Through SK Broadband, we also provide local,
    domestic long-distance and international long-distance
    fixed-line telephone services to residential and commercial
    subscribers. We currently own a 43.4% equity interest in SK
    Broadband following our acquisition of a 38.7% equity stake in
    the company in March 2008.
    Digital convergence and new businesses.  We
    have pioneered new services that reflect the growing convergence
    within the telecommunications sector, as well as between the
    telecommunications sector and other industries, including
    satellite digital media broadcasting, or satellite DMB, service,
    which enables satellite broadcasting to mobile devices and
    Telematics service, which makes use of global
    positioning system, or GPS, technology.      Our
    Business Strategy
      
    Enhance the technical capabilities of our wireless networks
    to improve data transmission rates and service quality and to
    enable us to offer an increased range of services, including in
    connection with our 25




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##### Table of Contents



development of new and advanced wireless
    technologies.  We believe we have the most
    extensive and advanced wireless telecommunications network in
    Korea and we are committed to ensuring that our delivery
    platforms keep pace with the latest technological advancements.
    In March 2007, we completed the nationwide build-out of our
    HSDPA-capable WCDMA network. We are currently further upgrading
    our WCDMA network to support HSUPA technology and expanding the
    coverage area of our WiBro service. We plan to continue
    upgrading and expanding our backbone network infrastructure in
    line with new developments in wireless telecommunications
    technology. We believe that ensuring the quality and technical
    sophistication of our wireless networks will, among other
    things, allow us to provide our subscribers with top-quality
    service, enable us to more quickly introduce the latest wireless
    telecommunications products and services and allow us to
    efficiently implement new wireless technologies as market
    opportunities arise.  
    Offer a broad range of new and innovative wireless data
    contents and services.  We plan to improve the
    service quality and expand the range of our wireless data
    contents and services, principally through our integrated
    wireless and fixed-line Internet portal, NATE, with a view to
    increasing revenues from these services to complement our core
    cellular revenues. In particular, we believe demand for wireless
    access to entertainment-related digital contents and services,
    wireless access to community and social networking platforms and
    wireless access to financial-related contents and services, or
    m-commerce services, will continue to grow. We
    continue to actively seek partnerships with, as well as
    strategic investments in, digital media content providers,
    financial services providers and wireless application developers
    to improve the breadth and quality of the wireless data contents
    and services we offer to our subscribers.
    Leverage our extensive network infrastructure, technical
    know-how and leading market position to exploit opportunities
    that arise from an increasingly convergent era in
    telecommunications and to pioneer new
    businesses.  We believe that increasing
    convergence among communications technologies, as well as
    between the telecommunications sector and other industries,
    creates growth opportunities for incumbent telecommunications
    service providers, like us, whose existing infrastructure,
    know-how and extensive subscriber base provide a competitive
    advantage. We further believe that digital convergence will
    support demand for increasingly integrated products and
    services. In March 2008, we completed the acquisition of an
    additional 38.7% equity stake in SK Broadband, Koreas
    second-largest fixed-line operator, for approximately Won 1.1
    trillion, increasing our total equity interest in SK Broadband
    to 43.4%. We hope to benefit from a range of synergies from this
    acquisition, including by offering our customers bundled
    fixed-line and wireless services and by creating greater
    convergence opportunities across our various media platforms. We
    also plan to continue to improve our existing convergence
    services, such as Telematics and the satellite DMB service
    operated by our subsidiary, TU Media Corp., or TU Media.
    Continue global expansion by seeking opportunities in
    overseas markets.We continue to seek
    opportunities to expand into various overseas markets. In light
    of the highly penetrated Korean wireless market, we believe that
    strategic expansion into overseas markets offers important
    opportunities for future growth. We plan to leverage our
    homegrown technical expertise and operational know-how to gain
    entry into foreign markets  particularly those with
    less mature
    and/or
    rapidly growing wireless telecommunications sectors. To this
    end, we have made selective majority and minority investments in
    mobile telecommunications companies operating in key foreign
    markets and formed strategic alliances with many leading
    international telecommunications service providers. We have also
    actively participated in regional and international cooperative
    organizations to reinforce our global competencies and keep pace
    with advancements in overseas telecommunications markets. In
    addition, we believe that our continued expansion into
    international markets will better position us to ensure that our
    network technologies and wireless applications remain compatible
    with emerging global standards. We believe this will provide us
    with a competitive advantage as the wireless telecommunications
    paradigm moves toward increasingly interconnected regional
    networks responsive to growing consumer demands for seamless
    universal access to wireless products and services. 26




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##### Table of Contents



Our
    Services
            Cellular
    Voice Services
      T-Roaming Services.
 27




---



##### Table of Contents



Wireless
    Data Services (including Wireless Internet
    Services)
    SMS and MMS Services.
  Wireless Internet Services.
  
    Wireless Entertainment and Community
    Services:  We offer our subscribers a wide
    range of wireless entertainment-related contents and services,
    primarily through content-specific portal sites that we operate,
    including:  
    MelOn, a music portal operated by our consolidated
    subsidiary, Loen Entertainment, Inc., that provides wireless
    access to a wide range of digital music contents. To aggregate
    and manage our digital music contents offerings, we also operate
    an integrated wireless and fixed-line MelOn website, which
    subscribers can access using wireless devices, such as their
    mobile phones and MP3 players, as well as fixed-line devices,
    such as personal computers. As of December 31, 2008, we had
    approximately 11.5 million subscribers to our MelOn service;
    Gaming Services,we offer subscribers various mobile
    gaming options through our NATE portal. For example, we offer a
    variety of multi-player, interactive mobile games, as well as
    anime-based mobile games. In addition, we also offer 3D mobile
    games that subscribers can download to mobile phones and other
    wireless devices equipped with a mobile gaming-specific chip; 28




---



##### Table of Contents




    Cizle, a movie portal, which provides subscribers access
    to a broad range of movie-related contents. As with our MelOn
    service, we operate an integrated wireless and fixed-line Cizle
    website, which subscribers can access using both wireless and
    fixed-line devices. Subscribers can also purchase movie tickets,
    learn theater schedules and purchase
    video-on-demand
    contents through our Cizle portal; and
    Mobile Cyworld, a wireless web community portal site,
    which is a mobile version of the Cyworld community site operated
    by our subsidiary, SK Communications. For a more detailed
    description of the fixed-line Cyworld portal, see
     Other Products and Services  Other
    Portal Services  Community Portal Service.    
    Wireless Financial Services:  We also
    offer our subscribers a range of wireless finance-related
    contents and m-commerce services. Our wireless financial
    businesses include:  
    Moneta, a financial portal that allows subscribers to use
    their mobile phones to access an array of financial contents and
    services relating to securities trading, insurance, real estate
    and personal asset management;
    T-cash, a mobile payment technology that allows
    subscribers to use their mobile phones to pay for public
    transportation fares in lieu of cash payment or pre-paid
    transportation cards and to make payments at certain affiliated
    stores. T-cash requires a WCDMA-capable handset with a built-in
    universal subscriber identity module, or USIM, card;
    M-Banking, a banking portal, which provides access to
    certain electronic banking services operated by participating
    commercial banks, and, accordingly, enables subscribers to
    perform certain banking transactions, such as account inquiries,
    wire transfers and credit card payments, through their mobile
    phones;
    11th Street,

    an online shopping mall that links wired and wireless shopping
    services; and
    Gifticon, a service that allows users to pay for and give
    gifts using their mobile phone. Payments are settled wirelessly
    and recipients are notified of their gifts by instant messaging
    or via our NATE data service.  
    Wireless News and Search
    Services:We offer our subscribers a
    range of wireless news and search services, including access to
    domestic and international news content, dictionary resources
    and real-time weather information. Subscribers can also search
    for and purchase books, DVDs, CDs and lottery tickets, as well
    as download discount coupons for use at offline stores.  Broadband
    Internet and Fixed-line Telephone Services
  video-on-demand
  video-on-demand
 29




---



##### Table of Contents



video-on-demand
    Digital
    Convergence and New Businesses
        Satellite DMB Business.
  pay-per-view
    Telematics Service. T-Map Navigation
 30




---



##### Table of Contents



Global
    Business
      United States.
        China. CDMA-based
 31




---



##### Table of Contents



U-Land Chinese-language
  TD-SCDMA
  E-eye E-eye
    Vietnam.
    Mongolia.
  Regional and International Strategic
    Alliances.
 32




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##### Table of Contents



T-Mobile
  Provision of Wireless Internet Platforms and Cellular Network
    Solutions to Foreign Cellular Network
    Operators.
  Other
    Products and Services
  International Calling Services.
  Other
    Portal Services.
  
    Fixed-line NATE portal service.  Our
    subsidiary, SK Communications, offers a fixed-line portal
    service under our NATE brand name and at the website
    www.NATE.com. NATE.com includes information and content
    formerly offered under our Netsgo brand as well as the content
    and services formerly available on Lycos Korea, which our
    subsidiary, SK Communications Co., Ltd., acquired in 2002.
    NATE.com offers a wide variety of content and services,
    including an Internet search engine, as well as access to free
    e-mail
    accounts. SK Communications also operates NATE-ON, an instant
    messaging service available to NATE users. NATE-ON allows users
    to chat online using a variety of wireless, as well as wired,
    devices, such as mobile phones, personal digital assistants and
    portable computers.
    Community Portal
    Service.  Cyworld, also operated
    by SK Communications, is one of the most popular online
    community portal services in Korea. Cyworld is a social
    networking site that encompasses an ever-expanding virtual forum
    where users can meet to exchange information and ideas and share
    multimedia contents, including through the publication of
    personal homepages and blog sites. We have also sought to expand
    our global reach by launching Cyworld service in overseas
    markets, including the United States, Japan, China and Taiwan.
    While retaining many aspects of the original Korean version that
    make Cyworld unique among social networking sites, we have
    redesigned foreign versions of Cyworld to make it more appealing
    to local audiences. As of December 31, 2008, our Cyworld
    portal service had over 24 million registered users
    globally.     33




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##### Table of Contents



Revenues,
    Rates and Facility Deposits
    As of or for the Year Ended December 31,2006


2007


2008(In billions of Won)Initial Subscription Fees

W
252.4


W
387.8


W
400.2Monthly Fees


3,629.5



3,949.8



4,348.0Usage Charges(1)


5,565.9



5,598.4



5,473.0Interconnection Revenue


1,033.4



1,062.2



1,149.2Revenue from Sales of Digital Handsets










Other Cellular Revenue(2)


34.4



17.9



19.4Total

W
10,515.6


W
11,016.1


W
11,389.8Additional Facility Deposits

W
9.0


W
2.4


W
2.7Refunded Facility Deposits


11.7



17.1



4.3Facility Deposits at Period End


21.1



6.4



4.8     (1)
    
    Usage charges principally include revenues from monthly
    plan-based fees, usage charges for outgoing voice calls, usage
    charges for wireless data services, value-added-service fees, as
    well as international charges and interest on overdue subscriber
    accounts (net of telephone tax).(2)
    
    Other cellular revenue includes revenue from the sale and
    licensing of Internet platform solutions.  and/or
      
    Data Plans, which target subscribers with high usage
    patterns for wireless data transmission and wireless Internet
    services. We offer various Data Plans that provide unlimited
    wireless data services for monthly fees ranging from Won 3,500
    to Won 41,500. We also offer a Data Plan that allows subscribers
    to use up to Won 100,000 of wireless Internet services each
    month for a fixed monthly fee of Won 10,000.
    Videoconferencing Plans, for subscribers to our 3G
    services, which we provide primarily using our WCDMA network.
    The basic monthly fee for our Videoconferencing Plans ranges
    between Won 3,500 and Won 9,000.   34




---



##### Table of Contents



Subscribers
    
    our expansion and technical enhancement of our digital networks,
    including with high-speed data capabilities;
    increasing consumer awareness of the benefits of wireless
    telecommunications; 35




---



##### Table of Contents




    an effective marketing strategy;
    our focus on customer service;
    the introduction of new, value-added services, such as voicemail
    services, call-forwarding, Caller ID, three-way calling and
    wireless Internet services provided by NATE; and
    our acquisition of Shinsegi in January 2002.    As of or for the Year Ended December 31,2006


2007


2008Subscribers


20,271,133



21,968,169



23,032,045Subscribers Growth Rate


3.8
%


8.4
%


4.8
%Activations


5,573,799



8,344,784



8,493,340Deactivations


4,832,783



6,647,748



7,429,464Average Monthly Churn Rate(1)


2.0
%


2.6
%


2.7
%     (1)
    
    Average monthly churn rate for a period is the number calculated
    by dividing the sum of deactivations during the period by the
    simple average of the number of subscribers at the beginning and
    end of the period and dividing the quotient by the number of
    months in the period. Churn includes subscribers who upgrade to
    CDMA 1xRTT or CDMA lxEV-DO-capable handsets by terminating their
    service and opening a new subscriber account.    Market
    Share Limitations
    Number
    Portability
   36




---



##### Table of Contents



Marketing
    and Service Distribution
  Marketing,
    Sales and Service Network
         37




---



##### Table of Contents



Marketing
    Strategies and Marketing Information Management
  Next Generation Marketing Project.
  www.tworld.co.kr
  T-brand Marketing Strategy.
  Interconnection
      Domestic
    Calls
    Wireless-to-Fixed-line.
 38




---



##### Table of Contents



Fixed-line-to-Wireless.
    Rate per MinuteApplicable Year

SK Telecom


KTF


LGT2005

W
31.19


W
46.70


W
54.982006


33.13



40.06



47.012007


32.78



39.60



45.132008


33.41



38.71



39.092009


32.93



37.96



38.53   Wireless-to-Wireless.
    International
    Calls
    International
    Roaming Arrangements
    Digital
    Cellular Network
   39




---



##### Table of Contents



CDMA
    Networks
      CDMA
    1xRTT and CDMA 1x EV-DO Networks
      WCDMA
    Network
  HSDPA-upgraded
   40




---



##### Table of Contents



WiBro
    Network
    infrastructure
    
    Cell sites, 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 Corporation or LGT subscriber
    (for which transmissions would be routed to KT
    Corporations or LGT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 (for which transmissions may be
    routed through our NATE portal); and
    Transmission lines, which link cell sites to switching
    stations and switching stations with other switching stations.       41




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##### Table of Contents



Other
    Investments and Relationships
    Wireless
    Content Providers and Application Providers
    Digital Content Providers.
      Wireless Application Developers.
  Other
    Investments
    
    POSCO.  We currently own a 2.8% interest in the
    outstanding capital stock of POSCO, with a book value as of
    December 31, 2008 of Won 943 billion. POSCO is the
    largest fully integrated steel producer in Korea, and one of the
    largest steel producers in the world.
    SK C&C.  We currently own a 30.0% equity
    interest in SK C&C, with a book value as of
    December 31, 2008 of Won 677 billion. SK C&C is
    an information technologies services provider. We are party to
    several service contracts with SK C&C related to
    development and maintenance of our information technologies
    systems. See Item 7.B. Related Party
    Transactions. We intend to dispose of our entire equity
    interest in 42




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##### Table of Contents



SK C&C in the initial public offering of SK
    C&Cs common shares on the Korea Exchange, which is
    currently on hold. We can provide no assurance that the initial
    public offering will be consummated on a timely basis or at all.  
    SKY Property Management.  We currently own a
    60.0% equity interest in SKY Property Management Ltd., with a
    book value as of December 31, 2008 of Won 287 billion.
    SKY Property Management was established in 2008 to manage
    buildings and real estate developments in China, in which
    affiliated companies of the SK Group had invested or will
    invest.
    SK Marketing & Company.  We currently
    own a 50.0% equity interest in SK Marketing & Company
    Co., Ltd., with a book value as of December 31, 2008 of Won
    97 billion. SK Marketing & Company Co., Ltd.
    provides marketing-related services to corporate and individual
    clients.
    LG Powercomm.  We currently own a 4.6% interest
    in LG Powercomm Co., Ltd. (formerly Powercomm Corporation), with
    a book value as of December 31, 2008 of Won
    39 billion. LG Powercomm Co., Ltd. is an operator of
    fixed-line networks that provides wholesale fixed-line network
    services, such as leased lines, to telecommunications, Internet
    and cable television service providers in Korea.    Competition
             43




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##### Table of Contents



Law and
    Regulation
  Overview
    
    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;
    customer complaints;
    interconnection and revenue-sharing between telecommunications
    service providers;
    disputes between telecommunications service providers;
    research and development budgeting and objectives of
    telecommunications service providers; and
    competition among telecommunications service providers.           44




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##### Table of Contents



Competition
    Regulation
        
    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.
    Public notice of board resolution on large-scale transactions
    with specially related persons.If a member of
    the SK Group engages in a transaction with a specially related
    person in the amount of 10% or more of the members capital
    or for Won 10 billion or more, the transaction must be
    approved by a resolution of the members board of directors
    and the member must publicly disclose the transaction.
    Restrictions on equity investments in other domestic
    companies.Under the Fair Trade Act, a company
    that is a member of a large business group as designated by the
    FTC is generally required to limit its total investments in
    other domestic companies to 40% of its non-consolidated net
    assets. Depending on the time frame in which such a company
    acquired shares in excess of the 40% ceiling, the FTC may issue
    corrective orders requiring, for example, the disposition of the
    shares held in excess of the 40% ceiling or imposing limitations
    on the voting rights for such shares
    and/or
    monetary sanctions. We were subject to such restrictions on
    equity investments in other domestic companies until
    July 3, 2007, when the company formerly known as
    SK Corporation underwent a corporate rehabilitation,
    pursuant to which SK Corporation spun off substantially all of
    its operating business divisions into a newly established
    corporation named SK Energy Co., Ltd. and the surviving
    company, renamed SK Holdings Co., Ltd., became a holding company
    under the Fair Trade Act. As a holding company under the Fair
    Trade Act, SK Holdings and its subsidiaries (including us), as
    well as any subsidiaries of SK Holdings subsidiaries
    (sub-subsidiaries), are exempted from the Fair Trade
    Acts restrictions on equity investments in other domestic
    companies. However, SK Group member companies that are not
    subsidiaries (or sub-subsidiaries) of SK Holdings remain subject
    to such restrictions on equity investments in other domestic
    companies. In March 2009, an amendment to the Fair Trade Act
    abolished such restrictions on total investments in other
    domestic companies.
    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, sub-subsidiaries of holding companies 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 45




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##### Table of Contents



SK Holdings 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 Holdings invests in its own subsidiary.  
    Public notice of the current status of a business
    group.Pursuant to a recent amendment to the
    Enforcement Decree of the Fair Trade Act which became effective
    in June 2009, 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 in the SK Group and
    information on transactions with certain related persons on a
    quarterly basis.  Number Portability.
      Prohibitions on Handset Subsidies.
  
    a telecommunications service provider could provide subsidies to
    subscribers who had maintained their subscription with the same
    telecommunications service provider for at least 18 months,
    provided that no separate subsidy was provided to the
    same subscriber for two years thereafter; or
    a telecommunications service provider that had provided a
    particular telecommunications service for less than six years
    could provide subsidies to subscribers of such service.   46




---



##### Table of Contents



Rate Regulation.
    Interconnection.
  Frequency Allocation.
    Mandatory
    Contributions and Obligations
  Contributions to the Fund for Development of Information
    Telecommunications.
 47




---



##### Table of Contents



Universal Service Obligation.
    Foreign
    Ownership and Investment Restrictions and
    Requirements
       48




---



##### Table of Contents




    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% of the average of our annual revenue for the preceding
    three fiscal years.        
    the acquisition by an entity (and its related parties) of 15% or
    more of the equity of a network services provider;
    a change in the largest shareholder of a network services
    provider;
    agreements by a network service provider or its shareholders
    with foreign governments or parties regarding important business
    matters of such network services provider, such as the
    appointment of officers and directors and transfer of
    businesses; and
    a change in the shareholder that actually controls a network
    services provider.    Patents
    and Licensed Technology
   49




---



##### Table of Contents



Organizational
    Structure
    Significant
    Subsidiaries
    Item 4.C.
    Organizational
    Structure    Item 4.D.
    Property,
    Plants And Equipment    Approximate Area inLocation

Primary Use

Square FeetSeoul Metropolitan Area

Corporate Headquarters


988,455Regional Headquarters


1,095,992Customer Service Centers


384,223Training Centers


397,574Central Research and Development Center


482,725Others


639,791Busan

Regional Headquarters


363,272Others


237,057Daegu

Regional Headquarters


153,578Others


317,440Cholla and Jeju Provinces

Regional Headquarters


265,595Others


359,784Choongchung Province

Regional Headquarters


459,240Others


480,555    50




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##### Table of Contents



Item 4A.
    UNRESOLVED
    STAFF COMMENTS    Item 5.
    OPERATING
    AND FINANCIAL REVIEW AND PROSPECTS    Item 5.A.
    Operating
    Results  Overview
      Market Share Limitations.
  Number Portability and Common Prefix Identification
    System.
 51




---



##### Table of Contents



Handset Subsidies.
  Changes in Tariffs and Interconnection
    Fees.
    Average Monthly Outgoing Voice Minutes and Revenue per
    Subscriber.
  Year Ended December 31,2006


2007


2008Outgoing voice minutes (in thousands)(1)


47,980,107



51,295,166



54,080,231Average monthly outgoing voice minutes per subscriber(2)


201



201



200Average monthly revenue per subscriber, excluding
    interconnection revenue(3)

W
40,220


W
40,154


W
38,526Average monthly revenue per subscriber, including
    interconnection revenue(4)

W
44,599


W
44,416


W
43,016  52




---



##### Table of Contents



(1)
    
    Does not include minutes of incoming calls or minutes of use
    relating to the use of SMS, MMS and other wireless data services.(2)
    
    The average monthly outgoing voice minutes per subscriber is
    derived by dividing the total minutes of outgoing voice usage
    for the period by the monthly average number of subscribers for
    the period, then dividing that number by the number of months in
    the period. The monthly average number of subscribers is derived
    by dividing (i) the sum of the average number of
    subscribers for each month in the period, calculated as the
    average of the number of subscribers on the first and last days
    of the relevant month, by (ii) the number of months in the
    period.(3)
    
    The average monthly revenue per subscriber, excluding
    interconnection revenue, is derived by dividing the sum of total
    initial subscription fees, monthly plan-based fees, usage
    charges for outgoing voice calls, usage charges for wireless
    data services, value-added service fees and other miscellaneous
    revenues for the period by the monthly average number of
    subscribers for the period, then dividing that number by the
    number of months in the period.(4)
    
    The average monthly revenue per subscriber, including
    interconnection revenue, is derived by dividing the sum of total
    initial subscription fees, monthly plan-based fees, usage
    charges for outgoing voice and wireless data transmissions,
    charges for purchases of digital contents, value-added service
    fees, other miscellaneous revenues and interconnection revenue
    for the period by the monthly average number of subscribers for
    the period, then dividing that number by the number of months in
    the period.      Acquisition of SK Broadband. video-on-demand
  Operating Expenses and Operating Margins.
 53




---



##### Table of Contents



Reclassification
    of Prior Year Financial Statements
      Operating
    Results
    For the Year Ended December 31,2006


2007


2008(In billions of Won, except percentage data)Operating Revenue

W
11,028.0



100.0
%

W
11,863.4



100.0
%

W
14,021.0



100.0
%Operating Expenses


8,406.9



76.2



9,761.4



82.3



12,268.5



87.5Operating Income


2,621.1



23.8



2,102.0



17.7



1,752.5



12.5Other Income


284.9



2.6



861.9



7.3



1,057.0



7.5Other Expenses


884.4



8.0



678.1



5.7



1,550.8



11.1Income Before Income Taxes and Minority Interest


2,021.6



18.3



2,285.8



19.3



1,258.7



9.0Income Taxes


572.0



5.2



694.5



5.9



298.9



2.1Preacquisition Net Loss of Subsidiaries










21.1



0.2



32.7



0.2Loss from Discontinued Operation(1)










(50.1
)


(0.4
)


(20.2
)


(0.1
)Net Income Attributable to:Majority Interest


1,451.5



13.2



1,648.9



13.9



1,215.7



8.7Minority Interests


(1.9
)


(0.0
)


(86.6
)


(0.7
)


(243.4
)


(1.7
)Net Income

W
1,449.6



13.1
%

W
1,562.3



13.2
%

W
972.3



6.9
%Depreciation and Amortization(2)

W
1,553.6



14.1
%

W
1,822.0



15.4
%

W
2,599.8



18.5
%     (1)
    
    Relates to results of operations of HELIO, which have been
    classified as discontinued operations after our sale of HELIO to
    Virgin Mobile USA, Inc. in August 2008.(2)
    
    Excludes the depreciation and amortization allocated to internal
    research and development costs and manufacturing costs of Won
    144.8 billion, Won 149.3 billion and Won
    159.5 billion for the years ended December 31, 2006,
    2007 and 2008, respectively. 54




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##### Table of Contents



Year Ended December 31,2006


2007


2008Percentage





Percentage





Percentageof Total





of Total





of TotalRevenue


Revenue


Revenue


Revenue


Revenue


Revenue(In billions of Won, except percentages)Cellular Revenue:Wireless Services(1)

W
9,482.2



86.0
%

W
9,953.9



83.9
%

W
10,240.6



73.0
%Interconnection


1,033.4



9.4



1,062.2



9.0



1,149.2



8.2Total Cellular Revenue


10,515.6



95.4



11,016.1



92.9



11,389.8



81.2Broadband Internet and Fixed-line Telephone Service


















1,821.8



13.0Other Revenue:International Calling Service(2)


176.4



1.6



211.8



1.8



243.1



1.7Portal Service(3)


165.6



1.5



178.7



1.5



216.4



1.5Miscellaneous(4)


170.4



1.5



456.8



3.9



349.9



2.5Total Other Revenue


512.4



4.6



847.3



7.1



809.4



5.8Total Operating Revenue

W
11,028.0



100.0
%

W
11,863.4



100.0
%

W
14,021.0



100.0
%Total Operating Revenue Growth


2.9
%






7.6
%






18.2
%     (1)
    
    Wireless services revenue includes initial subscription fees,
    monthly plan-based fees, usage charges for outgoing voice calls,
    usage charges for wireless data services, value-added-service
    fees and other miscellaneous cellular revenues, including
    international interconnection charges, interest on overdue
    subscriber accounts (net of telephone tax) and revenue from the
    sale and licensing of Internet platform solutions.(2)
    
    Provided by SK Telink Co. See Business  Our
    Services  Other Products and Services 
    International Calling Services.(3)
    
    Portal service revenue attributable to our subsidiaries
    (including SK Communications, Paxnet Co., Ltd., which operates a
    financial portal site, and
    U-Land
    Company Limited, the Hong Kong-incorporated holding company
    through which we hold our interest in ViaTech).(4)
    
    Miscellaneous revenue attributable to our subsidiaries
    (including Commerce Planet Co., Ltd., which operates neotam.com,
    an online outlet shopping mall, Morning365.com, an online
    bookstore, and cherrya.com, an online cosmetics store; and TU
    Media).  2008
    Compared to 2007
  Operating Revenue.
     55




---



##### Table of Contents



Operating Expenses.
        Operating Income.
  Other Income.
 56




---



##### Table of Contents



Other Expenses.
  Income Tax.
  Net Income.
  2007
    Compared to 2006
  Operating Revenue.
     57




---



##### Table of Contents



Operating Expenses.
          Operating Income.
  Other Income.
 58




---



##### Table of Contents



Other Expenses.
  Income Tax.
  Net Income. pre-acquisition
  Item 5.B.
    Liquidity
    and Capital Resources  Capital
    Resources
  Liquidity
       59




---



##### Table of Contents



Year Ended December 31,


Change2006


2007


2008


2006 to 2007


2007 to 2008(In billions of Won, except percentages)Net Cash Flow from Operating Activities

W
3,589.8


W
3,721.7


W
3,296.9


W
131.9



3.7
%

W
(424.8
)


(11.4
)%Net Cash Used in Investing Activities


(2,535.1
)


(2,414.9
)


(3,875.4
)


120.3



(4.7
)


(1,460.5
)


60.5Net Cash Provided by (Used in) Financing Activities


(952.4
)


(1,041.3
)


869.4



(88.9
)


9.3



1,910.7



N/AEffect of Exchange Rate Changes on Cash and Cash Equivalents
    Held in Foreign Currencies


(9.3
)


6.1



37.4



15.4



N/A



31.3



512.9Net Cash Flow due to Changes in Consolidated Subsidiaries


14.6



102.1



36.4



87.5



600.7



(65.7
)


(64.3
)Preacquisition Cash Flows of Subsidiaries(1)

W



W
(11.4
)

W
17.3



(11.4
)


N/A


W
28.6



N/ANet Increase in Cash and Cash Equivalents due to Merger(2)






50.4







50.4



N/A



(50.4
)


(100.0
)Cash Flows from Discontinued Operation(3)






(12.8
)


(256.5
)


(12.8
)


N/A



(243.7
)


1,907.6Net Increase (Decrease) in Cash and Cash Equivalents

W
107.6


W
400.0


W
125.5


W
292.4



271.7


W
(274.5
)


(68.6
)Cash and Cash Equivalents at Beginning of Period


378.4



486.0



886.0



107.6



28.4



400.0



82.3Cash and Cash Equivalents at End of Period

W
486.0


W
886.0


W
1,011.5


W
400.0



82.3
%

W
125.5



14.2
%       (1)
    
    In 2007, we adopted SKAS No. 25. Pursuant to SKAS
    No. 25, when a subsidiary is acquired during the year, such
    subsidiarys statement of income is included in
    consolidation as if it had been acquired at the beginning of the
    year, and pre-acquisition earnings (losses) are presented as
    deduction (addition) at the bottom of the consolidated
    statements of income. In addition, in connection with our
    adoption of SKAS No. 25, we have also begun to present
    pre-acquisition cash flows of subsidiaries as a separate
    deduction (addition) at the bottom of our consolidated
    statements of cash flows.(2)
    
    Net increase in cash and cash equivalents due to merger for the
    year ended December 31, 2007 relates to the merger of Empas
    into SK Communications in November 2007.(3)
    
    Relates to cash flow activities of HELIO, which have been
    classified as discontinued operations after our sale of HELIO to
    Virgin Mobile USA, Inc. in August 2008.  Net Cash Flow from Operating Activities.
  Net Cash from Investing Activities.
 60




---



##### Table of Contents



Net Cash from Financing Activities.
       61




---



##### Table of Contents



91-day
      3-month 3-month
   62




---



##### Table of Contents



Capital
    Requirements
      Capital Expenditures.
  Year Ended December 31,2006


2007


2008(In billions of Won)CDMA Networks(1)

W
280


W
198


W
148WCDMA Network


781



1,044



905WiBro(2)


53



154



405Others(3)


384



408



779Total(4)

W
1,498


W
1,804


W
2,237     (1)
    
    Includes our basic CDMA, CDMA 1xRTT and CMDA EV-DO networks.(2)
    
    We commenced WiBro service in May 2006.(3)
    
    Includes investments in infrastructure consisting of equipment
    necessary for the provision of data services and marketing.(4)
    
    Also, see note 7 of the notes to our consolidated financial
    statements.   63




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##### Table of Contents



Repayment of Outstanding Debt.
  Year Ending December 31,

Total(In billions of Won)2009

W
796.82010


727.42011


1,674.4After 2011


2,743.9     Investments in New Businesses and Global Expansion and Other
    Needs.
     64




---



##### Table of Contents



Acquisition of Treasury Shares.
        Financing of Installment Payment Plans.
  Severance Payments.
   65




---



##### Table of Contents



Dividends.
    Contractual
    Obligations and Commitments
    Payments Due by Period(1)Less Than








AfterTotal


1 Year


1-3 Years


4-5 Years


5 Years(In billions of Won)BondsPrincipal

W
4,876.1


W
737.7


W
1,554.9


W
1,280.5


W
1,303.0Interest


1,413.3



257.9



393.2



211.2



551.0Long-term borrowingsPrincipal


865.5



9.0



723.5



133.0Interest


104.8



39.4



60.5



4.9



Capital lease obligationsPrincipal


201.1



61.8



111.9



27.4



Interest


25.7



13.0



8.4



3.6



0.7Operating leases


2.0



0.7



0.9



0.4



Facility deposits


13.1



8.3











4.8Derivatives


247.8



190.4



57.4







Credit commitment to Virgin Mobile USA, Inc.


21.2



21.2











Other long-term payables(2)Principal


450.0



130.0



320.0







Interest


42.6



20.4



22.2







Short-term borrowings


627.7



627.7











Total contractual cash obligations(3)

W
8,890.9


W
2,117.5


W
3,252.9


W
1,661.0


W
1,859.5     (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 IMT-2000 license. See note 2(l)
    and note 8 of the notes to our consolidated financial
    statements. 66




---



##### Table of Contents



(3)
    
    This amount does not include our future investments in the CDMA
    market in Vietnam, which we expect to make through our overseas
    subsidiary SKT Vietnam under a business cooperation contract
    with Saigon Post & Telecommunication Service
    Corporation. See Item 4.B. Business
    Overview  Global Business  Overseas
    Operations and  Critical Accounting
    Policies, Estimates And Judgments  Off-Balance Sheet
    Arrangements.    Inflation
    U.S.
    GAAP Reconciliation
        New
    Accounting Pronouncements under U.S. GAAP
  No. 06-3, No. 06-3). No. 06-3 No. 06-3 No. 06-3
   67




---



##### Table of Contents



No. 157-1, (FSP 157-1) No. 157-2, (FSP 157-2), FSP 157-1 FSP 157-2
       68




---



##### Table of Contents



14-1, 14-1). 14-1 14-1 14-1 14-1
  07-5, 07-5). 07-5, 07-5 07-5
  No. FAS 140-4 FIN 46R-8, No. FAS 140-4 FIN 46R-8). No. FAS 140-4 FIN 46R-8 No. FAS 140-4 FIN 46R-8
  No. EITF 99-20-1, No. 99-20 No. EITF 99-20-1). No. EITF 99-20-1 No. 99-20 EITF 99-20 No. EITF 99-20-1 EITF 99-20 No. EITF 99-20-1
  No. 141R-1, No. 141R-1). No. 141R-1 No. 141R-1
  No. FAS 115-2 FAS 124-2. No. FAS 115-2 FAS 124-2 other-than-temporary other-than-temporary No. FAS 115-2 FAS 124-2
 69




---



##### Table of Contents



No. FAS 115-2 FAS 124-2
  Significant
    Changes in Korean GAAP
      
    Pursuant to adoption of SKAS No. 21, Preparation and
    Presentation of Financial Statements, certain amounts
    classified as capital adjustments through 2006 are classified as
    accumulated other comprehensive income (loss)  such
    amounts include unrealized gain/loss on
    available-for-sale
    securities, equity in capital adjustments of affiliates and
    gain/loss on valuation of derivative instruments. In addition,
    certain amounts classified as investment assets through 2006 are
    classified as other non-current assets  such amounts
    include long-term loans, guarantee deposits, long-term deposits
    and others. The consolidated balance sheet as of
    December 31, 2006, which appears in the consolidated
    financial statements included elsewhere in this report, has been
    reclassified in accordance with SKAS No. 21.
    Pursuant to adoption of SKAS No. 25, Consolidated
    Financial Statements, net income is allocated to equity
    holders of the parent and minority interest. In addition, when a
    subsidiary is purchased during the year, such subsidiarys
    statement of income is included in consolidation as though it
    had been acquired as of January 1 of the relevant year, and
    preacquisition earnings are presented as deduction at the bottom
    of the consolidated statements of income. The accompanying
    consolidated statement of income for the year ended
    December 31, 2006, which appears in the consolidated
    financial statements included elsewhere in this report, has been
    reclassified in accordance with SKAS No. 25. In addition,
    in connection with our adoption of SKAS No. 25, we also
    began to present pre-acquisition cash flows of subsidiaries as a
    separate deduction (addition) at the bottom of our consolidated
    statements of cash flows.  W W W W
  Critical
    Accounting Policies, Estimates And Judgments
   70




---



##### Table of Contents



Allowances
    for Doubtful Accounts
    Derivative
    Instruments
    Estimated
    Useful Lives
    Impairment
    of Long-lived Assets Including the WCDMA Frequency Usage
    Right
      Impairment
    of Investment Securities
  available-for-sale held-to-maturity
 71




---



##### Table of Contents



Income
    Taxes
      Off-Balance
    Sheet Arrangements
    Item 5.C.
    Research
    and Development  Overview
      As of and for theYear Ended December 31,2006


2007


2008(In billions of Won)Internal R&D Expenses

W
212.0


W
218.7


W
226.7External R&D Expenses


67.0



74.4



73.0Total R&D Expenses

W
279.0


W
293.1


W
299.7  72




---



##### Table of Contents



Internal
    Research and Development
    state-of-the-art
  
    The access technology R&D center, which has
    pioneered the development of 3G and 3.5G technologies. This
    center is developing next-generation technologies, including
    with a view toward leading global standardization of mobile
    telecommunications technologies. Current projects include the
    development of multimedia handsets and location-based services,
    as well as development of network technologies, including with
    respect to WiBro, personal area network, ubiquitous sensor and
    broadband convergence networks, The access technology R&D
    center is also spearheading our joint development of TD-SCDMA
    technology with the Chinese government.
    The service technology R&D center, which focuses on
    improving the quality and operation of our core networks;
    building a flexible service infrastructure that will support the
    introduction of new products and services and enable easy
    maintenance; and developing new services based on customer
    needs. Specifically, this center has been developing an array of
    value-added services, including COLORing services and developing
    new wireless data and convergent products and services.
    The technology innovation center, which is responsible
    for developing and maintaining our overall management and
    information technology infrastructure, including billing and
    subscriber information security systems. The information
    technology R&D center is also currently upgrading our
    customer relationship management system.    External
    Research and Development
   73




---



##### Table of Contents



Item 5.D.
    Trend
    Information    Item 5.E.
    Off-Balance
    Sheet Arrangements    Item 5.F.
    Tabular
    Disclosure of Contractual Obligations    Item 5.G.
    Safe
    Harbor    Item 6.
    DIRECTORS,
    SENIOR MANAGEMENT AND EMPLOYEES  Item 6.A.
    Directors
    and Senior Management         74




---



##### Table of Contents



100-999,
    Other PrincipalDate of

Director

Expiration



DirectorshipsName

Birth

Since

of Term

Position

and Positions

Business ExperienceMan Won Jung

Oct. 5, 1952

2009

2012

President, Chief Executive
    Officer & Representative
    Director



CEO & President, SK Networks; Vice President, Internet
    Business Divisional Group, SK Telecom; Vice President, Customer
    Business Development Group, SK CorporationSung Min Ha

Mar. 24, 1957

2004

2010

Head of Mobile Network
    Operations Business



Head of Strategic Planning Group, SK Telecom; Director, SK
    Telink; Auditor, SK C&C; Chairman and Representative
    Director, SKT Vietnam; Auditor,
    SK Teletech     Other PrincipalDate of

Director

Expiration



DirectorshipsName

Birth

Since

of Term

Position

and Positions

Business ExperienceJae Won Chey

May. 16, 1963

2009

2012

Vice Chairman & CEO, SK Gas
    Vice Chairman & CEO, SK E&S

Director, SK Holdings

Executive Vice President, Head of Corporate Center, SK Telecom;
    Executive Vice President, Head of Strategic Support Division, SK
    TelecomHyun Chin Lim

Apr. 26, 1949

2009

2012

Independent
    Non-executive Director

Dean, College of Social Science, Seoul National University

President, Korea Sociological Association; Dean, Faculty of
    Liberal Education, Seoul National University; President, Korean
    Association of NGO StudiesDal Sup Shim

Jun. 27, 1950

2007

2010

Independent
    Non-executive Director

Research Fellow, Institute for Global Economics

Auditor, Korea Credit Guarantee Fund; Financial Attaché,
    Korean Embassy in the United States; Audit Officer, Korea
    Customs Service; Tax & Customs Office, Ministry of Strategy
    and Finance (formerly Ministry of Finance and Economy)Rak Young Uhm

Jun. 23, 1948

2008

2011

Independent 
    Non-executive Director

Visiting Professor Graduate School of Public Administration,
    Seoul National University

Independent Non-executive Director, Tong Yang Insurance Co.,
    Ltd., Non-Standing Director KOTRA; President, Korea Development
    BankJay Young Chung

Oct. 15, 1944

2008

2011

Independent
    Non-executive Director

Professor, Graduate School of Business Administration, Sung Kyun
    Kwan University

Chief, Asia-Pacific Economic Association; Vice President, Sung
    Kyun Kwan University; Independent Non-executive Director, POSCOJae Ho Cho

Jan. 18, 1955

2008

2011

Independent
    Non-executive Director

Professor of Finance, College of Business Administration, Seoul
    National University

Director, Kyung Hee Foundation; Visiting Professor, Graduate
    School of Economics, University of Tokyo, Advisory Committee
    Member, Samsung Securities  75




---



##### Table of Contents



Item 6.B.
    Compensation        Item 6.C.
    Board
    Practices    Termination
    of Directors, Services
    Audit
    Committee
    
    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.   76




---



##### Table of Contents



Independent
    Non-executive Director Nomination Committee
    Capex
    Review Committee
    Compensation
    Committee
    Corporate
    Citizenship Committee
    Item 6.D.
    Employees    Regular


TemporaryEmployees


Employees


TotalDecember 31, 2006


6,178



1,498



7,676December 31, 2007


7,524



1,961



9,485December 31, 2008


8,964



1,662



10,626   Labor
    Relations
   77




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##### Table of Contents



Employee
    Stock Ownership Association and Other Benefits
          on-site
 78




---



##### Table of Contents



Item 6.E.
    Share
    Ownership    PercentageNumber of

of Total

SpecialShares

Shares

VotingName

Position

Owned

Outstanding

Rights

OptionsStanding Directors:Man Won Jung

President, Chief Executive Officer and Representative Director


100



0



None



NoneSung Min Ha

Head of Mobile Network Operations Business


738



0



None



NoneNon-Standing Directors:Jae Won Chey

Independent Non-executive Director


0



0



None



NoneHyun Chin Lim

Independent Non-executive Director


0



0



None



NoneDal Sup Shim

Independent Non-executive Director


0



0



None



NoneRak Young Uhm

Independent Non-executive Director


0



0



None



NoneJay Young Chung

Independent Non-executive Director


0



0



None



NoneJae Ho Cho

Independent Non-executive Director


0



0



None



None   Item 7.
    MAJOR
    SHAREHOLDERS AND RELATED PARTY TRANSACTIONS  Item 7.A.
    Major
    Shareholders    Percentage


PercentageNumber of


Total Shares


Total SharesShareholder/Category

Shares


Issued


OutstandingDomestic ShareholdersSK Holdings


18,748,452



23.09
%


25.85
%Employees(1)


484,105



0.60



0.67Treasury shares(1)(2)


8,707,696



10.73



N/AOfficers and Directors


10,707



0*



0*Other Domestic Shareholders


16,331,922



20.11



19.30Foreign Shareholders


34,607,448



42.62



47.72Total Issued Shares


81,193,711



100.00
%


100.00
%     *
    
    Less than 0.00%.(1)
    
    Represents shares owned by our employee stock ownership
    association. See Item 6.D. Employees. 79




---



##### Table of Contents



(2)
    
    Treasury shares do not have any voting rights; includes
    1,324,744 treasury shares that were deposited with Korea
    Securities Depository to be reserved and used to satisfy the
    conversion rights of the holders of US$229.2 million in
    zero coupon convertible notes that were sold in May 2004.    As of December 31,Shareholder

2006


2007


2008(As a percentage of total issued shares)(1)SK Group(2)


22
.79
%


23
.09
%


23
.09
%SK Holdings


21
.47



21
.75



23
.09SK Networks


1
.32



1
.34



0POSCO(3)


3
.64



2
.88



2
.88     (1)
    
    Includes 8,526,252, 8,609,034 and 8,707,696 shares held in
    treasury as of December 31, 2006, 2007 and 2008,
    respectively.(2)
    
    SK Groups ownership interest as of December 31, 2006
    and December 31, 2007 consisted of the ownership interests
    of SK Holdings and SK Networks. SK Groups ownership
    interest as of December 31, 2008 consisted of the ownership
    interest of SK Holdings only.(3)
    
    POSCO acquired these shares in connection with our acquisition
    of a 27.7% equity interest in Shinsegi.           80




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##### Table of Contents




    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% of the average of our annual revenue for the preceding
    three fiscal years.        Item 7.B.
    Related
    Party Transactions  SK
    Networks
      Other
    Related Parties
     81




---



##### Table of Contents



Item 7.C.
    Interests
    of Experts and Counsel  Not applicable.
  Item 8.
    FINANCIAL
    INFORMATION  Item 8.A.
    Consolidated
    Statements and Other Financial Information    Legal
    Proceedings
  FTC
    Proceedings
   82




---



##### Table of Contents



MIC
    and KCC Proceedings
                   83




---



##### Table of Contents



SK
    Broadband Litigation
      Dividends
        Dividend


Total Amount


Number of SharesYear Ended December 31,

per Share


of Dividends


Entitled to Dividend(In Won)


(In billions of Won)2004

W
10,300


W
758.2



73,614,2962005


9,000



662.5



73,614,2962006


8,000



582.4



72,667,4592007


9,400



682.4



72,584,6772008


9,400



682.0



72,524,203  84




---



##### Table of Contents



Item 8.B.
    Significant
    Changes  Not applicable.
  Item 9.
    THE
    OFFER AND LISTING  Item 9.A.
    Offering
    and Listing Details    Item 9.B.
    Plan
    of Distribution  Not applicable.
 85




---



##### Table of Contents



Item 9.C.
    Markets      Shares of
    Common Stock
    Prices


AverageCalendar Year

High(1)


Low(1)


Close


Daily Trading Volume(Won per shares)


(Number of shares)2004


238,500



154,500



197,000



179,712First Quarter


238,500



207,500



214,500



245,576Second Quarter


213,000



179,000



190,000



188,095Third Quarter


186,000



154,500



175,500



137,559Fourth Quarter


205,000



174,500



197,000



151,9032005


216,500



163,500



181,000



186,239First Quarter


200,500



171,000



171,000



202,857Second Quarter


192,500



163,500



182,000



137,021Third Quarter


216,500



178,500



202,500



156,019Fourth Quarter


209,500



181,000



181,000



249,5502006


235,000



177,000



222,500



190,565First Quarter


203,500



177,000



192,500



177,491Second Quarter


235,000



190,000



204,000



216,607Third Quarter


204,500



181,000



201,500



204,167Fourth Quarter


233,000



195,000



222,500



163,5342007


274,000



188,500



249,000



244,056First Quarter


223,000



190,500



191,500



206,155Second Quarter


215,000



188,500



213,000



220,091Third Quarter


221,000



192,000



210,000



198,816Fourth Quarter


274,000



204,500



249,000



349,7012008


232,000



178,000



209,000



322,706First Quarter


232,000



178,500



186,500



330,196Second Quarter


212,000



180,000



190,500



265,973Third Quarter


210,500



178,000



205,500



317,506Fourth Quarter


227,500



187,500



209,000



374,7682009 (through June 24)


218,000



170,500



173,000



378,180First Quarter


218,000



181,500



192,000



341,322January


218,000



204,000



207,500



365,646February


204,000



187,500



187,500



326,534March


195,000



181,500



192,000



333,758Second Quarter (through June 24)


192,500



170,500



173,000



416,287April


192,500



183,000



183,500



405,964May


183,500



176,000



176,000



439,608June (through June 24)


182,000



170,500



173,000



404,289       (1)
    
    Both high and low prices are based on the daily closing prices
    for the period. 86




---



##### Table of Contents



American
    Depositary Shares
    Prices


AverageCalendar Year

High(1)


Low(1)


Close


Daily Trading Volume(US$ per ADS)


(Number of ADSs)2004


25.01



17.28



22.25



915,441First Quarter


25.01



19.43



21.30



1,331,177Second Quarter


21.83



19.15



20.99



845,597Third Quarter


20.76



17.28



19.45



768,117Fourth Quarter


23.10



19.30



22.25



727,6832005


23.14



18.96



20.29



882,342First Quarter


22.19



19.41



19.72



798,390Second Quarter


21.84



18.96



20.40



618,870Third Quarter


23.14



20.06



21.84



1,071,227Fourth Quarter


21.95



19.74



20.29



1,039,3982006


27.70



20.62



26.48



866,527First Quarter


24.56



20.62



23.59



952,819Second Quarter


27.70



22.54



23.42



1,045,503Third Quarter


24.16



21.14



23.63



789,033Fourth Quarter


27.42



22.89



26.48



680,1242007


33.33



22.46



29.84



1,379,370First Quarter


26.41



22.46



23.42



1,046,780Second Quarter


28.02



23.41



27.35



1,498,295Third Quarter


30.30



26.15



29.70



1,498,032Fourth Quarter


33.33



29.00



29.84



1,462,4952008


27.96



14.63



18.18



1,762,329First Quarter


27.96



19.90



21.61



1,992,134Second Quarter


23.47



20.67



20.77



1,106,308Third Quarter


22.29



18.68



18.82



1,663,854Fourth Quarter


19.51



14.63



18.18



2,297,7942009 (through June 23)


18.35



12.69



15.06



1,206,829First Quarter


18.35



12.69



15.45



1,244,030January


18.35



16.35



16.35



1,113,119February


16.56



13.39



13.39



984,754March


16.25



12.69



15.45



1,586,959Second Quarter (through June 23)


16.53



15.00



15.06



1,167,759April


16.42



15.00



15.67



1,153,857May


16.53



15.38



15.73



1,227,860June (through June 23)


15.86



15.02



15.06



1,114,224       (1)
    
    Both high and low prices are based on the daily closing prices
    for the period. 87




---



##### Table of Contents



The
    Korean Securities Market
  The
    Korea Exchange Inc.
  sub-organization
         88




---



##### Table of Contents



Period AverageDividend


PriceYield(1)


EarningsYear

Opening


High


Low


Closing


(%)


Ratio(2)1980


100.00



119.36



100.00



106.87



20.9



2.61981


97.95



165.95



93.14



131.37



13.2



3.11982


123.60



134.49



106.00



127.31



10.5



3.41983


122.52



134.46



115.59



121.21



6.9



3.81984


116.73



142.46



114.37



142.46



5.1



4.51985


139.53



163.37



131.40



163.37



5.3



5.21986


161.40



279.67



153.85



272.61



4.3



7.61987


264.82



525.11



264.82



525.11



2.6



10.91988


532.04



922.56



527.89



907.20



2.4



11.21989


919.61



1,007.77



844.75



909.72



2.0



13.91990


908.59



928.77



566.27



696.11



2.2



12.81991


679.75



763.10



586.51



610.92



2.6



11.21992


624.23



691.48



459.07



678.44



2.2



10.91993


697.41



874.10



605.93



866.18



1.6



12.71994


879.32



1,138.75



860.47



1,027.37



1.2



16.21995


1,013.57



1,016.77



847.09



882.94



1.2



16.41996


888.85



986.84



651.22



651.22



1.3



17.81997


653.79



792.29



350.68



376.31



1.5



17.01998


385.49



579.86



280.00



562.46



1.9



10.81999


587.57



1,028.07



498.42



1,028.07



1.1



13.52000


1,059.04



1,059.04



500.60



504.62



2.4



15.32001


520.95



704.50



468.76



693.70



1.7



29.32002


724.95



937.61



584.04



829.44



1.8



15.62003


635.17



822.16



515.24



810.71



2.1



10.12004


821.26



936.06



719.59



895.92



2.1



15.82005


893.71



1,379.37



870.84



1,379.37



1.7



11.02006


1,389.27



1,464.70



1,192.09



1,434.46



1.7



11.42007


1,435.26



2,064.85



1,355.79



1,897.13



1.4



16.82008


1,853.45



1,888.88



938.75



1,124.47



2.6



9.02009 (through June 19)


1,157.40



1,435.70



1,018.81



1,383.34



2.2



12.0       (1)
    
    Dividend yields are based on daily figures. Before 1983,
    dividend yields were calculated at the end of each month.
    Dividend yields after January 3, 1984 include cash
    dividends only.(2)
    
    The price to earnings ratio is based on figures for companies
    that record a profit in the preceding year.     89




---



##### Table of Contents



Previous Days Closing Price W

Rounded Down to WLess than 5,000

W
55,000 to less than 10,000


1010,000 to less than 50,000


5050,000 to less than 100,000


100100,000 to less than 500,000


500500,000 or more


1,000      90




---



##### Table of Contents



Market Capitalization on theLast Day of Each PeriodNumber of








Average Daily Trading Volume, ValueListed


(Billions of


(Millions of


Thousands


(Millions of


(ThousandsYear

Companies


Won)


US$)(1)


of Shares


Won)


of US$)(1)1981


343


W
2,959


US$
4,223



10,565


W
8,708


US$
12,4271982


334



3,001



4,012



9,704



6,667



8,9141983


328



3,490



4,361



9,325



5,941



7,4251984


336



5,149



6,207



14,847



10,642



12,8291985


342



6,570



7,362



18,925



12,315



13,7981986


355



11,994



13,863



31,755



32,870



37,9911987


389



26,172



32,884



20,353



70,185



88,1831988


502



64,544



93,895



10,367



198,364



288,5711989


626



95,477



140,119



11,757



280,967



412,3381990


669



79,020



109,872



10,866



183,692



255,4121991


686



73,118



95,541



14,022



214,263



279,9731992


688



84,712



107,027



24,028



308,246



389,4451993


693



112,665



138,870



35,130



574,048



707,5661994


699



151,217



190,762



36,862



776,257



979,2571995


721



141,151



181,943



26,130



487,762



628,7211996


760



117,370



138,490



26,571



486,834



928,4181997


776



70,989



41,881



41,525



555,759



327,8811998


748



137,799



114,261



97,716



660,429



547,6191999


725



349,504



307,662



278,551



3,481,620



3,064,8062000


704



188,042



148,415



306,163



2,602,211



2,053,8372001


689



255,850



194,785



473,241



1,997,420



1,520,6852002


683



258,681



216,071



857,245



3,041,598



2,540,5902003


684



355,363



298,624



542,010



2,216,636



1,862,7192004


683



412,588



398,597



372,895



2,232,109



2,156,4192005


702



655,075



648,589



467,629



3,157,662



3,126,3982006


731



704,588



757,622



279,096



3,435,180



3,693,7422007


745



951,900



1,017,205



363,732



5,539,588



5,919,6972008


763



576,888



457,122



355,205



5,189,644



4,112,2382009 (through June 19)


757



719,468



569,109



568,914



5,915,222



4,679,024       (1)
    
    Converted at the noon buying rate on the last business day of
    the period indicated.    Further
    Opening of the Korean Securities Market
   91




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Protection
    of Customers Interest in Case of Insolvency of Financial
    Investment Companies with a Brokerage License
           92




---



##### Table of Contents



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 Incorporation  Description
    of Capital Stock
  Form 20-F.
  General
  110111-0371346.
  
    information and communication business;
    sale and lease of subscriber handsets;
    new media business;
    advertising business;
    mail order business;
    business of leasing available and real estate property;
    research and technology development relating to the first four
    items above;
    overseas and import/export business relating to the first four
    items above; 93




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##### Table of Contents




    manufacture and distribution business relating to the first four
    items above;
    tourism
    electronic financial services business;
    film business (production, import, distribution and
    screening); and
    any business or undertaking incidental or conducive to the
    attainment of the objectives stated above.    Board
    of Directors
    
    investment by us or any of our subsidiaries in a foreign company
    or equity or other overseas assets in an amount equal to 5.0% or
    more of our shareholders 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 billion through
    one or a series of transactions.        Dividends
     94




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##### Table of Contents



Distribution
    of Free Shares
    Preemptive
    Rights and Issuance of Additional Shares
     95




---



##### Table of Contents



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.        Voting
    Rights
     96




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##### Table of Contents




    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.          Limitation
    on Shareholdings
    Rights
    of Dissenting Shareholders
  20-day
 97




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##### Table of Contents



Registry
    of Shareholders and Record Dates
    and/or
  Annual
    Report
      Transfer
    of Shares
      24-3,
  Restrictions
    Applicable to Shares
   98




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##### Table of Contents



Acquisition
    of Shares by Us
        Liquidation
    Rights
    Description
    of American Depositary Shares
  Form F-3 No. 333-91304)
  American
    Depositary Receipts
  411-770, 150-884,
  Deposit
    and Withdrawal of Shares of Common Stock
   99




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##### Table of Contents




    before or at the time of the pre-release, the person to whom the
    pre-release is being made must represent to the ADR depositary
    in writing that it or its customer owns the shares of common
    stock or ADSs to be deposited and show evidence of the ownership
    to the ADR depositarys satisfaction;
    before or at the time of such pre-release, the person to whom
    the pre-release is being made must agree in writing that he will
    hold the shares of common stock or ADSs in trust for the ADR
    depositary until their delivery to the ADR depositary or
    custodian, reflect on his records the ADR depositary as owner of
    such shares of common stock or ADSs and deliver such shares of
    common stock upon the ADR depositarys request; 100




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##### Table of Contents




    the pre-release must be fully collateralized with cash or
    U.S. government securities;
    the ADR depositary must be able to terminate the pre-release on
    not more than five business days notice; and
    the pre-release is subject to further indemnities and credit
    regulations as the ADR depositary deems appropriate.      Dividends,
    Other Distributions and Rights
         101




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##### Table of Contents



Record
    Dates
    
    any cash dividend or other cash distribution becomes payable;
    any distribution other than cash is made;
    rights are issued with respect to deposited shares of common
    stock;
    the ADR depositary causes a change in the number of shares of
    common stock that are represented by each ADS; or
    the ADR depositary receives notice of any shareholders
    meeting.    Voting
    of the Underlying Shares of Common Stock
    
    the information contained in our notice to the ADR depositary
    including an English translation, or, if requested by us, a
    summary of the information provided by us; 102




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##### Table of Contents




    a statement that the ADR holders as of the close of business on
    a specified record date will be entitled to instruct the ADR
    depositary as to how to exercise their voting rights for the
    number of shares of deposited shares of common stock, subject to
    the provisions of applicable Korean law and our articles of
    incorporation, which provisions, if any, will be summarized in
    the notice to the extent that they are material; and
    a statement as to the manner in which the ADR holders may give
    their instructions.    Inspection
    of Transfer Books
    Reports
    and Notices
       103




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Changes
    Affecting Deposited Shares of Common Stock
  split-up,
  Amendment
    and Termination of the Deposit Agreement
        
    to collect dividends and other distributions pertaining to the
    deposited shares of common stock;
    to sell property and rights and the conversion of deposited
    shares of common stock into cash as provided in the deposit
    agreement; and
    to deliver deposited shares of common stock, together with any
    dividends or other distributions received with respect to the
    deposited shares of common stock and the net proceeds of the
    sale of any rights or other property represented by those ADSs
    in exchange for surrendered ADRs.    Charges
    of ADR Depositary
    
    taxes and other governmental charges;
    registration fees applicable to transfers of shares of common
    stock on our shareholders register, or that of any entity
    acting as registrar for the shares, to the name of the ADR
    depositary or its nominee, or the Custodian or its nominee, when
    making deposits or withdrawals under the deposit agreement;
    cable, telex and facsimile transmission expenses that are
    expressly provided in the deposit agreement;
    expenses incurred by the ADR depositary in the conversion of
    foreign currency into Dollars under the deposit agreement; 104




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##### Table of Contents




    a fee of up to US$5.00 per 100 ADSs, or portion thereof, for
    execution and delivery of ADSs and the surrender of ADRs under
    the deposit agreement; and
    a fee of up to US$0.02 per ADS held for cash distributions, a
    sale or exercise of rights or the taking of any other corporate
    action involving distributions to shareholders.  General
    split-up,
     105




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##### Table of Contents



Governing
    Law
        Information
    Relating to the ADR Depositary
      Form 10-K Form 10-Q,
    Item 10.C.
    Material
    Contracts    Item 10.D.
    Exchange
    Controls  Korean
    Foreign Exchange Controls and Securities Regulations
  General
      
    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, 106




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the MOSF 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) or impose an obligation
    to deposit, safe-keep or sell any means of payment to The Bank
    of Korea or certain other governmental agencies or financial
    institutions; 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 MOSF 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 or certain other
    governmental agencies or financial institutions.  Government
    Review of Issuances of 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 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. See Item 10.B.
    Memorandum and Articles of Incorporation  Description
    of American Depositary Shares. Therefore, a holder of ADRs
    who surrenders ADRs and withdraws shares may not be permitted
    subsequently to deposit those shares and obtain ADRs.    Reporting
    Requirements for Holders of Substantial Interests
   107




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his/her he/she his/her
    Restrictions
    Applicable to ADSs
        Restrictions
    Applicable to Shares
   108




---



##### Table of Contents




    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 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; and
    arms length transactions between foreigners in the event
    all such foreigners belong to an investment group managed by the
    same person.  over-the-counter
  over-the-counter
   109




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##### Table of Contents



110




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##### Table of Contents



Item 10.E.
    Taxation  United
    States Taxation
    
    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;
    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; or
    a person that owns or is deemed to own 10% or more of any class
    of our stock.        
    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. 111




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Dividends
        Sale
    or Other Disposition
    Foreign
    Tax Credit Considerations
  16-day
     112




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##### Table of Contents



U.S.
    Information Reporting and Backup Withholding Rules
  U.S.-related non-U.S. status U.S.-related
  Korean
    Taxation
    Tax on
    Dividends
      Tax on
    Capital Gains
       113




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##### Table of Contents



Inheritance
    Tax and Gift Tax
      Securities
    Transaction Tax
        Tax
    Treaties
     114




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##### Table of Contents



Item 10.F.
    Dividends
    and Paying Agents  Not applicable.
  Item 10.G.
    Statements
    by Experts  Not applicable.
  Item 10.H.
    Documents
    on Display  Form 20-F, 1-800-SEC-0330. http://www.sec.gov
  100-999,
  Item 10.I.
    Subsidiary
    Information  Not applicable.
  Item 11.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  Exchange
    Rate and Interest Rate Risks
       115




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##### Table of Contents



Exchange
    Rate Risk
    Interest
    Rate Risk
    Maturities2009


2010


2011


2012


2013


Thereafter


Total


Fair Value(In billions of Won, except for percentage data)Local currency:Fixed rate

W
792.5


W
470.6


W
537.6


W
5.5


W
441.7


W
769.6


W
3,017.5


W
3,063.7Average weighted rate(1)


6.33
%


5.93
%


6.15
%


5.91
%


5.75
%


5.20
%Variable rate


300.3



0.1



700.0















1,000.4



1,000.4Average weighted rate(1)


7.31
%


3.25
%


4.93
%


0.00
%


0.00
%


0.00
%Sub-total


1,092.8



470.7



1,237.6



5.5



441.7



769.6



4,017.9



4,064.1Foreign currency:Fixed rate


279.6







375.6



649.9







494.0



1,799.1



2,202.5Average weighted rate(1)


0.00
%


0.00
%


4.25
%


0.00
%


0.00
%


6.63
%Variable rate






187.3







173.7



125.8







486.8



486.7Average weighted rate(1)


0.00
%


4.51
%


0.00
%


1.38
%


0.00
%


0.00
%Sub-total


279.6



187.3



375.6



823.6



125.8



494.0



2,285.9



2,689.2Total

W
1,372.4


W
658.0


W
1,613.2


W
829.1


W
567.5


W
1,263.6


W
6,303.8


W
6,753.3     (1)
    
    Weighted average rates of the portfolio at the period end.    Item 12.
    DESCRIPTION
    OF SECURITIES OTHER THAN EQUITY SECURITIES    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  Rules 13a-15(e)
 116




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##### Table of Contents



15d-15(e)
  Managements
    Annual Report on Internal Control Over Financial
    Reporting
  Rules 13a-15(f) 15d-15(f)
  Attestation
    Report of the Registered Public Accounting Firm
  Form 20-F.
  Changes
    in Internal Control Over Financial Reporting
    Item 16.
    RESERVED  Item 16A.
    AUDIT
    COMMITTEE FINANCIAL EXPERT   117




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##### Table of Contents



Item 16B.
    CODE
    OF ETHICS  Code of
    Ethics for Chief Executive Officer, Chief Financial Officer and
    Controller
  www.sktelecom.com
  Item 16C.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES    Years Ended December 31,2007


2008(In millions of Won)Audit Fees

W
1,220.5


W
1,687.0Audit-Related Fees

W
81.1


W
Tax Fees

W
277.0


W
229.7All Other Fees

W



W
Total

W
1,578.6


W
1,916.7   Audit Fees
  Audit-Related Fees
  Tax Fees
  All Other
    Fees
  Pre-Approval
    of Audit and Non-Audit Services Provided by Independent
    Registered Public Accounting Firm
    de minimis Rule 2-01 Regulation S-X
  Item 16D.
    EXEMPTIONS
    FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES  Not applicable.
 118




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##### Table of Contents



Item 16E.
    PURCHASES
    OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
    PURCHASERS  Rule 10b-18(a)(3)
  Maximum NumberTotal Number of


of Shares ThatShares Purchased


May yet beas Part of Publicly


Purchased UnderTotal Number of


Average Price Paid


Announced Plans


the Plans orPeriod 2008

Shares Purchased


per Share


or
    Program(2)


Program(2)January





W








February





W








March





W








April





W








May





W








June





W








July





W








August





W








September





W








October





W








November





W








December


306,988(1
)

W
206,972



306,988



141,012Total


306,988(1
)

W
206,972



306,988



141,012     (1)
    
    Purchased through open market transactions.(2)
    
    On October 24, 2008, we announced a plan to repurchase up
    to 448,000 common shares during the period between
    October 27, 2008 and January 26, 2009.  In January
    2009, we completed the repurchase under this plan by purchasing
    the remaining 141,012 shares. 119




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##### Table of Contents



Item 16G.
    CORPORATE
    GOVERNANCE    NYSE Corporate Governance Standards

Our Corporate Governance PracticeDirector IndependenceListed companies must have a majority of independent directors.

Of the eight members of our board of directors, five are
    independent directors.Executive SessionListed companies must hold meetings solely attended by
    non-management directors to more effectively check and balance
    management directors.

Our Audit Committee, which is comprised solely of three
    independent directors, holds meetings whenever there are matters
    related to management directors, and such meetings are generally
    held once every month.Nomination/Corporate Governance CommitteeListed companies must have a nomination/corporate governance
    committee composed entirely of independent directors.

Although we do not have a separate nomination/ corporate
    governance committee, we maintain an Independent Director
    Recommendation Committee composed of independent directors and
    management directors.Audit CommitteeListed companies must have an audit committee that satisfies the
    requirements of Rule 10A-3 under the Exchange Act.

We maintain an Audit Committee comprised solely of three
    independent directors.Audit Committee Additional RequirementsListed companies must have an audit committee that is composed
    of more than three directors.

Our Audit Committee has three independent directors.Shareholder Approval of Equity Compensation PlanListed 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 two equity compensation plans: a stock option
    plan for officers and directors and employee stock ownership
    plan for employees (ESOP). We manage such
    compensation plans in compliance with the applicable laws and
    our articles of incorporation, provided that, under certain
    limited circumstances, the grant of stock options or matters
    relating to ESOP are not subject to shareholders approval
    under Korean law.Corporate Governance GuidelinesListed companies must adopt and disclose corporate governance
    guidelines.

Although we do not maintain separate corporate governance
    guidelines, we are 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 EthicsListed 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.  120




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##### Table of Contents



PART III
  Item 17.
    FINANCIAL
    STATEMENTS  Not applicable.
  Item 18.
    FINANCIAL
    STATEMENTS  Index of Financial Statements


F-1Report of Independent Registered Public Accounting Firm on
    Consolidated Financial Statements


F-2Report of Independent Registered Public Accounting Firm on
    Internal Control over Financial Reporting


F-3Consolidated balance sheets as of December 31, 2006, 2007
    and 2008


F-4Consolidated statements of income for the years ended
    December 31, 2006, 2007 and 2008


F-6Consolidated statements of stockholders equity for the
    years ended December 31, 2006, 2007 and 2008


F-8Consolidated statements of cash flows for the years ended
    December 31, 2006, 2007 and 2008


F-11Notes to consolidated financial statements for the years ended
    December 31, 2006, 2007 and 2008


F-14   Item 19.
    EXHIBITS  Number

Description1
.1

Articles of Incorporation2
.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 Shares8
.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 200212
.2

Certification of Principal Financial Officer Pursuant to Section
    302 of the Sarbanes-Oxley Act of 200213
.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 200213
.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 200215
.1**

Framework Act on Telecommunications, as amended (English
    translation)15
.2**

Enforcement Decree of the Framework Act on Telecommunications,
    as amended (English translation)15
.3**

Telecommunications Business Act, as amended (English translation)15
.4**

Enforcement Decree of the Telecommunications Business Act
    (English translation)15
.5**

Amendment to the Government Organization Act99
.1

Consent of Deloitte Anjin LLC     *
    
    Filed previously as exhibits to our
    Form 20-F
    filed on June 30, 2006.**
    
    Filed previously as exhibits to our
    Form 20-F
    filed on June 30, 2008. 121




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##### Table of Contents



SIGNATURES
  Form 20-F
  SK TELECOM CO., LTD. (Registrant)
  
   Title:
    President, Chief Executive Officer &    122




---



##### 



INDEX OF
    FINANCIAL STATEMENTS
   
 Report of Independent Registered Public
    Accounting Firm on Consolidated Financial Statements


F-2Report of Independent Registered Public
    Accounting Firm on Internal Control over Financial Reporting


F-3Consolidated balance sheets as of
    December 31, 2006, 2007 and 2008


F-4Consolidated statements of income for the years
    ended December 31, 2006, 2007 and 2008


F-6Consolidated statements of stockholders
    equity for the years ended December 31, 2006, 2007 and
    2008


F-8Consolidated statements of cash flows for the
    years ended December 31, 2006, 2007 and 2008


F-11Notes to consolidated financial statements for
    the years ended December 31, 2006, 2007 and 2008


F-14   F-1




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    ON CONSOLIDATED FINANCIAL STATEMENTS           Consolidated Financial Statements
      Internal Control  Integrated Framework
  
    F-2




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    ON INTERNAL CONTROL OVER FINANCIAL REPORTING     Internal Control  Integrated Framework
        Internal Control  Integrated Framework
  Consolidated Financial
    Statements,
  
    F-3




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##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS
 DECEMBER
    31, 2006, 2007 AND 2008
  Translation intoU.S. DollarsKorean Won


(Note 2)December 31,


December 31,


December 31,


December 31,2006


2007


2008


2008(In millions)


(In thousands)ASSETSCURRENT ASSETS :Cash and cash equivalents, net of government subsidy of nil,
    W142 million and
    W127 million as of December 31, 2006,
    2007 and 2008 (Notes 2, 13 and 29)

W
485,972


W
885,847


W
1,011,340


$
801,379Short-term financial instruments (Notes 21 and 22)


98,085



148,103



368,490



291,989Short-term investment securities (Notes 2 and 4)


665,647



736,643



372,913



295,494Accounts receivable  trade, net of allowance for
    doubtful accounts of W106,737 million,
    W93,551 million and
    W150,320 million as of December 31,
    2006, 2007 and 2008 (Notes 2, 13 and 24)


1,800,606



1,774,935



1,900,002



1,505,548Short-term loans, net of allowance for doubtful accounts of
    W9,629 million,
    W6,845 million and
    W7,599 million as of December 31,
    2006, 2007 and 2008 (Notes 2, 6 and 13)


69,745



84,570



119,087



94,364Accounts receivable  other, net of allowance for
    doubtful accounts of W31,233 million,
    W28,649 million and
    W30,357 million as of December 31,
    2006, 2007 and 2008 and present value discount of
    W27,314 million as of December 31,
    2008 (Notes 2, 13 and 24)


1,305,284



948,322



1,346,056



1,066,605Inventories (Notes 2, 3 and 23)


19,778



47,052



34,974



27,713Prepaid expenses


116,727



108,552



127,432



100,976Current deferred income tax assets, net (Notes 2 and 17)


49,940



36,383



27,786



22,017Currency swap (Notes 2 and 27)


16,660







8,236



6,526Advanced payments and other


35,518



42,665



106,131



84,098Total Current Assets


4,663,962



4,813,072



5,422,447



4,296,709NON-CURRENT ASSETS:Property and equipment, net (Notes 2, 7, 12, 22, 23 and 24)


4,507,335



4,969,354



7,437,689



5,893,573Intangible assets, net (Notes 2, 8 and 12)


3,518,411



3,433,962



3,978,145



3,152,254Long-term financial instruments (Note 21)


10,445



15,535



114



90Long-term investment securities (Notes 2 and 4)


2,475,418



5,058,519



3,105,295



2,460,614Equity securities accounted for using the equity method
    (Notes 2 and 5)


750,921



350,966



898,512



711,975Long-term loans, net of allowance for doubtful accounts of
    W19,117 million,
    W23,079 million and
    W26,376 million as of December 31,
    2006, 2007 and 2008 (Notes 2 and 6)


18,569



84,906



155,360



123,106Long-term accounts receivable  other, net of present
    value discount of W45,464 million as
    December 31, 2008 (Note 2)










572,139



453,359Guarantee deposits (Notes 13 and 24)


139,619



148,987



239,480



189,762Long-term currency swap (Notes 2 and 27)






13,057



494,711



392,006Long-term interest rate swap (Notes 2 and 27)






3,170







Non-current deferred income tax assets (Notes 2 and 17)


2,655



7,286



4,948



3,921Other


152,633



150,121



164,831



130,611Total Non-Current Assets


11,576,006



14,235,863



17,051,224



13,511,271TOTAL ASSETS

W
16,239,968


W
19,048,935


W
22,473,671


$
17,807,980 F-4




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS  (Continued)
  Translation intoU.S. DollarsKorean Won


(Note 2)December 31,


December 31,


December 31,


December 31,2006


2007


2008


2008(In millions)


(In thousands)LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Accounts payable (Notes 13 and 24)

W
1,221,704


W
1,252,734


W
1,268,750


$
1,005,349Short-term borrowings (Notes 21 and 22)


58,344



24,616



627,657



497,351Income taxes payable


336,536



319,108



328,403



260,224Dividend payable


268



308



227



180Accrued expenses (Notes 2 and 26)


375,063



436,008



861,836



682,913Withholdings


339,144



226,407



315,537



250,029Current portion of long-term debt, net (Notes 2, 8, 9, 10
    and 12)


797,042



634,990



936,009



741,687Current portion of subscription deposits (Note 11)


17,576



7,564



8,281



6,562Currency swap (Notes 2 and 27)






12,646



190,359



150,839Current deferred income tax liabilities (Notes 2 and 17)






4







Advanced receipts and other


62,739



102,489



91,762



72,711Total Current Liabilities


3,208,416



3,016,874



4,628,821



3,667,845NON-CURRENT LIABILITIES:Bonds payable, net (Notes 2, 9 and 22)


1,995,323



2,348,661



4,074,392



3,228,520Long-term borrowings (Notes 10 and 22)


293,026



323,421



856,471



678,662Subscription deposits (Note 11)


21,140



6,425



4,796



3,800Long-term payables  other, net of present value
    discount of W42,461 million,
    W27,886 million and
    W15,416 million as of December 31,
    2006, 2007 and 2008 (Notes 2 and 8)


517,539



422,114



304,584



241,350Obligations under capital lease (Notes 2, 12 and 22)


1,860



712



139,273



110,359Accrued severance indemnities, net (Note 2)


22,284



44,322



53,815



42,643Non-current deferred income tax liabilities, net (Notes 2
    and 17)


532,639



1,044,758



408,755



323,895Long-term currency swap (Notes 2 and 27)


112,970



110,911



23,947



18,975Long-term interest swap (Notes 2 and 27)


454







33,499



26,544Guarantee deposits received and other (Notes 2, 21, 24 and
    26)


51,229



43,104



120,878



95,783Total Non-Current Liabilities


3,548,464



4,344,428



6,020,410



4,770,531Total Liabilities


6,756,880



7,361,302



10,649,231



8,438,376STOCKHOLDERS EQUITY:Capital stock (Notes 1 and 14)


44,639



44,639



44,639



35,372Capital surplus (Note 14)


2,966,399



2,956,106



2,958,854



2,344,575Capital adjustments:Treasury stock (Notes 1 and 16)


(2,014,927
)


(2,041,483
)


(2,055,620
)


(1,628,859
)Loss on disposal of treasury stock (Notes 16 and 17)


(7,887
)


(94
)






Other capital adjustment (Notes 2, 5 and 17)


(12,826
)


(31,146
)


(103,769
)


(82,226
)Accumulated other comprehensive income (loss) (Note 18):Unrealized gains on valuation of long-term investment
    securities, net (Notes 2, 4 and 17)


429,228



1,624,613



407,842



323,171Equity in other comprehensive gain (loss) of affiliates, net
    (Notes 2, 5 and 17)


107,324



1,727



(68,763
)


(54,487
)Gain (loss) on valuation of currency swap, net (Notes 2, 17
    and 27)


(16,487
)


(11,816
)


8,544



6,770Gain (loss) on valuation of interest swap, net (Notes 2, 17
    and 27)


(329
)


2,298



(26,129
)


(20,704
)Foreign-based operations translation adjustment
    (Note 2)


(29,726
)


(25,564
)


34,698



27,494Retained earnings (Note 15)


7,847,434



8,914,970



9,448,185



7,486,676Minority interest in equity of consolidated subsidiaries
    (Note 2)


170,246



253,383



1,175,959



931,822Total Stockholders Equity


9,483,088



11,687,633



11,824,440



9,369,604TOTAL LIABILITIES AND STOCKHOLDERS EQUITY

W
16,239,968


W
19,048,935


W
22,473,671


$
17,807,980    F-5




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF INCOME
 YEARS
    ENDED DECEMBER 31, 2006, 2007 AND 2008
  Translation intoU.S. DollarsKorean Won


(Note 2)2006


2007


2008


2008(In millions except for per share data)


(In thousandsexcept for pershare data)OPERATING REVENUE (Notes 2, 24, 30 and 32)

W
11,027,977


W
11,863,357


W
14,020,984


$
11,110,130OPERATING EXPENSES (Notes 24 and 30):Labor cost


(491,839
)


(544,713
)


(731,418
)


(579,571
)Commissions paid


(3,293,197
)


(4,055,147
)


(4,884,819
)


(3,870,697
)Depreciation and amortization (Notes 7 and 8)


(1,553,635
)


(1,821,972
)


(2,599,791
)


(2,060,056
)Network interconnection


(1,014,913
)


(1,078,714
)


(1,327,417
)


(1,051,836
)Leased line


(412,902
)


(410,408
)


(521,118
)


(412,930
)Advertising


(307,190
)


(312,604
)


(363,412
)


(287,965
)Research and development (Note 2)


(211,961
)


(218,652
)


(226,714
)


(179,647
)Rent


(206,708
)


(234,006
)


(290,655
)


(230,313
)Frequency usage


(158,958
)


(166,395
)


(163,938
)


(129,903
)Repair


(150,848
)


(168,633
)


(226,858
)


(179,761
)Provision for bad debts (Note 2)


(61,457
)


(48,835
)


(62,973
)


(49,899
)Cost of goods sold (Note 2)


(121,381
)


(239,146
)


(233,200
)


(184,786
)Other


(421,856
)


(462,177
)


(636,203
)


(504,123
)Sub-total


(8,406,845
)


(9,761,402
)


(12,268,516
)


(9,721,487
)OPERATING INCOME (Note 31)


2,621,132



2,101,955



1,752,468



1,388,643OTHER INCOME:Interest income (Note 4)


79,969



93,838



136,006



107,770Dividends


20,351



21,119



52,477



41,582Rent






17,367



19,295



15,289Commissions (Note 24)


33,226



32,196



17,148



13,588Reversal of allowance for doubtful accounts


789



614



2,084



1,651Foreign exchange and translation gains (Note 2)


4,412



12,091



478,394



379,076Equity in earnings of affiliates (Notes 2 and 5)


45,787



247,382



24,894



19,726Gain on disposal of investment assets


27,490



3,721



17,409



13,795Gain on disposal of property and equipment and intangible assets


4,507



9,776



10,000



7,924Gain on transactions and valuation of currency swap
    (Notes 2 and 27)


16,660



10,799



265,142



210,097Gain on transactions and valuation of interest swap
    (Notes 2 and 27)










2



2Gain on conversion of convertible bonds (Note 4)






373,140







Gain on repayment of bonds






6,160







Other


51,667



33,681



34,233



27,126Sub-total


284,858



861,884



1,057,084



837,626 F-6




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF INCOME  (Continued)
  Translation intoU.S. DollarsKorean Won


(Note 2)2006


2007


2008


2008(In millions except for per share data)


(In thousandsexcept for pershare data)OTHER EXPENSES:Interest and discounts


(239,138
)


(238,958
)


(366,022
)


(290,033
)Donations


(103,348
)


(72,849
)


(100,224
)


(79,417
)Foreign exchange and translation losses (Note 2)


(4,139
)


(12,966
)


(161,788
)


(128,200
)Loss on valuation of short-term investment securities
    (Notes 2 and 4)






(1,203
)


(8,358
)


(6,623
)Equity in losses of affiliates (Notes 2 and 5)


(211,464
)


(175,474
)


(54,268
)


(43,002
)Impairment loss on investment securities (Notes 2
    and 4)


(27,696
)


(5,466
)


(223,207
)


(176,868
)Loss on disposal of investment assets


(6,096
)


(1,190
)


(12,148
)


(9,626
)Loss on disposal of property, equipment and intangible assets


(17,148
)


(30,680
)


(70,314
)


(55,716
)Impairment loss on assets (Note 2)


(7,030
)


(10,634
)


(14,754
)


(11,691
)Loss on transactions and valuation of currency swap
    (Notes 2 and 27)


(9,258
)


(33,876
)


(441,207
)


(349,609
)Loss on transactions and valuation of interest swap
    (Notes 2 and 27)










(48
)


(38
)External research and development cost (Note 2)


(67,021
)


(74,388
)


(72,993
)


(57,839
)Special severance indemnities (Note 2)


(144,021
)










Other


(48,053
)


(20,390
)


(25,488
)


(20,196
)Sub-total


(884,412
)


(678,074
)


(1,550,819
)


(1,228,858
)INCOME FROM CONTINUING OPERATION BEFORE INCOME TAX


2,021,578



2,285,765



1,258,733



997,411INCOME TAX FOR CONTINUING OPERATION (Notes 2 and 17)


572,026



694,487



298,850



236,807PREACQUISITION NET LOSS OF SUBSIDIARIES






21,088



32,664



25,883LOSS FROM DISCONTINUED OPERATION (Note 2)






(50,101
)


(20,209
)


(16,013
)NET INCOME

W
1,449,552


W
1,562,265


W
972,338


$
770,474ATTRIBUTABLE TO:Majority interests

W
1,451,491


W
1,648,876


W
1,215,719


$
963,327Minority interests


(1,939
)


(86,611
)


(243,381
)


(192,853
)W
1,449,552


W
1,562,265


W
972,338


$
770,474NET INCOME PER SHARE FROM CONTINUING OPERATION (In Korean won
    and U.S. dollars) (Notes 2 and 19)

W
19,801


W
23,143


W
16,453


$
13.04NET INCOME PER SHARE (In Korean won and U.S. dollars)
    (Notes 2 and 19)

W
19,801


W
22,696


W
16,707


$
13.24DILUTED NET INCOME PER SHARE FROM CONTINUING OPERATION (In
    Korean won and U.S. dollars) (Notes 2 and 19)

W
19,523


W
22,813


W
16,309


$
12.92DILUTED NET INCOME PER SHARE (In Korean won and U.S. dollars)
    (Notes 2 and 19)

W
19,523


W
22,375


W
16,559


$
13.12    F-7




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY
 YEARS
    ENDED DECEMBER 31, 2006, 2007 AND 2008
  AccumulatedOther








TotalCommon


Capital


Capital


Comprehensive


Retained


Minority


StockholdersStock


Surplus


Adjustments


Income


Earnings


Interest


Equity(In millions of Korean won)Balance, January 1, 2006

W
44,639


W
2,954,840


W
(2,043,625
)

W
(4,890
)

W
7,267,649


W
108,927


W
8,327,540Cumulative effect of change in accounting policies (Note 2)






15,025



(15,025
)














Adjusted balance, January 1, 2006


44,639



2,969,865



(2,058,650
)


(4,890
)


7,267,649



108,927



8,327,540Cash dividends (Note 20)


















(588,914
)






(588,914
)Interim dividends (Note 20)


















(73,714
)






(73,714
)Net income


















1,451,491



(1,939
)


1,449,552Conversion of convertible bonds (Notes 9 and 16)






(3,733
)


















(3,733
)Transfer of stock option from capital adjustments to capital
    surplus (Notes 2 and 14)






234



(234
)














Difference between the acquisition cost and the net book value
    incurred from the capital transactions between companies under
    common control (Note 2)










(1,095
)














(1,095
)Equity in capital surplus changes of affiliates






33



















33Equity in other capital adjustment changes of affiliates










48















48Treasury stock (Note 16)










32,178















32,178Loss on disposal of treasury stock (Notes 16 and 17)










(7,887
)














(7,887
)Unrealized gain on valuation of long-term investment securities
    (Notes 2 and 4)














471,321











471,321Equity in other comprehensive income changes of affiliates, net
    (Notes 2 and 5)














45,956











45,956Foreign-based operations translation adjustment
    (Note 2)














(19,737
)










(19,737
)Gain on valuation of currency swap (Notes 2 and 27)














(2,311
)










(2,311
)Gain on valuation of interest rate swap (Notes 2 and 27)














(329
)










(329
)Acquisition and retirement of treasury stock


















(209,078
)






(209,078
)Increase in minority interest in equity of consolidated
    subsidiaries






















63,258



63,258Balance, December 31, 2006

W
44,639


W
2,966,399


W
(2,035,640
)

W
490,010


W
7,847,434


W
170,246


W
9,483,088Balance, January 1, 2007

W
44,639


W
2,950,327


W
(2,019,568
)

W
490,010


W
7,847,434


W
170,246


W
9,483,088Cumulative effect of change in accounting policies (Note 2)






16,072



(16,072
)














Adjusted balance, January 1, 2007


44,639



2,966,399



(2,035,640
)


490,010



7,847,434



170,246



9,483,088Cash dividends (Note 20)


















(508,672
)






(508,672
)Interim dividends (Note 20)


















(72,668
)






(72,668
)Net income


















1,648,876



(86,611
)


1,562,265Conversion of convertible bonds (Notes 9 and 16)






(11,116
)


















(11,116
)Transfer of stock option from capital adjustments to capital
    surplus (Notes 2 and 14)






3,247



(3,247
)














Difference between the acquisition cost and the net book value
    incurred from the capital transactions between companies under
    common control (Note 2)










(30,086
)














(30,086
)Equity in capital surplus changes of affiliates






(2,424
)


















(2,424
)Equity in other capital adjustment changes of affiliates










15,013















15,013Treasury stock (Note 16)










(26,556
)














(26,556
) F-8




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS
    EQUITY  (Continued)
  AccumulatedOther








TotalCommon


Capital


Capital


Comprehensive


Retained


Minority


StockholdersStock


Surplus


Adjustments


Income


Earnings


Interest


EquityLoss on disposal of treasury stock (Notes 16 and 17)










7,793















7,793Unrealized gain on valuation of long-term investment securities
    (Notes 2 and 4)














1,195,385











1,195,385Equity in other comprehensive income changes of affiliates, net
    (Notes 2 and 5)














(105,597
)










(105,597
)Foreign-based operations translation adjustment
    (Note 2)














4,162











4,162Gain on valuation of currency swap (Notes 2 and 27)














4,671











4,671Gain on valuation of interest rate swap (Notes 2 and 27)














2,627











2,627Increase in minority interest in equity of consolidated
    subsidiaries






















169,748



169,748Balance, December 31, 2007

W
44,639


W
2,956,106


W
(2,072,723
)

W
1,591,258


W
8,914,970


W
253,383


W
11,687,633Balance, January 1, 2008

W
44,639


W
2,924,960


W
(2,041,577
)

W
1,591,258


W
8,914,970


W
253,383


W
11,687,633Cumulative effect of change in accounting policies (Note 2)






31,146



(31,146
)














Adjusted balance, January 1, 2008


44,639



2,956,106



(2,072,723
)


1,591,258



8,914,970



253,383



11,687,633Cash dividends (Note 20)


















(609,711
)






(609,711
)Interim dividends (Note 20)


















(72,793
)






(72,793
)Net income


















1,215,719



(243,381
)


972,338Conversion of convertible bonds (Notes 9 and 16)






1,544



















1,544Difference between the acquisition cost and the net book value
    incurred from the capital transactions between companies under
    common control (Note 2)










(75,329
)














(75,329
)Equity in capital surplus changes of affiliates






481



















481Equity in other capital adjustment changes of affiliates










2,706















2,706Treasury stock (Note 16)






723



(14,137
)














(13,414
)Loss on disposal of treasury stock (Notes 16 and 17)










94















94Unrealized loss on valuation of long-term investment securities
    (Notes 2 and 4)














(1,216,771
)










(1,216,771
)Equity in other comprehensive income changes of affiliates, net
    (Notes 2 and 5)














(70,490
)










(70,490
)Foreign-based operations translation adjustment
    (Note 2)














60,262











60,262Gain on valuation of currency swap (Notes 2 and 27)














20,360











20,360Gain on valuation of interest rate swap (Notes 2 and 27)














(28,427
)










(28,427
)Increase in minority interest in equity of consolidated
    subsidiaries






















1,165,957



1,165,957Balance, December 31, 2008

W
44,639


W
2,958,854


W
(2,159,389
)

W
356,192


W
9,448,185


W
1,175,959


W
11,824,440 F-9




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS
    EQUITY  (Continued)
  AccumulatedOther








TotalCommon


Capital


Capital


Comprehensive


Retained


Minority


StockholdersStock


Surplus


Adjustments


Income


Earnings


Interest


Equity(In thousands of U.S. dollars) (Note 2 a)Balance, January 1, 2008

$
35,372


$
2,317,718


( $
1,617,731
)

$
1,260,902


$
7,064,160


$
200,778


$
9,261,199Cumulative effect of change in accounting policies (Note 2)






24,680



(24,680
)














Adjusted balance, January 1, 2008


35,372



2,342,398



(1,642,411
)


1,260,902



7,064,160



200,778



9,261,199Cash dividends (Note 20)


















(483,131
)






(483,131
)Interim dividends (Note 20)


















(57,680
)






(57,680
)Net income


















963,327



(192,853
)


770,474Conversion of convertible bonds (Notes 9 and 16)






1,223



















1,223Difference between the acquisition cost and the net book value
    incurred from the capital transactions between companies under
    common control (Note 2)










(59,690
)














(59,690
)Equity in capital surplus changes of affiliates






381



















381Equity in other capital adjustment changes of affiliates










2,143















2,143Treasury stock (Note 16)






573



(11,201
)














(10,628
)Loss on disposal of treasury stock (Notes 16 and 17)










74















74Unrealized loss on valuation of long-term investment securities
    (Notes 2 and 4)














(964,161
)










(964,161
)Equity in other comprehensive income changes of affiliates, net
    (Notes 2 and 5)














(55,856
)










(55,856
)Foreign-based operations translation adjustment
    (Note 2)














47,751











47,751Gain on valuation of currency swap (Notes 2 and 27)














16,133











16,133Gain on valuation of interest rate swap (Notes 2 and 27)














(22,525
)










(22,525
)Increase in minority interest in equity of consolidated
    subsidiaries






















923,897



923,897Balance, December 31, 2008

$
35,372


$
2,344,575


( $
1,711,085
)

$
282,244


$
7,486,676


$
931,822


$
9,369,604    F-10




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 YEARS
    ENDED DECEMBER 31, 2006, 2007 AND 2008
  2006


2007


2008


2008In millions of Korean Won


In thousands ofU.S. Dollars(Note 2a)CASH FLOWS FROM OPERATING ACTIVITIES:Net Income:

W
1,449,552


W
1,562,265


W
972,338


$
770,474Expenses not involving cash payments:Provision for severance indemnities


47,370



44,233



93,094



73,767Depreciation and amortization


1,698,364



1,971,327



2,759,276



2,186,431Allowance for doubtful accounts


86,321



58,272



73,325



58,102Foreign currency translation loss


1,106



9,411



132,162



104,724Loss on valuation of short-term investment securities






1,203



8,358



6,623Equity in losses of affiliates


211,464



175,474



54,268



43,002Impairment loss on investment securities


27,696



5,466



223,207



176,868Loss on disposal of investment assets


6,096



1,190



12,148



9,626Loss on disposal of property, equipment and intangible assets


17,148



30,680



70,314



55,716Loss on disposal of consolidated subsidiaries










724



574Impairment loss on assets


7,030



10,634



14,754



11,691Loss on transaction and valuation of currency swap


9,258



33,876



441,207



349,609Loss on transaction of interest rate swap










48



38Amortization of discounts on bonds and other


51,077



47,640



46,586



36,915Loss from discontinued operation






50,101



20,209



16,013Sub-total


2,162,930



2,439,507



3,949,680



3,129,699Income not involving cash receipts:Foreign translation gain


924



5,373



428,575



339,600Reversal of allowance for doubtful accounts


789



614



2,084



1,651Equity in earnings of affiliates


45,787



247,382



24,894



19,726Gain on valuation of trading securities






128







Gain on disposal of investment assets


27,490



3,721



17,409



13,795Gain on disposal of consolidated subsidiaries


1,556











Gain on disposal of property, equipment and intangible assets


4,507



9,776



10,000



7,924Gain on transactions and valuation of currency swap


16,660



10,799



265,142



210,097Gain on transactions of interest rate swap










2



2Gain on conversion of convertible bond






373,140







Gain on repayment of bonds






6,160







Gain on disposal of other non-current assets and other


3,075



13,623



6,036



4,782Sub-total


100,788



670,716



754,142



597,577Changes in assets and liabilities related to operating
    activities :Accounts receivable  trade


(161,914
)


43,020



72,097



57,129Accounts receivable  other


57,253



372,778



(383,668
)


(304,016
)Inventories


(9,145
)


(8,895
)


(66,166
)


(52,429
)Prepaid expenses


61,148



67,669



8,841



7,006Advanced payments and other


5,865



(16,248
)


(59,552
)


(47,189
)Long-term accounts receivables  other










514



407Accounts payable


161,611



(33,475
)


(104,300
)


(82,647
)Income taxes payable


(44,637
)


(21,791
)


118,011



93,511Accrued expenses


37,985



(9,723
)


405,084



320,986Withholdings


123,003



(111,918
)


70,400



55,784Current portion of subscription deposits


885



(8,220
)


(1,113
)


(882
)Advance receipts and other


21,585



21,832



(20,367
)


(16,138
)Deferred income taxes


(76,423
)


121,681



(194,865
)


(154,410
)Dividends received from affiliates


1,318



2,184



1,214



962Severance indemnity payments


(262,948
)


(13,732
)


(107,037
)


(84,815
)Deposits for group severance indemnities and other


162,545



(14,518
)


(610,031
)


(483,384
)Sub-total


78,131



390,644



(870,938
)


(690,125
)Net Cash Provided by Operating Activities


3,589,825



3,721,700



3,296,938



2,612,471 F-11




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS  (Continued)
  2006


2007


2008


2008In millions of Korean Won


In thousands ofU.S. Dollars(Note 2a)CASH FLOWS FROM INVESTING ACTIVITIES:Cash inflows from investing activities:Decrease in short-term investment securities, net

W
80,061


W
28,852


W



$
Decrease in short-term financial instruments, net


4,470







174,441



138,226Collection of short-term loans


69,892



119,608



215,074



170,423Decrease in long-term financial instruments


2



2,118



16,159



12,804Collection of long-term loans


654



3,652



10,646



8,436Proceeds from sales of long-term investment securities


305,953



4,804



386,740



306,450Proceeds from sales of equity securities accounted for using the
    equity method


80,014



20,258



8,292



6,571Proceeds from disposal of consolidated subsidiary


39,062











Decrease in guarantee deposits


71,164



32,594



26,361



20,888Decrease in other non-current assets


19,940



30,444



40,913



32,419Proceeds from disposal of property and equipment


14,353



30,429



45,533



36,080Proceeds from disposal of intangible assets


1,630



6,739



9,496



7,525Cash inflows from transaction of currency swap






17,242



727



576Sub-total


714,195



296,740



934,382



740,398Cash outflows from investing activities:Increase in short-term financial instruments, net

W
10,091


W
7,822


W



$
Increase in short-term investment securities, net










40



32Increase in short-term loans


92,753



104,674



239,414



189,710Increase in long-term financial instruments






652



6,086



4,823Acquisition of long-term investment securities


1,127,396



371,394



31,420



24,897Increase in long-term loans


12,623



100,006



35,290



27,964Acquisition of equity securities accounted for using the equity
    method


244,333



76,629



601,066



476,281Increase in equity of consolidated subsidiaries


27,406



12,514



1,093,104



866,168Increase in guarantee deposits


30,290



31,056



57,287



45,394Increase in other non-current assets


132,349



78,853



96,303



76,308Acquisition of property and equipment


1,498,142



1,804,148



2,236,930



1,772,528Acquisition of intangible assets


73,964



115,102



149,341



118,337Cash outflows from transaction of currency swap






8,769



263,495



208,792Sub-total


3,249,347



2,711,619



4,809,776



3,811,234Net Cash Used in Investing Activities


(2,535,152
)


(2,414,879
)


(3,875,394
)


(3,070,836
)CASH FLOWS FROM FINANCING ACTIVITIES:Cash inflows from financing activities:Issuance of bonds payable

W
384,990


W
761,117


W
1,307,679


$
1,036,196Proceeds from short-term borrowings


51,230



35,946



472,958



374,769Proceeds from long-term borrowings


294,800







510,577



404,578Increase in guarantee deposits received and other


3,370



2,327



4,532



3,591Proceeds from disposal of treasury stock






45,133



42,246



33,475Cash inflows from transaction of currency swap






2,901







Increase in equity of consolidated subsidiaries


19,050



4,677



64,402



51,032Sub-total


753,440



852,101



2,402,394



1,903,641Cash outflows from financing activities:Repayment of current portion of long-term debt


815,287



907,176



558,107



442,240Repayment of short-term borrowings






86,561







Repayment of long-term borrowings


404



93,336



193,400



153,250Repayment of bonds payable


1,230



61,306







Payment of dividends


662,815



581,309



682,504



540,811Decrease in subscription deposits


2,630



14,714







Cash outflows from transaction of currency swap






11,838







Acquisition and retirement of treasury stock


209,078



118,512



63,538



50,347 F-12




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS  (Continued)
  2006


2007


2008


2008In millions of Korean Won


In thousands ofU.S. Dollars(Note 2a)Decrease in equity of consolidated subsidiaries






6,607



24,863



19,701Other


14,374



11,997



10,567



8,374Sub-total


1,705,818



1,893,356



1,532,979



1,214,723Net Cash Provided by (Used in) Financing Activities


(952,378
)


(1,041,255
)


869,415



688,918THE EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
    HELD IN FOREIGN CURRENCIES (Note 2)


(9,317
)


6,097



37,371



29,613NET INCREASE IN CASH AND CASH EQUIVALENTS DUE TO CHANGES IN
    CONSOLIDATED SUBSIDIARIES


14,568



102,079



36,413



28,853PRE ACQUISITION CASH FLOWS OF SUBSIDIARIES






(11,396
)


17,250



13,669INCREASE IN CASH AND CASH EQUIVALENTS DUE TO MERGER






50,448







CASH FLOWS FROM DISCONTINUED OPERATION (Note 2)






(12,777
)


(256,515
)


(203,261
)NET INCREASE IN CASH AND CASH EQUIVALENTS


107,546



400,017



125,478



99,427CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR (Note 29)


378,426



485,972



885,989



702,052CASH AND CASH EQUIVALENTS AT END OF THE YEAR (Note 29)

W
485,972


W
885,989


W
1,011,467


$
801,479    F-13




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 YEARS
    ENDED DECEMBER 31, 2006, 2007 AND 2008
  1.
    GENERAL    Percentage ofNumber of


Total SharesShares


Issued (%)SK Group


18,748,452



23.09POSCO


2,341,569



2.88Institutional investors and other minority stockholders


51,395,994



63.30Treasury stock


8,707,696



10.7381,193,711



100.00   2.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES    a. Basis
    of Presentation
    W
  b. Principles
    of Consolidation
   F-14




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  W
  Year of




Ownership Percentage (%)Subsidiary

Establishment


Primary Business

2006


2007


2008SK Broadband Co., Ltd. (formerly hanarotelecom incorporated)


1997


Telecommunication services


4.8



4.8



43.42SK Communications Co., Ltd.


1999


Internet website services


87.08



65.71



65.71SK Telink Co., Ltd.


1998


Telecommunication services


90.77



90.77



90.77SK Wyverns Baseball Club Co., Ltd.


2000


Business related sports


99.99



99.99



99.99PAXNet Co., Ltd.


1999


Internet website services


59.74



59.74



59.74F&U Credit information Co., Ltd. (formerly Global Credit
    & information Corp)


1998


Credit and collection services


50.00



50.00



50.00Loen Entertainment, Inc. (formerly Seoul Records, Inc.)


1982


Release of music disc


60.00



60.00



63.48TU Media Corp.


2003


Satellite broadcasting services


29.58



32.70



44.15IHQ, Inc.


1962


Business related entertainment


34.08



37.09



37.09Ntreev Soft Co., Ltd.


2003


Game software


51.00



66.70



63.70Commerce Planet Co., Ltd.


1997


Online shopping mall operation agency






100.00



100.00The First Music Investment Fund of SK-PVC


2005


Investment association


99.00



99.00



99.00The Second Music Investment Fund of SK-PVC


2005


Investment association


99.00



99.00



99.00SK-KTB Music Investment Fund


2005


Investment association


99.00



99.00



99.00IMM Cinema Fund


2005


Investment association


60.84



72.24



72.24Michigan Global Cinema Fund


2006


Investment association


36.36



45.45



45.45SK i-media Co., Ltd.


2006


Game software


60.00



60.00



100.00CU Media, Inc. (formerly YTN Media, Inc)


2000


Broadcasting services


51.42



51.42



52.52Konan Technology


1999


Multimedia contents


7.51



29.49



29.49Broadband Media Co., Ltd. (formerly hanaromedia incorporated)


1997


Multimedia contents










100.00HanaroDream Incorporated


2001


Internet website services










36.03Broadband D&M Co., Ltd. (formerly hanaro Realty
    Development & Management Co., Ltd.)


1998


Facilities Maintenance










100.00Broadband CS Co., Ltd. (formerly hanaro Customer Service, Inc.)


1998


Telemarketing Service










100.00Etoos Co., Ltd.


2008


Internet Education Service










100.00K-net Culture
    and Contents Venture Fund


2008


Investment association










59.00Benex Digital Cultural Contents Fund


2008


Investment association










39.84Benex Focus Limited Partnership II


2008


Investment association










66.67Open Innovation Fund


2008


Investment association










98.52SK Telecom China Co., Ltd.


2002


Telecommunication services


100.00



100.00



100.00ULand Company Ltd.


2004


Telecommunication services


100.00



100.00



100.00SKT Vietnam PTE., Ltd.


2000


Telecommunication services


73.32



73.32



73.32SKT Americas, Inc. (formerly SK Telecom International Inc.)


1995


Internet website services


100.00



100.00



100.00SK Telecom Advanced Tech & Service Center


2006


Mobile handset services


100.00



100.00



100.00Cyworld China Holdings Limited


2006


Internet website services






100.00



100.00SK Telecom China Holdings Co., Ltd.


2007


Internet website services






100.00



100.00Centurion IT Investment Association


2001


Investment association


37.50







SK Telecom USA Holdings, Inc.


2005


Telecommunication services


100.00



100.00



Helio, Inc & LLC


2005


Mobile handset services


48.08



64.86



AirCross Co., Ltd.


2000


Advertising agency


38.10



100.00



SK Cyberpass, Inc.


2001


International telephone call services


70.54



70.54



  F-15




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      W
        K-net Culture
  W
    W
    c. Use
    of Estimates
   F-16




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    d. Cash
    Equivalents
    e. Allowance
    for Doubtful Accounts
      2006


2007


2008Beginning balance

W
133,499


W
106,737


W
93,551Write-offs


(90,780
)


(90,475
)


(50,065
)Net


42,719



16,262



43,486Provision for doubtful accounts receivable-trade


61,457



48,835



62,973Provision for doubtful accounts receivable-trade for the
    discontinued operation






22,604



Increase (decrease) due to the changes in consolidated
    subsidiaries


2,561



5,850



43,861End of year

W
106,737


W
93,551


W
150,320   f. Inventories
    Assets

MethodsE-commerce
    inventories

Moving average methodReplacement units for wireless telecommunication facilities and
    supplies for sales promotion

Moving average methodWireless device

FIFOBooks and CDs

FIFO   W W W
  g. Securities
    (excluding securities accounted for using the equity method of
    accounting)
   F-17




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            h. Equity
    Securities Accounted for Using the Equity Method of
    Accounting
       F-18




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  i. Troubled
    Debt Restructuring
    j. Valuation
    of Long-term Accounts Receivable  Other
    k. Property
    and Equipment
      Assets

Depreciation Method

Useful Lives (Years)Buildings and structures

Declining balance method (straight-line method)


15
    ~
    50Machinery

Declining balance method


3
    ~
    9Other

Declining balance method


3
    ~
    5     l. Intangible
    Assets
      m. Government
    Subsidy
   F-19




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  n. Impairment
    Losses
    o. Convertible
    Bonds and Bonds with Stock Purchase Warrants
    p. Discounts
    on Bonds
    q. Valuation
    of Long-term Payables
    r. Provisions,
    Contingent Liabilities and Contingent Assets
      
    Possible obligations related to past events, for which the
    existence of a liability can only be confirmed upon occurrence
    of uncertain future event or events outside the control of the
    Company.
    Present obligations arising from past events or transactions,
    for which i) a disbursement of economic resources to
    fulfill such obligations is not probable or ii) a
    disbursement of economic resources is probable, but the related
    amount cannot be reasonably estimated.   F-20




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  s. Accrued
    Severance Indemnities
    W W W
  W W W
  W
  W
    2006


2007


2008Beginning net balance

W
71,284


W
22,284


W
44,322Provision


47,370



44,233



93,094Payments to employees


(262,948
)


(13,732
)


(107,037
)Net increase due to the changes in consolidated subsidiaries


4,010



6,291



44,718Changes in deposits for severance indemnities


162,568



(14,754
)


(21,282
)Ending net balance

W
22,284


W
44,322


W
53,815Ending balance :Accrued severance indemnities

W
51,243


W
90,286


W
122,401Deposits with insurance companies


(28,868
)


(45,878
)


(68,559
)National Pension Fund


(91
)


(86
)


(27
)Net balance

W
22,284


W
44,322


W
53,815  F-21




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  t. Accounting
    for Leases
    
    The lease transfers ownership of the asset to the lessee by the
    end of the lease term;
    The lessee has the option to purchase the asset at a bargain
    price and it is certain that the option will be exercised;
    The lease term is for the major part (75% or more) of the
    economic life of the asset even if title is not transferred;
    At the date of lease commencement, the present value of the
    minimum lease payments amounts to at least substantially all
    (90% or more) of the fair value of the leased asset; or
    The leased assets are of such a specialized nature that only the
    lessee can use them without major modifications.      u. Research
    and Development Costs
  W W W W W W
  v. Foreign-based
    Operations Translation Adjustment
    w. Accounting
    for Foreign Currency Transactions and Translation
  W W W
 F-22




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  x. Derivative
    Instruments
    y. Revenue
    Recognition
          z. Income
    Taxes
      aa. Net
    Income Per Share
    ab. Handset
    Subsidies to Long-term Mobile Subscribers
   F-23




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    ac. Use
    of Estimates
    ad. Reclassification
    ae. Adoption
    of New Statements of Korea Accounting Standards
    (SKAS)
      
    Pursuant to adoption of SKAS No. 21, Preparation and
    Presentation of Financial Statements, certain amounts
    classified as capital adjustments through 2006 are classified as
    accumulated other comprehensive income (loss); such amounts
    include unrealized gain/loss on available-for-sale securities,
    equity in capital adjustments of affiliates and gain/loss on
    valuation of derivative instruments. In addition, certain
    amounts classified as investment assets through 2006 are
    classified as other non-current assets; such amounts include
    long-term loans, guarantee deposits, long-term deposits and
    others. The accompanying consolidated balance sheets as of
    December 31, 2005 and 2006, which are comparatively
    presented, were reclassified in accordance with SKAS No. 21.
    Pursuant to adoption of SKAS No. 25, Consolidated
    Financial Statements, net income is allocated to majority
    interest and minority interest. In addition, when a subsidiary
    is purchased during the year, statement of income of the
    subsidiary is included in the consolidation as though it had
    been acquired at the beginning of the year, and pre-acquisition
    earnings are presented as deduction at the bottom of the
    consolidated statements of income. The accompanying consolidated
    statements of income for the years ended December 31, 2005
    and 2006, which are comparatively presented, were reclassified
    in accordance with SKAS No. 25. In addition, in connection
    with the Companys adoption of SKAS No. 25, the
    Company also begun to present pre-acquisition cash flows of
    subsidiaries as a separate deduction (addition) at the bottom of
    the Companys consolidated statements of cash flows.
    There is no significant change due to the adoption of SKAS
    No. 11, No. 22 and No. 23.   F-24




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  W W W W
  af. Discontinued
    Operation
        2006


2007


2008Revenue

W



W
154,805


W
116,607Operating Expense






(446,348
)


(230,478
)Other Income (expense)






(603
)


(15,917
)Income tax benefit










109,579Preacquisition net loss for subsidiary






242,045



Net loss





W
(50,101
)

W
(20,209
)     2006


2007


2008Operating Activities

W



W
(38,749
)

W
(213,899
)Investing Activities






(1,832
)


(51,631
)Financing Activities






27,804



9,015Net

W



W
(12,777
)

W
(256,515
)   W W
 F-25




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  3.
    INVENTORIES    2006


2007


2008Merchandise

W
1,167


W
42,787


W
17,032Finished goods


2,282



4,054



4,079Semi-finished goods


41



706



509Raw materials


313



165



13Supplies


16,782



3,733



14,105Total


20,585



51,445



35,738Less allowance for valuation loss


(807
)


(4,393
)


(764
)Net

W
19,778


W
47,052


W
34,974   4.
    INVESTMENT
    SECURITIES  a.  Short-term
    Investment Securities
    Acquisition Cost


Fair Valueat December 31,


at December 31,


Carrying Amount2008


2008


2006


2007


2008Trading securities(Note)

W
376,563


W
367,001


W
665,312


W
635,434


W
367,001Current portion of long-term investment securities


7,545



5,912



335



101,209



5,912Total

W
384,108


W
372,913


W
665,647


W
736,643


W
372,913     (Note)
    
    The Companys trading securities are all beneficiary
    certificates as of December 31, 2008, and the difference
    between the fair value and acquisition cost was recorded in
    other expenses as loss on valuation of short-term investment
    securities.  b.  Long-term
    Investment Securities
    2006


2007


2008Available-for-sale equity securities

W
1,011,971


W
4,689,905


W
3,102,833Available-for-sale debt securities


1,463,636



469,729



8,261Held-to-maturity securities


146



94



113Total


2,475,753



5,159,728



3,111,207Less current portion


(335
)


(101,209
)


(5,912
)Long-term portion

W
2,475,418


W
5,058,519


W
3,105,295  F-26




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  b-(1).  Available-for-sale
    Equity Securities
    December 31, 2008


Carrying AmountOwnershipNumber


Percentage


Acquisitionof Shares


(%)


Cost


Fair Value


2006


2007


2008(Investments in listed companies)Digital Chosunilbo Co., Ltd.


2,890,630



7.8


W
5,781


W
5,636


W
5,897


W
8,629


W
5,636SK Broadband Co., Ltd. (formerly hanarotelecom incorporated)














(note a
)


88,581



116,525



KRTnet Corporation


234,150



4.4



1,171



1,098



2,517



2,470



1,098POSCO


2,481,310



2.8



332,662



942,898



766,725



1,426,753



942,898DAEA TI Co., Ltd. (formerly Comas Interactive Co., Ltd.)


99,120



0.2



1,695



89



83



228



89Extended Computing Environment Co., Ltd.


133,333



3.0



10



40



876



905



40nTels Co., Ltd.


205,200



6.2



34



504



34



1,525



504Qualcomm Inc.


55,805



0.1



2,756



2,514







2,060



2,514China Unicom Ltd. (note b)


899,745,075



3.8



1,333,009



1,357,648







1,936,840



1,357,648LG Powercomm Co., Ltd. (note c)


6,066,666



4.6



241,243



39,433



80,370



89,422



39,433ZeroOne Interactive Co.,Ltd.(note d)


















3,845



2,770



T-Entertainment Co., Ltd.


1,026,695



6.2



2,500



1,355







1,817



1,355HB Entertainment Co., Ltd.


















1,137







De Chocolate E&TF Co., Ltd.


709,219



2.7



1,000



660











660C.C.S. Inc.


29,696



0.6



414



249











249Medifron DBT Co., Ltd.


170,525



0.9



328



246











246sub-total










1,922,603



2,352,370



950,065



3,589,944



2,352,370(Investments in non-listed companies)SK C&C Co., Ltd. (note e)


6,000,000



30.0



501,652



676,716







1,037,604



676,716Eonex Technologies Inc.


144,000



12.3



3,600



(note f
)


4,593



4,593



The Korea Economic Daily


2,585,069



13.8



13,964



(note g
)


13,964



13,964



13,964Dreamline Corp.


1,520,373



8.9



16,160



(note h
)










8,519Cheongsol


216,400



7.1



4,494



(note g
)


5,000



5,000



4,494Other










148,928



(note f, g
)


34,333



20,611



24,329sub-total










688,798







57,890



1,081,772



728,022(Investments in funds)Others










22,441



(note f
)


4,016



18,189



22,441sub-total










22,441







4,016



18,189



22,441Total









W
2,633,842






W
1,011,971


W
4,689,905


W
3,102,833     (note a)
    the first quarter of 2008, the Company acquired additional
    91,406,249 shares of SK Broadband Co., Ltd. (formerly
    hanarotelecom incorporated) common stock which increased the
    Companys ownership from 4.6% to 43.4%. As the
    Companys ownership in such investees increased to more
    than 20% and the Company can exercise significant influence, the
    investment in common stock of SK Broadband Co., Ltd. was
    included in the consolidation of accompanying financial
    statement.(note b)
    In accordance with the resolution of the Companys board of
    directors on August 20, 2007, convertible bonds of China
    Unicom Ltd. were converted into common stock and reclassified to
    available-for sale equity securities from available-for-sale
    debt securities. And, the related gain on conversion of
    convertible bonds of W373,140 million was
    recorded during the year ended December 31, 2007.(note c)
    As the common stocks of LG Powercomm Co., Ltd. were listed on
    the stock Market of Korea Exchange during the year ended
    December 31, 2008, the Company recorded the investment at
    its market value as of December 31, 2008. In addition, as
    the difference between the market value and carrying value of
    the F-27




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  investments is material and the market value is significantly
    less than the acquisition cost over the long-term period, the
    Company recorded W201,243 million of
    impairment loss on investment securities during the year ended
    December 31, 2008.  (note d)
    During the year ended December 31, 2008, SK-KTB Music
    Investment Fund, a subsidiary of the Company, sold 2,472,999
    common shares of ZeroOne Interactive Co.,Ltd.(note e)
    The investment in common stock of SK C&C Co., Ltd. was
    reclassified to available-for-sale securities from equity
    securities accounted for using the equity method during the year
    ended December 31, 2007, as SK C&C Co., Ltd. became
    the ultimate parent company of the Company. The Company recorded
    its investments in common stock of SK C&C Co., Ltd. at its
    fair value, which was estimated with the assistance of an
    outside professional valuation company using the present value
    of expected future cash flows and the unrealized gain on
    valuation of investments totals
    W501,155 million (net of tax effect of
    W190,093 million) and
    W250,413 million (net of tax effect of
    W79,947 million) as of December 31,
    2007 and 2008, respectively.  (note f)
    Due to the impairment of the investment of Eonex Technologies
    Inc. and others, the Company recorded
    W17,486 million of impairment loss during
    the year ended December 31, 2008.  (note g)
    As a reasonable estimate of fair value could not be made, the
    investment is stated at acquisition cost.(note h)
    The Company recorded its investment in common stock of Dreamline
    Corp. at its fair value (W5,603 per share)
    estimated using market approach and income approach valuation
    method and related unrealized losses on valuation of the
    investment are included in accumulated other comprehensive loss.  b-(2).  Available-for-sale
    Debt Securities
    AcquisitionCost atDecember 31,


Carrying AmountMaturity

2008


2006


2007


2008Public bonds

(note a)

W
1,260


W
51,313


W
51,353


W
1,260Currency stabilization bonds

(note b)






49,894



49,713



Closed beneficiary certificates

Oct. 20, 2009


3,501







4,788



3,551Bond-type beneficiary certificates

(note c)


3,000



5,072



360,641



1,868Convertible bonds of China Unicom Ltd.

Jul. 5, 2009






1,276,703







Convertible bonds of Eonex Technologies, Inc.

Oct. 11, 2008






1,000



1,000



Convertible bonds of Empas Corp.

Oct. 18, 2009






78,670







Others




2,134



984



2,234



1,582Total




9,895



1,463,636



469,729



8,261Less current portion of available-for-sale debt securities




(7,544
)


(256
)


(101,209
)


(5,911
)Long-term available-for-sale debt securities



W
2,351


W
1,463,380


W
368,520


W
2,350  F-28




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  W W W
    (note a)
    The maturities of public bonds as of December 31, 2008 are
    within 1 year for W159 million,
    within 5 years for W1,089 million and
    over 5 years for W12 million.(note b)
    Currency stabilization bonds were fully redeemed at their
    maturities for the year ended December 31, 2008.(note c)
    The maturities of bond-type beneficiary certificates as of
    December 31, 2008 are within 1 year.  b-(3).  Held-to-maturity
    Securities
    Acquisition Cost atDecember 31,


Carrying AmountMaturity


2008


2006


2007


2008Public bonds


(note a
)

W
113


W
146


W
94


W
113Less current portion of held-to-maturity securities










(79
)






(1
)Long-term held-to-maturity securities









W
67


W
94


W
112   W W W
    (note a)
    The maturities of public bonds as of December 31, 2008 are
    within 1 year for W1 million, within
    5 years for W51 million and within
    10 years for W61 million. F-29




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   b-(4).
    Changes in Unrealized Gains (Losses) on Valuation on Long-term
    Investment Securities
    For the Year Ended December 31, 2006MinorityTransferred


Interest in EquityBeginning


Increase/


to Realized


of Consolidated


EndingBalance


(Decrease)


Gain (Loss)


Subsidiaries


BalanceDigital Chosunilbo Co., Ltd.

W
14


W
102


W



W



W
116SK Broadband Co., Ltd. (formerly hanarotelecom incorporated)


(65,237
)


32,141











(33,096
)KRTnet Corporation


1,475



(129
)










1,346POSCO


168,563



265,500











434,063Comas Interactive Co., Ltd. (Formerly INNOTG Co., Ltd.)


(1,611
)














(1,611
)Extended Computing Environment Co., Ltd.






866











866ZeroOne Interactive Co., Ltd.






(655
)






71



(584
)HB Entertainment Co., Ltd.


56



(1,272
)






795



(421
)LG Powercomm Co., Ltd.


(163,113
)


3,240











(159,873
)Eonex Technologies Inc.


2,011















2,011Public bonds






(4
)










(4
)Currency stabilization bonds


(217
)


906



(677
)






12Convertible bonds of China Unicom Ltd.






319,648











319,648Convertible bonds of Empas Corp.






33,820







(4,218
)


29,602Sub-total


(58,059
)


654,163



(677
)


(3,352
)


592,075Less tax effect (note a)


15,966



(179,894
)


186



895



(162,847
)Total

W
(42,093
)

W
474,269


W
(491
)

W
(2,457
)

W
429,228   F-30




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  For the Year Ended December 31, 2007MinorityTransferred


Interest in EquityBeginning


Increase/


to Realized


of Consolidated


EndingBalance


(Decrease)


Gain (Loss)


Subsidiaries


BalanceDigital Chosunilbo Co., Ltd.

W
116


W
2,731


W



W



W
2,847SK Broadband Co., Ltd. (formerly hanarotelecom incorporated)


(33,096
)


27,944











(5,152
)KRTnet Corporation


1,346



(46
)










1,300POSCO


434,063



660,028











1,094,091DAEA TI Co., Ltd. (Formerly Comas Interactive Co., Ltd.)


(1,611
)


145











(1,466
)Extended Computing Environment Co., Ltd.


866



29











895nTels Co., Ltd.






1,490











1,490Qualcomm Inc. Ltd.






(696
)










(696
)China Unicom Ltd.






599,012











599,012ZeroOne Interactive Co., Ltd.


(584
)


(1,147
)






189



(1,542
)T-Entertainment Co., Ltd.






(682
)






74



(608
)HB Entertainment Co., Ltd.


(421
)


421











LG Powercomm Co., Ltd.


(159,873
)


9,053











(150,820
)SK C&C Co., Ltd.






691,248











691,248Eonex Technologies Inc.


2,011















2,011Public bonds


(4
)


(201
)










(205
)Currency stabilization bonds


12



(247
)










(235
)Convertible bonds of China Unicom Ltd.


319,648



208,095



(527,743
)






Convertible bonds of Empas Corp.


29,602







(29,602
)


137



137Beneficiary certificates






9,256







46



9,302Sub-total


592,075



2,206,433



(557,345
)


446



2,241,609Less tax effect (note a)


(162,847
)


(607,406
)


153,270



(13
)


(616,996
)Total

W
429,228


W
1,599,027


W
(404,075
)

W
433


W
1,624,613   F-31




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  For the Year Ended December 31, 2008MinorityTransferred


Interest in EquityBeginning


Increase/


to Realized


of Consolidated


EndingBalance


(Decrease)


Gain (Loss)


Subsidiaries


BalanceAvailable-for-sales securities:Digital Chosunilbo Co., Ltd.

W
2,847


W
(2,992
)

W



W



W
(145
)SK Broadband Co., Ltd. (formerly hanarotelecom incorporated)


(5,152
)






5,152







KRTnet Corporation


1,300



(1,373
)










(73
)POSCO


1,094,091



(483,855
)










610,236DAEA TI Co., Ltd. (Formerly Comas Interactive Co., Ltd.)


(1,466
)


(140
)










(1,606
)Extended Computing Environment Co., Ltd.


895



(865
)










30nTels Co., Ltd.


1,490



(1,020
)










470Qualcomm Inc. Ltd.


(696
)


454











(242
)China Unicom Ltd.


599,012



(998,891
)










(399,879
)LG Powercomm Co., Ltd.


(150,820
)


150,459







204



(157
)ZeroOne Interactive Co., Ltd.


(1,542
)






1,730



(188
)


T-Entertainment Co., Ltd.


(608
)


(462
)






50



(1,020
)De Chocolate E&TF Co., Ltd.






(341
)






214



(127
)C.C.S. Inc.






(44
)






25



(19
)Medifron DBT Co., Ltd.






(83
)






47



(36
)Dreamline Corp.






(9,162
)






5,184



(3,978
)Saeronet Broadcasting Co., Ltd.






(81
)






46



(35
)SK C&C Co., Ltd.


691,248



(360,888
)










330,360Eonex Technologies Inc.


2,011



(2,011
)










Public bonds


(205
)


205











Currency stabilization bonds


(235
)


235











Convertible bonds of Empas Corp.


137















137Beneficiary certificates


9,302



(10,656
)


133



985



(236
)Sub-total


2,241,609



(1,721,511
)


7,015



6,567



533,680Less tax effect (note a)


(616,996
)


492,830



(1,453
)


(219
)


(125,838
)Total

W
1,624,613


W
(1,228,681
)

W
5,562


W
6,348


W
407,842     (note a)
    Represents adjustments to reflect the tax effect of temporary
    differences directly charged or credited to unrealized gains
    (losses) on valuation of long-term investment securities, which
    are other comprehensive income (loss) items, in accordance with
    SKAS No. 16 Income Taxes, which is effective
    January 1, 2005. F-32




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   5.
    EQUITY
    SECURITIES ACCOUNTED FOR USING THE EQUITY METHOD    December 31, 2008Number


Ownership


Acquisition


Net Asset





Carrying Amountof Shares


Percentage (%)


Cost


Value





2006


2007


2008SK Marketing & Company Co., Ltd.


5,000,000



50.0


W
190,000


W
96,798



(note n
)

W



W



W
96,798AirCross Co., Ltd.


1,575,000



100.0



2,440



7,289



(note d
)


1,477







7,289SK C&C Co., Ltd.


















(note a
)


268,278







STIC Ventures Co., Ltd.


















(note b
)


8,611







TU Media Corp.


















(note c
)


7,214







Harex Info Tech, Inc.


225,000



21.2



3,375



245







1,805



1,118



596SK Mobile






20.0



4,930



2,110



(note e
)


4,666



3,273



2,111Skytel Co., Ltd.


1,951,777



29.3



2,159



13,858







5,823



7,743



13,858SK China Company Ltd.


94,960



29.7



6,159



4,556











137



3,577Helio, LLC & Helio, Inc.


















(note f
)


80,130







TR Entertainment


13,542,553



42.2



10,953



2,770



(note o
)










9,626Virgin Mobile USA, Inc.






16.6



72,496



(57,084
)


(note p
)










62,096SK Telecom China Holding Co., Ltd.


















(note u
)






19,070



SK USA, Inc.


49



49.0



3,184



5,249







3,016



3,141



5,249Korea IT Fund


190



63.3



190,000



210,735



(note g
)


193,061



210,568



210,735Michigan Global Cinema Fund


















(note h
)


3,773







Centurion IT Investment Association


















(note i
)






2,463



3rd Fund of Isu Entertainment


25



31.3



2,500



1,882







2,419



2,028



1,882Magic Tech Network


4,500



30.0



8,494



2,162



(note g
)










7,725SK Telecom Global Investment B.V.


18,000



100.0



26,044



31,807



(note r
)










31,807SKY Property Mgmt. Ltd.


22,980



60.0



283,368



287,006



(note s
)










287,006CDMA Mobile Phone Center






50.0



161,256



67,139







84,689



66,001



67,139Wave City Development Co., Ltd.


380,000



19.0



1,967



1,908



(note t
)










1,908SK Cyberpass, Inc.


33,196



84.9



6,372



3,809



(note m
)


1,780







4,068E-Eye High
    Tech






65.5



20,952



11,121



(note u
)










19,801Cyworld Japan Co., Ltd.


1,250,000



100.0



10,584



1,169







4,362



4,091



3,690Cyworld Incorporated


9,500,000



100.0



9,071











3,592



2,672



2,672Prmaxsoftware tech.Co.,Ltd.






89.3



7,128



7,127



(note v
)










7,127Mobile Money Ventures, LLC






50.0



8,821



5,283



(note w
)










5,283SK Telecom Holdings America, Inc.


100



100.0



12,990



12,990











4,050



12,990Benex Movie Expert Fund


810



46.6



8,100



8,045



(note x
)










8,045Empas Corp.


















(note j
)


36,474







SK i-media Co., Ltd.


















(note k
)


11,312







Ntreev Soft Co., Ltd.


















(note k
)


4,800







Konan Technology


















(note k
)


4,037







Other investment in affiliates










44,183











19,602



24,611



25,434Total









W
1,097,526










W
750,921


W
350,966


W
898,512  F-33




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (note a)

For the year ended December 31, 2007, the Companys
    shares of SK C&C Co., Ltd. were increased to
    6,000,000 shares from 300,000 shares as a result of SK
    C&C Co., Ltd.s 20 to 1 stock split. In addition, the
    investment in common stock of SK C&C Co., Ltd. was
    reclassified to
    available-for-sale
    equity securities, as SK C&C Co., Ltd. became the ultimate
    parent company of the Company by increasing its ownership
    interest in SK Holdings Co., Ltd., a split-off company from SK
    Corporation Co., Ltd. to 25.42% as of December 31, 2007.(note b)

For the year ended December 31, 2007, the Company disposed
    all of its 1,600,000 shares of STIC Ventures Co., Ltd.(note c)

TU Media Corp. was newly included in consolidation effective
    April 1, 2007 as the Companys ownership interest
    increased to 32.7% and is the largest stockholder of TU Media
    Corp.(note d)

For the year ended December 31, 2007, the Company acquired
    additional 975,000 shares of AirCross Co., Ltd. from
    WiderThan Co., Ltd. and others, which increased the
    Companys ownership interest from 38.1% to 100.0%.
    Accordingly AirCross Co., Ltd. was newly included in
    consolidation in 2007. However, for the year ended
    December 31, 2008, AirCross Co., Ltd. Was excluded from the
    consolidation and accounted for using the equity method as it
    was fully liquidated during March 2009.(note e)

On March 31, 2006, the Company acquired 42.5% interests of
    common stock of SK Mobile from Pantech Co., Ltd. and others.(note f)

In the first quarter of 2005, the Company incorporated SK
    Telecom USA Holdings, Inc. with an initial investment of
    US$83 million in order to invest and manage Helio, LLC, a
    joint venture company in the United States of America, which was
    established in order to provide wireless telecommunication
    service in the United States of America. Through
    December 31, 2007, the Company additionally invested in
    Helio, LLC and the Companys ownership interest increased
    to 64.9%. As a result, Helio, LLC became subsidiary and included
    in consolidation effective November 1, 2007.(note g)

The investment in Korea IT Fund was reclassified to equity
    securities accounted for using the equity method for the year
    ended December 31, 2006 as the Company has ability to
    exercise significant influence on the investee. In accordance
    with the Agreement of Korea IT Fund, the Company has voting
    rights of 14.3%, while the Company invested 63.3% of total
    capital contribution and has profit sharing rights of 63.3%.(note h)

As TU Media Corp. became a subsidiary of the Company during the
    year ended December 31, 2007, TU Media Corp.s
    ownership interest in Michigan Global Cinema Fund added to the
    Companys ownership interest in Michigan Global Fund for
    the calculation of controlling ownership interest. As a result,
    Michigan Global Cinema Fund was newly included in consolidation
    effective April 1, 2007.(note i)

Centurion IT Investment Association was deconsolidated as it was
    dissolved on February 2008; instead, it was accounted for using
    the equity method for the year ended December 31, 2007.(note j)

Empas Corp. was merged into SK Communications Co., Ltd. during
    the year ended December 31, 2007.(note k)

Through the year ended December 31, 2006, these investees
    were excluded from consolidation and accounted for using the
    equity method even though the Companys ownership interest
    is over majority because their total assets at the beginning of
    the fiscal year were less than W7 billion
    in accordance with Korean GAAP. However, as the investees
    total assets as of December 31, 2006 increased to more than
    W7 billion, these investees were included
    in consolidation effective January 1, 2007.(note l)

Even though the Companys ownership interest is over
    majority, these investees are excluded from the consolidation
    and accounted for using the equity method as their total assets
    at the beginning of the fiscal year were less than
    W7 billion, in accordance with Korean GAAP.(note m)

Through the year ended December 31, 2006, SK Cyberpass,
    Inc. was excluded from consolidation and accounted for using the
    equity method even though the Companys ownership interest
    is over majority because its total assets at the beginning of
    the fiscal year were less than W7 billion
    in accordance with Korean GAAP. As its total assets as of
    December 31, 2006 increased to more than
    W7 billion, these investees were included
    in consolidation effective January 1, 2008. But, as its
    total assets as of December 31, 2007 declined to below
    W7 billion, it was accounted for using the
    equity method again in 2008. F-34




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (note n)

For the year ended December 31, 2008, the Company acquired
    5,000,000 shares of SK Marketing & Company Co.,
    Ltd. As a result, the Company holds 50.0% ownership in SK
    Marketing & Company Co. Ltd.(note o)

For the year ended December 31, 2008, the Company acquired
    13,542,553 shares of TR Entertainment. As a result, the
    Company holds 42.2% ownership in TR Entertainment.(note p)

For the year ended December 31, 2008, the Company acquired
    16.6% ownership in Virgin Mobile USA Inc. The company is
    expected to exercise significant influence to Virgin Mobile USA
    Inc. as the Company has the right to nominate the director for
    the Virgin Mobile USA Inc. even though its ownership percentage
    is below 20.0%(note q)

For the year ended December 31, 2008, the Company acquired
    4,500 shares of Magic Tech Network. As a result, the
    Company holds 30.0% ownership in Magic Tech Network.(note r)

For the year ended December 31, 2008, the Company
    established in SKT Global Investment B.V. and holds 100%
    ownership for the investee. However, SKT Global Investment B.V.
    is accounted for using the equity method as its capital stock as
    of incorporation is less W7 billion.(note s)

For the year ended December 31, 2008, the Company acquired
    22,980 shares of SKY Property Mgmt Ltd. As a result, the
    Company holds 60.0% ownership for the investee. However, SKT
    Global Investment B.V. is included in the equity securities
    accounted for using the equity method as its capital as of
    incorporation is less W7 billion.(note t)

For the year ended December 31, 2008, the Company acquired
    380,000 shares of Wave City Development Co., Ltd. As a
    result, the Company holds 19.0% ownership for the investee. The
    Company is expected to exercise significant influence to Wave
    City Development Co., Ltd. as the Company have the right to
    nominate the director for the Wave City Development Co., Ltd.
    even though its ownership percentage is less than 20.0%.(note u)

E-Eye High
    Tech whose total assets are less
    W7 billion as of December 31, 2007 is
    included in the equity securities accounted for using the equity
    method as SK Telecom China Holding Co., Ltd., a subsidiary of
    the Company and parent company of
    E-Eye High
    Tech, is included in the consolidation for the year ended
    December 31, 2008 as its total assets as of
    December 31, 2007 was over W7 billion.(note v)

For the year ended December 31, 2008, the Company acquired
    89.3% of equity interest in Prmaxsoftware tech.Co.,Ltd. which is
    accounted for using the equity method as their total assets at
    the beginning of the fiscal year were less than
    W7 billion.(note w)

SKT America, Inc. (formerly SK Telecom International Inc.), a
    wholly-owned subsidiary of the Company, acquired 50.0% of equity
    interest in Mobile Money Ventures, LLC for the year ended
    December 31, 2008.(note x)

For the year ended December 31, 2008, the Company acquired
    810 shares of Benex Movie Expert Fund. As a result, the
    Company holds 46.6% ownership for the investee.  F-35




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    For the Year Ended December 31, 2006Equity inCapitalSurplus andEquity in


Other





OtherBeginning





Earnings


Comprehensive


Dividend


Increase


EndingBalance


Acquisition


(Losses)


Income


Received


(Decrease)


BalancePantech Co., Ltd.

(note a)

W
55,732


W



W
(55,902
)

W
170


W



W



W
SK C&C Co., Ltd.

(note b)


168,244







37,825



63,199



(990
)






268,278STIC Ventures Co., Ltd.




8,379







845



(613
)










8,611TU Media Corp.




32,343







(25,129
)














7,214AirCross Co., Ltd.




966







511















1,477WiderThan Co., Ltd.

(note c)


11,503



















(11,503
)


IHQ, Inc.




14,755







(1,346
)


84







(13,493
)


Harex Info Tech, Inc.




2,530







(725
)














1,805SK Mobile








10,322



(5,520
)


(136
)










4,666Skytel Co., Ltd.

(note b)


4,786







1,970



(605
)


(328
)






5,823SK China Company Ltd.




485







(380
)


(105
)










Helio, LLC & Helio, Inc.

(note d)


102,272



76,933



(88,309
)










(10,766
)


80,130SK USA, Inc.




3,279







7



(270
)










3,016Korea IT Fund

(note e)










2,339



722







190,000



193,061Michigan Global Cinema Fund




4,000







(227
)














3,7733rd Fund of Isu Entertainment




2,500







(81
)














2,419SKT-HP Ventures, LLC

(note f)


5,290



















(5,290
)


CDMA Mobile Phone Center

(note g)


40,810



76,039



(21,474
)










(10,686
)


84,689Empas Corp.








37,092



(1,369
)


751











36,474SK i-media Co., Ltd.








12,000



(636
)


(52
)










11,312Cyworld Japan Co., Ltd.




726



6,118



(2,549
)


67











4,362Etoos Group Inc.

(note h)


2,586







(259
)










(2,327
)


Cyworld Incorporated




524



8,547



(5,358
)


(121
)










3,592Other investments in affiliates




10,169



17,282



90



(640
)






3,318



30,219W
471,879


W
244,333


W
(77,368
)

W
62,451


W
(1,318
)

W
139,253


W
750,921     (note a)

Pantech Co., Ltd. suffered a significant loss due to
    deterioration of its liquidity during the fourth quarter of
    2006, which resulted in the Companys investments in
    Pantech Co., Ltd. to be reduced to zero. Equity in losses of
    affiliates that exceeded the carrying amount was
    W43,543 million for the year ended
    December 31, 2006.(note b)

The Company received dividends from SK C&C Co., Ltd. and
    Skytel Co., Ltd. and the corresponding amount was deducted from
    its equity method securities.(note c)

The Company sold all of investments in equity securities of
    WiderThan Co., Ltd. for the year ended December 31, 2006
    and recognized gains on disposal of investment in equity
    securities of W21,780 million.(note d)

Other decrease in investments in equity securities of Helio,
    Inc. represents losses from disposal of investments in equity
    securities of Helio, Inc. amounting to
    W1,991 million resulting from the dilution
    of the Companys ownership as a result of the fact that
    investee sold its unissued shares to third parties directly, and
    translation loss of W8,776 million
    incurred from translating the foreign currency financial
    statements of Helio, Inc. into Korean won. F-36




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (note e)

Other increase in investments in Korea IT Fund is the carrying
    amount transferred from
    available-for-sale
    equity securities.(note f)

Investment was fully liquidated due to dissolution of SKT-HP
    Ventures, LLC for the year ended December 31, 2006.(note g)

For the year ended December 31, 2006, SLD received a cash
    distribution of W5,978 million from CDMA
    Mobile Phone Center, and such reimbursement decreased SLDs
    investment in CDMA Mobile Phone Center. The amount was
    equivalent to the depreciation from the contributed machinery
    provided to CDMA Mobile Phone Center as an in-kind contribution
    from SLD. In addition, translation loss of
    W4,708 million incurred from translating
    the foreign currency financial statements of SLD Telecom PTE
    Ltd. into Korean won and such translation loss was accounted for
    as a decrease in the investment in CDMA Mobile Phone Center.(note h)

For the year ended December 31, 2006, Etoos Group Inc. was
    merged into SK Communications Co., Ltd., the Companys
    subsidiary.   F-37




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  For the Year Ended December 31, 2007Equity inCapitalSurplus andEquity in


Other





OtherBeginning





Earnings


Comprehensive


Dividend


Increase


EndingBalance


Acquisition


(Losses)


Income


Received


(Decrease)


BalanceSK C&C Co., Ltd.

(notes a and d)

W
268,278


W



W
230,252


W
4,381


W
(1,260
)

(W
501,651
)

W
STIC Ventures Co., Ltd.




8,611











(238
)






(8,373
)


TU Media Corp.

(note b)


7,214







(5,879
)










(1,335
)


AirCross Co., Ltd.

(note c)


1,477







(95
)










(1,382
)


Harex Info Tech, Inc.




1,805







(687
)














1,118SK Mobile




4,666







(1,678
)


285











3,273Skytel Co., Ltd.

(note d)


5,823







2,562



12



(654
)






7,743SK China Company Ltd.












54



83











137Helio, Inc. & Helio, LLC

(note e)


80,130



18,527



(116,725
)


(38
)






18,106



SK USA, Inc.




3,016







96



29











3,141Korea IT Fund




193,061







14,383



3,124











210,568Michigan Global Cinema Fund

(note f)


3,773



















(3,773
)


3rd Fund of Isu Entertainment

(note g)


2,419







(891
)










500



2,028Centurion IT Investment Association












35



777







1,651



2,463CDMA Mobile Phone Center

(note h)


84,689



12,094



(20,651
)










(10,131
)


66,001Empas Corp.

(note i)


36,474







(6,397
)


24







(30,101
)


SK i-media Co., Ltd.

(note j)


11,312



















(11,312
)


Cyworld Japan Co., Ltd.




4,362







(391
)


120











4,091Cyworld Incorporated

(note k)


3,592







(4,052
)














2,672SK Telecom China Holding Co., Ltd.








19,070



















19,070Ntreev Soft Co., Ltd.

(note j)


4,800



















(4,800
)


Konan Technology

(note l)


4,037







(109
)


8







(3,936
)


SK Cyberpass, Inc.

(note j)


1,780



















(1,780
)


Cyworld Europe GmbH

(note m)


512



3,696



(4,208
)














Cyworld China (Holdings) Ltd.

(note m)






8,467



(8,467
)














Other investment in affiliates

(note m)


19,090



14,775



(5,244
)


176



(268
)


132



28,661W
750,921


W
76,629


W
71,908


W
8,744


W
(2,182
)

W
(558,185
)

W
350,966     (note a)

The investment in SK C&C Co., Ltd. was reclassified to
    available-for-sale
    security during the fourth quarter of 2007 as it became the
    ultimate parent company of the Company.(note b)

TU Media Corp. was included in the consolidation of accompanying
    consolidated financial statements effective April 1, 2007,
    as the Company acquired additional equity of TU Media Corp. in
    February 2007. F-38




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (note c)

AirCross Co., Ltd. was included in the consolidation of
    accompanying consolidated financial statements effective
    April 1, 2007, as the Company acquired additional equity of
    AirCross Co., Ltd. in March 2007.(note d)

The Company received dividends from SK C&C Co., Ltd. and
    Skytel Co., Ltd.; the corresponding amount was deducted from its
    equity method securities.(note e)

Helio, Inc. & Helio LLC was included in the consolidation
    of accompanying consolidated financial statements effective
    November 2007, as the Company acquired additional equity of
    Helio, LLC during the fourth quarter of 2007.(note f)

As TU Media Corp. who had certain ownership interest of Michigan
    Global Cinema Fund became a subsidiary of the Company in
    February 2007, the Company became the largest stockholder owning
    more than 30% of total outstanding common stock of Michigan
    Global Cinema Fund and included Michigan Global Cinema Fund in
    the consolidation of accompanying consolidated financial
    statements effective April 1, 2007.(note g)

Other increase in investments in equity securities of 3rd Fund
    of Isu Entertainment resulted from additional investment by TU
    Media Corp..(note h)

For the year ended December 31, 2007, SKT Vietnam PTE Ltd.
    (formerly SLD Telecom PTE Ltd.) received a cash distribution of
    W10,728 million from CDMA Mobile Phone
    Center, and such reimbursement decreased SKT Vietnam PTE
    Ltds investment in CDMA Mobile Phone Center. The amount
    was equivalent to the depreciation from the contributed
    machinery provided to CDMA Mobile Phone Center as an in-kind
    contribution from SKT Vietnam PTE Ltd. In addition, translation
    gain of W597 million incurred from
    translating the foreign currency financial statements of SKT
    Vietnam PTE Ltd. into Korean won and such translation gain was
    accounted for as an increase in the investment in CDMA Mobile
    Phone Center.(note i)

Other decrease in investments in equity securities of Empas
    Corp. resulted from the merger between Empas Corp. and SK
    Communications Co., Ltd.(note j)

SK i-media Co., Ltd., Ntreev Soft Co., Ltd. and SK Cyberpass,
    Inc. were newly included in the consolidation of the
    accompanying financial statements as their total assets at the
    beginning of 2007 increased to more than
    W7 billion, in accordance with Korean GAAP.(note k)

Equity in losses of affiliates amounting to W3,133 million
    resulted from the additional recognition of equity losses for
    short-term loans provided for by SK Communications Co., Ltd.(note l)

Konan Technology which was a subsidiary of Empas Corp. was
    included in the consolidation of accompanying consolidated
    financial statements as SK Communications Co., Ltd. merged with
    Empas Corp. for the year ended December 31, 2007.(note m)

As carrying amounts of equity securities accounted for using the
    equity method of Cyworld Europe GmbH, Cyworld China (Holdings)
    Ltd. and Cyworld Vietnam became nil, the equity method
    accounting was discontinued. Unrecognized losses because of the
    discontinuance of the equity method were
    W3,164 million as of December 31,
    2007.   F-39




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  For the Year Ended December 31, 2008Equity inCapitalSurplus andEquity in


Other





OtherBeginning





Earnings


Comprehensive


Dividend


Increase


EndingBalance


Acquisition


(Losses)


Income


Received


(Decrease)


BalanceSK Marketing & Company Co., Ltd.



W



W
190,000


W
7,410


W
(100,612
)

W



W



W
96,798AirCross Co., Ltd.

(Note a)










2,261











5,028



7,289Harex Info Tech, Inc.




1,118







(522
)














596SK Mobile

(Note c)


3,273



2,004















(3,166
)


2,111Skytel Co., Ltd.




7,743







5,189



2,140



(1,214
)






13,858SK China Company Ltd.




137



2,963



164



313











3,577TR Entertainment








10,953



(2,108
)


781











9,626Virgin Mobile USA Inc.








29,693



(8,896
)


(1,504
)






42,803



62,096SK Telecom China Holding Co., Ltd.

(Note d)


19,070



















(19,070
)


SK USA, Inc.




3,141







911



1,197











5,249Korea IT Fund




210,568







4,771



(4,604
)










210,735Centurion IT Investment Association

(Note e)


2,463



















(2,463
)


3rd Fund of Isu Entertainment




2,028







(146
)














1,882Magic Tech Network








8,494



(1,233
)


464











7,725SK Telecom Global Investment B.V.








26,044



125



5,638











31,807SKY Property Mgmt. Ltd.








283,368



(1,998
)


5,636











287,006CDMA Mobile Phone Center

(Note f)


66,001



13,629



(25,766
)










13,275



67,139Wave City Development Co., Ltd.








1,967



(59
)














1,908SK Cyberpass, Inc.

(Note b)






3,444



(1,584
)


980







1,228



4,068Shenzhen
    E-Eye High
    Tech












(1,151
)










20,952



19,801Cyworld Japan Co., Ltd.




4,091







(539
)


138











3,690Cyworld Incorporated




2,672























2,672Prmaxsoftware tech.Co., Ltd.








7,127



















7,127Mobile Money Ventures, LLC

(Note g)






8,821



(4,189
)










651



5,283SK Telecom Holdings America, Inc.




4,050



8,940



















12,990Benex Movie Expert Fund








8,100



(55
)














8,045Other investment in affiliates




24,611



7,010



(1,959
)


1,112







(5,340
)


25,434W
350,966


W
612,557


W
(29,374
)

W
(88,321
)

W
(1,214
)

W
53,898


W
898,512     (note a)

Aircross Co., Ltd. was included in the equity securities
    accounted for using equity method as it was fully liquidated in
    March 2009.(note b)

SK Cyberpass, Inc was included in the equity securities
    accounted for using equity method as its total assets at the
    beginning of 2008 decreased to less than
    W7 billion.(note c)

Other decrease in investments in equity securities of SK Mobile
    represent disposal of part of the equity shares.(note d)

Other decreases in investments in equity securities of SK
    Telecom China Holding Co., Ltd. resulted from the fact that SK
    Telecom China Holding Co., Ltd. is included in consolidation for
    the year ended December 31, 2008.(note e)

Other decrease in investments in Centurion IT Investment
    Association represents the collection of the Companys
    investment from the full liquidation of Centurion IT Investment
    Association. F-40




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (note f)

Translation gain of W13,275 million
    incurred from translating the foreign currency financial
    statements of SKT Vietnam PTE Ltd. into Korean won and such
    translation gain was accounted for as an increase in the
    investment in CDMA Mobile Phone Center.(note g)

The amount represent translation gain of
    W651 million incurred from translating the
    foreign currency financial statements of SKT Americas, Inc.
    (formerly SK Telecom International inc.) into Korean won and
    such translation gain was accounted for as an increase in the
    investment in Mobile Money Ventures, LLC.     For the Year Ended December 31, 2006Beginning








EndingBalance


In(De)crease


Amortization


BalancePantech Co., Ltd.

W
793


W



W
(793
)

W
SK C&C Co., Ltd.


4,870







(406
)


4,464TU Media Corp.


993







(209
)


784IHQ, Inc.


6,267



(5,533
)


(734
)


Harex Info Tech, Inc.


1,402







(351
)


1,051SK Mobile






3,192



(3,192
)


Helio, Inc.






38







38Empas Corp.






24,159



(1,208
)


22,951Etoos Group Inc.


1,581



(1,553
)


(28
)


Other investments in affiliates






12,531



(1,086
)


11,445Total

W
15,906


W
32,834


W
(8,007
)

W
40,733   For the Year Ended December 31, 2007Beginning








EndingBalance


In(De)crease


Amortization


BalanceSK C&C Co., Ltd.

W
4,464


W
(4,160
)

W
(304
)

W
TU Media Corp.


784



(732
)


(52
)


IHQ, Inc.














Harex Info Tech, Inc.


1,051







(350
)


701SK Mobile














Helio, Inc.


38







(38
)


Empas Corp.


22,951



(18,924
)


(4,027
)


Etoos Group Inc.














Ntreev Soft Co., Ltd.


1,785



(1,785
)






Konan Technology


3,859



(3,859
)






Other investments in affiliates


5,801



2,899



(1,770
)


6,930Total

W
40,733


W
(26,561
)

W
(6,541
)

W
7,631   F-41




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  For the Year Ended December 31, 2008Beginning








EndingBalance


In(De)crease


Amortization


BalanceHarex Info Tech, Inc.

W
701


W



W
(351
)

W
350TR Entertainment






8,066



(1,210
)


6,856Virgin Mobile USA Inc.






126,363



(7,183
)


119,180Skytel Co., Ltd.






(1,387
)


1,387



SK China Company Ltd.






107







107Magic Tech Network






6,181



(618
)


5,563SK Cyberpass Inc.






304



(46
)


258Shenzhen
    E-Eye High
    Tech






10,851



(2,171
)


8,680Other investments in affiliates


6,930



(1,893
)


(1,601
)


3,436Total

W
7,631


W
148,592


W
(11,793
)

W
144,430     For the Year Ended December 31, 2006Beginning








EndingBalance


Increase


Decrease


BalancePantech Co., Ltd.

W



W
271


W
(271
)

W
SK China Company Ltd.


1,086











1,086Cyworld Japan Co., Ltd.


2,526



681



(570
)


2,637Cyworld Incorporated






1,888



(94
)


1,794Other investments in affiliates






892



(104
)


788Total

W
3,612


W
3,732


W
(1,039
)

W
6,305   For the Year Ended December 31, 2007Beginning








EndingBalance


Increase


Decrease


BalanceSK China Company Ltd.

W
1,086


W



W



W
1,086Cyworld Japan Co., Ltd.


2,637







(2,227
)


410Cyworld Incorporated


1,794







(378
)


1,416Other investments in affiliates


788



2,552



(385
)


2,955Total

W
6,305


W
2,552


W
(2,990
)

W
5,867   For the Year Ended December 31, 2008Beginning








EndingBalance


Increase


Decrease


BalanceSK China Company Ltd.

W
1,086


W



W



W
1,086Cyworld Japan Co., Ltd.


410







(410
)


Cyworld Incorporated


1,416











1,416Other investments in affiliates


2,955



57



(192
)


2,820Total

W
5,867


W
57


W
(602
)

W
5,322  F-42




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Total


Total





NetAssets


Liabilities


Revenue


Income (Loss)SK Marketing & Company Co., Ltd.

W
593,884


W
400,287


W
133,271


W
14,823AirCross Co., Ltd.


7,402



114



24,352



2,261Harex Info Tech, Inc.


2,241



1,082



2,798



(812
)Skytel Co., Ltd.


50,653



3,448



39,815



14,409SK China Company Ltd.


16,449



1,101



11,632



(1,222
)TR Entertainment


7,521



956



6,383



(2,129
)SK USA, Inc.


12,028



1,316



9,710



1,860Korea IT Fund


332,724







19,742



7,5343rd Fund of Isu Entertainment


6,012







305



(390
)Magic Tech Network


10,194



2,986



556



(2,049
)SK Telecom Global Investment B.V.


31,845



39



286



125SKY Property Mgmt. Ltd.


656,923



178,581



9,448



(3,330
)CDMA Mobile Phone Center


451,998



317,719



73,803



(51,532
)Wave City Development Co., Ltd.


27,413



17,371



523



(311
)SK Cyberpass, Inc.


8,850



4,361



22,031



(2,454
)Shenzhen
    E-Eye High
    Tech


17,557



579



5,965



1,462Cyworld Japan Co., Ltd.


1,931



221



194



(868
)Cyworld Incorporated


2,737



13,673



57



(5,821
)Money Mobile USA, Inc.


12,404



1,838







(8,378
)Virgin Mobile USA Inc.


480,661



825,373



479,739



(10,345
)Benex Movie Expert Fund


17,428



146



82



(119
)   6.
    LOANS TO
    EMPLOYEES    2006


2007


2008Loans to employees stock ownership association

W
7,526


W
34,817


W
74,878Loans to employees for housing and other


4,580



15,231



15,488W
12,106


W
50,048


W
90,366   W W
 F-43




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  7.
    PROPERTY
    AND EQUIPMENT    Useful Lives(Years)

2006


2007


2008Land



W
473,109


W
454,916


W
756,348Buildings and structures

15-50


1,502,755



1,510,199



1,925,563Machinery

3-9


11,380,257



12,909,629



18,572,546Other

3-5


1,004,196



1,028,442



1,135,325Construction in progress




132,831



308,955



356,150Total




14,493,148



16,212,141



22,745,932Less accumulated depreciation




(9,985,813
)


(11,242,431
)


(15,305,773
)Accumulated impairment












(2,197
)Government subsidy








(356
)


(273
)Property and equipment, net



W
4,507,335


W
4,969,354


W
7,437,689   W W W
    For the Year Ended December 31, 2006Beginning














EndingBalance


Acquisition


Disposal


Transfer


Depreciation


BalanceLand

W
466,562


W
115


W
(645
)

W
7,077


W



W
473,109Buildings and structures


1,151,094



4,664



(849
)


14,262



(55,947
)


1,113,224Machinery


2,479,623



65,819



(8,571
)


1,014,646



(1,152,632
)


2,398,885Other


301,781



839,284



(17,308
)


(636,866
)


(97,605
)


389,286Construction in progress


264,309



588,260







(719,738
)






132,831W
4,663,369


W
1,498,142


W
(27,373
)

W
(320,619
)

W
(1,306,184
)

W
4,507,335   For the Year Ended December 31, 2007OtherBeginning


Increase














EndingBalance


(Decrease)


Acquisition


Disposal


Transfer


Depreciation


BalanceLand

W
473,109


W



W
471


W
(20,362
)

W
1,698


W



W
454,916Buildings and structures


1,113,224



5



4,998



(3,488
)


7,779



(56,438
)


1,066,080Machinery


2,398,885



282,925



106,524



(8,420
)


1,333,354



(1,312,840
)


2,800,428Other


389,286



19,008



1,034,181



(14,273
)


(964,200
)


(125,027
)


338,975Construction in progress


132,831



5,941



669,793



(893
)


(498,717
)






308,955Total

W
4,507,335


W
307,879


W
1,815,967


W
(47,436
)

W
(120,086
)

W
(1,494,305
)

W
4,969,354   F-44




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  For the Year Ended December 31, 2008OtherBeginning


Increase














EndingBalance


(Decrease)


Acquisition


Disposal


Transfer


Depreciation


BalanceLand

W
454,916


W
294,629


W
141


W
(3,394
)

W
10,056


W



W
756,348Buildings and structures


1,066,080



319,266



10,984



(2,900
)


28,692



(67,310
)


1,354,812Machinery


2,800,428



1,675,918



358,052



(55,090
)


1,600,116



(1,804,916
)


4,574,508Other


338,975



(950
)


1,138,814



(29,633
)


(928,313
)


(123,022
)


395,871Construction in progress


308,955



61,155



728,939



(13,461
)


(729,438
)






356,150Total

W
4,969,354


W
2,350,018


W
2,236,930


W
(104,478
)

W
(18,887
)

W
(1,995,248
)

W
7,437,689     8.
    INTANGIBLE
    ASSETS    December 31, 2008


Carrying AmountsAcquisition


Accumulated


AccumulatedCost


Amortization


Impairment


2006


2007


2008Goodwill

W
2,998,512


W
(1,093,395
)

W
(5,378
)

W
1,775,695


W
1,684,357


W
1,899,739Frequency use rights


1,385,120



(541,349
)






1,076,833



960,302



843,771Software development costs


270,638



(232,872
)


(3,193
)


45,653



19,837



34,573Customer relationships


504,156



(68,621
)










25,139



435,535Other


1,628,458



(861,947
)


(1,984
)


620,230



744,327



764,527W
6,786,884


W
(2,798,184
)

W
(10,555
)

W
3,518,411


W
3,433,962


W
3,978,145     For the Year Ended December 31, 2006Beginning

















EndingBalance


Acquisition


Disposal


Transfer


Amortization


Impairment


BalanceGoodwill

W
1,868,932


W
1,672


W



W
44,947


W
(139,806
)

W
(50
)

W
1,775,695Frequency use rights


1,184,292



687











(108,146
)






1,076,833Software development costs


65,991



1,946







9,340



(31,624
)






45,653Other


333,674



69,659



(1,250
)


330,866



(112,604
)


(115
)


620,230W
3,452,889


W
73,964


W
(1,250
)

W
385,153


W
(392,180
)

W
(165
)

W
3,518,411   F-45




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  For the Year Ended December 31, 2007OtherBeginning


Increase

















EndingBalance


(Decrease)


Acquisition


Disposal


Transfer


Amortization


Impairment


BalanceGoodwill

W
1,775,695


W
59,460


W
958


W
(124
)

W
6,092


W
(157,724
)

W
(
)

W
1,684,357Frequency use rights


1,076,833



















(116,531
)






960,302Software development costs


45,653



1,881



3,294



(5,673
)


1,679



(26,930
)


(67
)


19,837Customer relationships






33,152











629



(8,642
)






25,139Other


620,230



85,983



110,850



(5,750
)


129,729



(196,569
)


(146
)


744,327Total

W
3,518,411


W
180,476


W
115,102


W
(11,547
)

W
138,129


W
(506,396
)

W
(213
)

W
3,433,962   For the Year Ended December 31, 2008OtherBeginning


Increase

















EndingBalance


(Decrease)


Acquisition


Disposal


Transfer


Amortization


Impairment


BalanceGoodwill

W
1,684,357


W
481,106


W
1,305


W
(55
)

W
1,197


W
(267,078
)

W
(1,093
)

W
1,899,739Frequency use rights


960,302



















(116,531
)






843,771Software development costs


19,837



4,950



16,356



(1
)


10,769



(14,713
)


(2,625
)


34,573Customer relationships


25,139



479,017















(68,621
)






435,535Other


744,327



16,255



131,680



(10,809
)


180,673



(297,085
)


(514
)


764,527Total

W
3,433,962


W
981,328


W
149,341


W
(10,865
)

W
192,639


W
(764,028
)

W
(4,232
)

W
3,978,145       Amount


Description

Residual Useful LivesGoodwill

W
1,434,898


Goodwill related to merger
    of Shinsegi Telecomm, Inc.

11 years and 3 months′′


29,956


Goodwill related to merger
    of Empas Corp.

3 years and 10 months′′


378,084


Goodwill related to acquire
    of SK Broadband Co., Ltd.

19 years and 3 monthsIMT license


772,762


Frequency use rights relating to
    W-CDMA service

(note a)WiBro license


65,699


WiBro service

(note b)DMB license


5,310


DMB service

7 years and 6 monthsCustomer relationships


435,535


Customer relationships related
    to acquisition of
    SK Broadband Co., Ltd.

4 years and 9 months     (note a)

With its application for a license to provide IMT services, the
    Company has a commitment to pay
    W1,300,000 million to the Ministry of
    Information Communication (MIC). SK IMT Co., Ltd.,
    which was merged into SK Telecom on May 1, 2003, paid
    W650,000 million in March 2001 and SK
    Telecom is required to pay the remainder over 10 years with
    an annual interest rate equal to the
    3-year-
    maturity government bond rate minus 0.75% (4.54% as of
    December 31, 2008). The future payment obligations are
    W130,000 million in 2009,
    W150,000 million in 2010 and
    W170,000 million in 2011. On
    December 4, 2001, SK IMT Co., Ltd. received the IMT license
    from MIC, and recorded the total license cost (measured F-46




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  at present value) as an intangible asset. Amortization of the
    IMT license commenced when the Company started its commercial
    IMT service in December 2003, using the straight-line method
    over the estimated useful life (13 years) of the IMT
    license which expires in December 2016. The Company determined
    the IMT license has a finite life, considering that renewal cost
    is expected to be substantial. As of December 31, 2008, the
    present value discount related to the current portion and
    long-term portion of payments to be made to MIC amounts to
    W805 million and
    W15,416 million, respectively.(note b)

The Company purchased the WiBro license from MIC on
    March 30, 2005. The license period is seven years from the
    purchase date. Amortization of the WiBro license commenced when
    the Company started its commercial WiBro services on
    June 30, 2006 using the straight line method over the
    remaining useful life.  F-47




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  9.
    BONDS
    PAYABLE    AnnualMaturity

InterestYear

Rate (%)

2006


2007


2008Domestic general bonds

2007

5.0-6.0

W
700,000


W



W
′′

2008

5.0


300,000



300,000



′′

2009

5.0


300,000



300,000



300,000′′

2010

4.0
    ~
    6.77


200,000



200,000



250,000′′

2011

3.0


200,000



200,000



200,0003 month Euro Yen′′ (note a)

2012

Libor+0.55






104,166



174,236′′

2013

4.0
    ~
    6.92


200,000



200,000



450,000′′

2014

5.0






200,000



200,000′′

2015

5.0










200,000′′

2016

5.0


200,000



200,000



200,000′′

2018

5.0










200,000Unsecured private bonds

2008

6.07-6.14






30,000



′′ (note b)

2009

6.51-7.48






34,584



23,205′′

2009

6.45






30,000



30,000′′ (note b)

2010

6.50-7.07






36,250



28,182Unsecured public bonds

2008

5.50






50,000



′′

2010

6.30-6.81






110,000



110,000′′

2011

9.08










25,000Debentures (notes c and e)

2009

6.08










96,172′′       (notes c and f)

2010

8.75
    ~
    9.25










80,000′′       (notes c and f)

2011

6.65
    ~
    9.20










315,718Dollar denominated bonds (US$300,000)

2011

4.25


278,880



281,460



377,250Dollar denominated bonds (US$500,000) (notes c and g)

2012

7.0










656,251Dollar denominated bonds (US$400,000)

2027

6.63






375,280



503,000Floating rate notes



3-month(US$150,000) (note a)

2010

LIBOR rate +3.05










188,625Private bonds (¥125,000)

2007

4.65


684







Convertible bonds (SK Telecom) (note d)

2009




356,356



268,415



268,415Convertible bonds (IHQ, Inc.)

2008




18,356







Convertible bonds (YTN Media, Inc.)

2007

1.0


1,000







Bond with stock purchase warrant (SK Communications Co., Ltd.)

2007

4.65


684







Sub total






2,755,960



2,920,155



4,876,054Less discounts on bonds






(39,422
)


(46,557
)


(77,182
)Less conversion right adjustments






(46,079
)


(19,665
)


(5,733
)Less warrant right adjustments






(23
)






Add long-term accrued interest






23,854



17,256



17,256Net






2,694,290



2,871,189



4,810,395Less portion due within one year






(698,967
)


(522,528
)


(736,003
)Long-term portion





W
1,995,323


W
2,348,661


W
4,074,392  F-48




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (note a)

The 3-months
    Euro Yen LIBOR rate and the
    3-month
    Libor rate as of December 31, 2008 are 0.83% and 1.425%,
    respectively.(note b)

These bonds are scheduled to repay in 3 years with a
    two-year grace period.(note c)

These bonds are debentures of SK Broadband Co., Ltd. which was
    newly included in consolidation of accompanying consolidated
    financial statements for the year ended December 31, 2008.(note d)

The principal amount of these convertible bonds denominated in
    U.S. dollar as of December 31, 2006, 2007 and 2008 are
    US$304,240,000, US$229,160,000 and US$229,160,000, respectively.(note e)

SK Broadband Co., Ltd. is required to keep the debt ratio lower
    than 400% and prohibited from disposing or leasing of its
    property and equipment more than
    W1,000 billion in each fiscal year in
    accordance with the covenant provision of related borrowings.(note f)

SK Broadband Co., Ltd. is required to keep the debt ratio lower
    than 1,000% and prohibited from disposing or leasing of its
    property and equipment more than 20 times of its
    stockholders equity in each fiscal year in accordance with
    covenant provision of related borrowings.(note g)

SK Broadband Co., Ltd. is required to propose tender offer to
    purchase its outstanding bonds at 101% of principal if investors
    other than foreign majority shareholders acquire more than 45%
    equity interest in SK Broadband Co., Ltd., and its credit rating
    is down-graded by designated credit rating agency (S&P,
    Moodys) due to such change in management right.     Convertible
    Bonds Issued by SK Telecom
  W W W W
     F-49




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  W W
  W W W
  Convertible
    Bonds and Bonds with Stock Purchase Warrants Issued by
    Subsidiaries
  W W
   F-50




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  10.
    LONG-TERM
    BORROWINGS    Final

Annual InterestMaturity

Rate (%)Lender

Year

(Note a)

2006


2007


2008Shinhan Bank (note b)

2011

91 days CD yield + 0.25

W
200,000


W
200,000


W
200,000Korea Development Bank

2011

91 days CD yield + 1.02









W
100,000Citibank

2011

91 days CD yield + 1.20









W
100,000Nonghyup

2011

91 days CD yield + 1.30









W
100,000Hana Bank

2011

91 days CD yield + 1.50









W
150,000Nonghyup

2011

91 days CD yield + 1.50









W
50,000Shinhan Bank

2011

4.36





W
762


W
635Korea Development Bank

2011

5.79









W
16,253Kookmin Bank

2012

5.91









W
11,860Korea Development Bank

2013

5.91









W
10,577Small Business Corporation

2009

5.25





W
156


W
31Calyon Bank

2013

6M Libor + 0.29

US$
50,000


US$
50,000


US$
50,000DBS Bank

′′

′′

US$
25,000


US$
25,000


US$
25,000SMBC

′′

′′

US$
25,000


US$
25,000


US$
25,000Earthlink, Inc.

2010

10





US$
30,000



Industrial Bank of Korea

2008

3.50
    ~
    3.90

¥
8,880







′′

2009

3.11

¥
9,100







′′

2010

2.50
    ~
    4.00





W
641


W
384Resona Bank

2010

1.85





¥
98,573



Total





W
200,000


W
201,559


W
739,740US$
100,000


US$
130,000


US$
100,000¥
17,980


¥
98,573



Equivalent in Korean won





W
293,101


W
324,346


W
865,490Less portion due within one year






(75
)


(925
)


(9,019
)Long-term portion





W
293,026


W
323,421


W
856,471     (note a)

At December 31, 2008, the
    91-day CD
    yield and the 6M LIBOR rate are 3.93% and 1.75%, respectively.(note b)

This long-term a borrowings is classified as long-term borrowing
    as the borrowing is to be rolled-over exceeding 1 year from
    December 31, 2008 in accordance with the loan agreement.  F-51




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Long-Term Borrowingin Foreign CurrenciesLong-Term Borrowing


Foreign


Korean WonYear Ending December 31,

in Korean Won


Currencies


Equivalent


Total2009

W
9,019










W
9,0192010


12,599











12,5992011


710,856











710,8562012


5,503











5,5032013 and thereafter


1,763


US$
100,000


W
125,750



127,513Total

W
739,740


US$
100,000


W
125,750


W
865,490   11.
    SUBSCRIPTION
    DEPOSITS      Deposit perService Type

Subscriber


2006


2007


2008Cellular

W
200,000


W
21,140


W
6,425


W
4,796      F-52




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  12.
    LEASES  W W
  Annual LeaseYear Ending December 31,

Payments


Interest


Principal2009

W
74,741


W
12,951


W
61,7912010


74,650



8,401



66,2492011


49,260



3,625



45,6352012


28,147



758



27,388Total

W
226,798


W
25,735



201,063Less portion due within one year










(61,790
)Finance lease liabilities









W
139,273     Minimum LeaseYear Ending December 31,

Payments2009

W
672,8372010


460,0462011


436,4252012


410,5902013 and thereafter


Total

W
1,979,898  F-53




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  13.
    ASSETS
    AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES    Foreign Currencies


Korean Won Equivalent2006


2007


2008


2006


2007


2008Cash and cash equivalents

US$
1,330


US$
357,413


US$
7,269


W
1,236


W
335,325


W
9,1402


EUR2



EUR117



EUR85



2



162



1522










JPY1,313











18Accounts receivable  trade

US$
30,849


US$
26,818


US$
35,837



28,677



25,161



45,0662


¥800



¥41,307







6



344



2


EUR248



EUR248



EUR187



303



343



3322






CNY5,620



CNY5,620







722



1,035Short-term loans





US$
2,419


US$
2,168







2,270



2,726Accounts receivable  other

US$
1,657


US$
965


US$
2



1,541



905



32










CNY7,888











1,452Guarantee deposits

US$
17


US$
12


US$
8



16



11



92


¥21,536



¥16,912



¥17,397



168



141



242Total assets













W
31,949


W
365,384


W
60,175   Foreign Currencies


Korean Won Equivalent2006


2007


2008


2006


2007


2008Accounts payable  trade





US$
27,904


US$
22,295


W



W
26,179


W
28,0362






¥1,251



¥1,251







10



172










FRF11,474











3Accounts payable  other

US$
36,373


US$
22,596


US$
31,605



33,812



21,199



39,7442


¥19,956



¥16,954



¥112,370



156



141



1,5662

HK$
190


HK$
248


HK$
41



23



30



72


GBP48



GBP931



GBP38



88



1,745



702

SG$
6


SG$
27


SG$
1



4



18



12


EUR 813



EUR 588



EUR 1,116



993



812



1,9832


CHF250



CHF250







190



208



2

CA$
2











1







2


FRF11



FRF11







2



2



Total liabilities













W
35,269


W
50,344


W
71,427  F-54




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  14.
    CAPITAL
    STOCK AND CAPITAL SURPLUS  W
  2006


2007


2008Authorized shares


220,000,000



220,000,000



220,000,000Issued shares


81,193,711



81,193,711



81,193,711Outstanding shares, net of treasury stock


72,667,459



72,584,677



72,486,015     Number of





CapitalShares Issued


Common Stock


SurplusAt December 31, 2005


82,276,711



44,639



2,969,865Retirement of treasury stock (note a)


(1,083,000
)






Conversion of convertible bonds (note b)










(3,733
)Transfer of stock options from capital adjustment (note c)










234Equity in capital surplus changes of affiliates










33At December 31, 2006


81,193,711



44,639



2,966,399Conversion of convertible bonds (note d)










(11,116
)Transfer of stock options from capital adjustment (note e)










3,246Equity in capital surplus changes of affiliates










(2,423
)At December 31, 2007


81,193,711



44,639



2,956,106Decrease of conversion of convertible bonds due to change in
    statutory tax rates










1,544Gain on disposal of treasury stock (note f)










722Equity in capital surplus changes of affiliates










482At December 31, 2008


81,193,711


W
44,639


W
2,958,854     (note a)
    The Company retired 491,000 shares and 592,000 shares
    of treasury stock on August 17, 2006 and September 29,
    2006, respectively, and reduced retained earnings before
    appropriation in accordance with Korean Commercial Code.(note b)
    For the year ended December 31, 2006, the convertible bonds
    with principal amount of US$25,210,000 were converted into
    136,163 shares of the Companys common stock. Such
    conversion was settled by the Company by using its treasury
    stocks. Related to this conversion transaction, the capital
    surplus amount decreased by W3,733 million.(note c)
    For the year ended December 31, 2006, the exercisable
    period for the stock options representing 43,390 shares, of
    which recognized compensation costs were
    W234 million, expired and the related
    stock options of W234 million in capital
    adjustments were transferred to capital surplus.(note d)
    For the year ended December 31, 2007, the convertible bonds
    with principal amount of US$38,820,000 were converted into
    216,347 shares of the Companys common stock. Such
    conversion was settled by the F-55




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Company by using its treasury stocks (see note 16). Related
    to this conversion transaction, the capital surplus amount
    decreased by W11,116 million.  (note e)
    For the year ended December 31, 2007, the exercisable
    period for the stock options representing 65,730 shares,
    for which the Company recognized compensation costs of
    W3,246 million, expired and the related
    stock options of W3,246 million in capital
    adjustments were transferred to capital surplus.  (note f)
    On January 23, 2008, treasury stock of 208,326 shares
    with carrying value totaling
    W49,401 million were sold to the
    employees stock ownership association. As a result of
    these transactions, tax effect of accumulated temporary
    differences related to the sold treasury stocks exceeded loss on
    disposal of treasury stock.  15.
    RETAINED
    EARNINGS    2006


2007


2008Appropriated

W
6,679,235


W
7,335,037


W
8,295,037Unappropriated


1,168,199



1,579,933



1,153,148W
7,847,434


W
8,914,970


W
9,448,185     2006


2007


2008Legal reserve

W
22,320


W
22,320


W
22,320Reserve for improvement of financial structure


33,000



33,000



Reserve for loss on disposal of treasury stock


477,182



255,984



255,984Reserve for research and manpower development


880,595



872,595



872,595Reserve for business expansion


5,266,138



6,151,138



6,344,138Reserve for technology development










800,000W
6,679,235


W
7,335,037


W
8,295,037   a. Legal
    Reserve
    b. Reserve
    for Improvement of Financial Structure
   F-56




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  c. Reserves
    for Loss on Disposal of Treasury Stock and Research and Manpower
    Development
    d. Reserve
    for Business Expansion and Technology Development
    16.
    TREASURY
    STOCK  W W W W W
  W W W W
  W W W W W
  W
  17.
    INCOME
    TAXES    2006


2007


2008Currently

W
615,959


W
572,806


W
493,714Changes in net deferred tax liabilities


(43,933
)


121,681



(194,864
)Income tax expenses

W
572,026


W
694,487


W
298,850  F-57




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2006


2007


2008Income taxes at statutory income tax rate of 25% in 2006, 2007
    and 2008

W
505,394


W
571,441


W
314,683Resident surtax payable


50,539



57,144



31,468Tax credit for investments, technology and human resource
    development


(110,785
)


(105,819
)


(98,551
)Special surtax for agriculture and fishery industries


20,183



17,855



17,528Additional income tax (tax refund) for prior periods






8,148



(60,130
)Goodwill amortization not deductible for tax purpose


38,447



35,382



35,382Undistributed earnings of subsidiaries


1,496



5,326



3,196Other permanent differences


24,717



3,664



18,045Change in valuation allowance


42,035



101,346



37,229Recorded income taxes

W
572,026


W
694,487


W
298,850Effective tax rate


28.30
%


30.38
%


23.74
%  F-58




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2006


2007


2008Current:Allowance for doubtful accounts

W
21,701


W
17,289


W
33,073Accrued interest income


(1,605
)


(2,073
)


(2,902
)Accrued interest expense










21,856Net operating loss carryforwards


1,121



5,406



7,606Tax credit carryforwards


19







570Other


28,704



15,756



(32,417
)Net deferred tax assets  current


49,940



36,378



27,786Non-Current:Depreciation


(51,437
)


(42,671
)


(9,491
)Loss on impairment of investment securities


33,269



41,105



99,149Equity in losses (gains) of affiliates, net


3,968



(52,313
)


(3,458
)Unrecognized deficit (undistributed earnings) of subsidiaries


34,005



86,497



(59,826
)Tax free reserve for research and manpower development


(211,215
)


(151,259
)


(80,707
)Tax free reserve for loss on disposal of treasury stock


(70,395
)


(70,396
)


Loss on valuation of foreign currency swap


6,188



6,188



(36,332
)Loss on valuation of interest swap


125



(871
)


7,370Loss on valuation of foreign currency swap (accumulated other
    comprehensive income)


6,668



6,668



(1,490
)Gain on conversion of convertible bond






(102,613
)


(82,091
)Consideration for conversion right


(17,086
)


(12,870
)


(11,325
)Equity in other comprehensive income of affiliates, net


(34,077
)


7,879



22,960Unrealized loss (gain) on valuation of long-term investment
    securities (accumulated other comprehensive income)


(163,992
)


(617,020
)


(123,636
)Loss (Gain) on foreign currency translation










(34,773
)Net operating loss carryforwards


66,319



183,053



137,348Tax credit carryforwards


48



35,399



39,345Other


8,801



28,864



86,061Total deferred tax liabilities


(388,811
)


(654,360
)


(50,896
)Valuation allowance for:Depreciation


183



236



(11,686
)Net operating loss carryforwards


(60,142
)


(182,726
)


(137,348
)Equity in losses of affiliates and unrecognized deficit of
    subsidiaries


(73,082
)


(161,081
)


(87,314
)Loss (Gain) on foreign currency translation










(34,773
)Loss on impairment of investment securities










(18,387
)Other


(8,132
)


(39,541
)


(63,403
)Net deferred tax liabilities  non-current

W
(529,984
)

W
(1,037,472
)

W
(403,807
)  F-59




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Net Operating Loss


Tax CreditYear Ending December 31,

Carryforwards


Carryforwards2009

W
4


W
5702010






5142011






3282012






223Total

W
4


W
1,635     2006


2007


2008Consideration for conversion right

W
(17,086
)

W
(12,870
)

W
(11,325
)Gain on disposal of treasury stock


(38,341
)


(36,339
)


(28,368
)Equity in capital adjustments of affiliates










4,677Stock option






(99
)


Unrealized loss (gain) on valuation of long-term investment
    securities, net


(162,847
)


(616,996
)


(125,620
)Equity in other comprehensive income of affiliates, net


(41,403
)


(716
)


(12,438
)Loss on valuation of foreign currency swap


6,668



6,668



4,032Loss (gain) on valuation of interest rate swap


125



(871
)


7,370Foreign-based operations translation adjustment


(22
)


(32
)


193Retained Earnings






30



30Total

W
(252,906
)

W
(661,225
)

W
(161,449
)  F-60




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  18.
    COMPREHENSIVE
    INCOME    2006


2007


2008Profit and





Profit and





Profit andLoss Effect


Tax Effect


Loss Effect


Tax Effect


Loss Effect


Tax EffectNet income

W
1,449,552






W
1,562,265






W
972,338Other comprehensive income (loss):Unrealized gain on valuation of long-term investment securities,
    net


471,321


W
(178,814
)


1,195,385


W
(454,149
)


(1,216,771
)

W
491,376Equity in other comprehensive income of affiliates, net


45,956



(17,282
)


(105,597
)


40,687



(70,490
)


(11,722
)Foreign-based operations translation adjustment


(19,737
)


(24
)


4,162



(10
)


60,262



226Gain (loss) on valuation of currency swap, net


(2,311
)


1,291



4,671







20,360



(2,636
)Gain (loss) on valuation of interest rate swap, net


(329
)


125



2,627



(996
)


(28,427
)


8,241Sub-total


494,900


W
(194,704
)


1,101,248


W
(414,468
)


(1,235,066
)

W
485,485Comprehensive income

W
1,944,452






W
2,663,513






W
(262,728
)Attributable to:Majority interests

W
1,946,391






W
2,750,124






W
(19,347
)Minority interests


(1,939
)






(86,611
)






(243,381
)W
1,944,452






W
2,663,513






W
(262,728
)   19.
    NET
    INCOME PER SHARE    Net
    income from continuing operation per share
  2006


2007


2008Net income from continuing operation attributable to the
    majority interests

W
1,451,491


W
1,681,369


W
1,197,182Weighted average number of common shares outstanding


73,305,026



72,650,909



72,765,557Net income per share

W
19,801


W
23,143


W
16,453  F-61




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2006


2007


2008Net income attributable to the majority interests

W
1,451,491


W
1,648,876


W
1,215,719The majority interests portion of net loss(income) from
    discontinued operation attributable to the majority interests






32,493



(18,537
)Net income from continuing operation attributable to the
    majority interests


1,451,491



1,681,369



1,197,182   Net
    income per share
  2006


2007


2008Net income attributable to the majority interests

W
1,451,491


W
1,648,876


W
1,215,719Weighted average number of common shares outstanding


73,305,026



72,650,909



72,765,557Net income per share

W
19,801


W
22,696


W
16,707     Weighted

WeightedNumber of


Number of

NumberDate

Shares


Days

of SharesFor 2006:At January 1, 2006




82,276,711


365/365


82,276,711Treasury stock, at the beginning of the year




(8,662,415
)

365/365


(8,662,415
)Retirement of treasury stock

(note a)


(1,083,000
)




(373,546
)Conversion of convertible bonds

(note b)


136,163





64,276Total




72,667,459





73,305,026For 2007:At January 1, 2007




81,193,711


365/365


81,193,711Treasury stock, at the beginning of the year




(8,526,252
)

365/365


(8,526,252
)Acquisition of treasury stock

(note c)


(471,000
)

28/365


(36,337
)Conversion of convertible bonds

(note d)


216,347


29/365


16,962Disposal of treasury stock




171,871


6/365


2,825Total




72,584,677





72,650,909For 2008:At January 1, 2008




81,193,711


366/366


81,193,711Treasury stock, at the beginning of the year




(8,609,034
)

366/366


(8,609,034
)Acquisition of treasury stock

(note c)


(306,988
)




(14,924
)Disposal of treasury stock




208,326


344/366


195,804Total




72,486,015





72,765,557  F-62




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (note a)
    The Company retired treasury stocks which were acquired on two
    different dates during the year ended December 31, 2006,
    and weighted number of shares was calculated considering each
    transaction date.(note b)
    Treasury stocks were used to settle the conversion of the
    convertible bonds on several different dates during the year
    ended December 31, 2006, and weighted number of shares was
    calculated considering each transaction date.(note c)
    The Company acquired treasury stocks on many different dates for
    the years ended December 31, 2007 and 2008, and weighted
    number of shares was calculated considering each transaction
    date.(note d)
    Treasury stocks were used to settle the conversion of the
    convertible bonds on several different dates during the year
    ended December 31, 2007, and weighted number of shares was
    calculated considering each transaction date.    Diluted
    net income from continuing operation per share
  2006


2007


2008Adjusted net income from continuing operation attributable to
    the majority interests

W
1,464,768


W
1,694,171


W
1,208,332Adjusted weighted average number of common shares outstanding


75,025,926



74,263,655



74,090,301Net income per share

W
19,523


W
22,813


W
16,309   Diluted
    net income per share
  2006


2007


2008Adjusted net income attributable to the majority interest

W
1,464,768


W
1,661,678


W
1,226,869Adjusted weighted average number of common shares outstanding


75,025,926



74,263,655



74,090,301Diluted net income per share

W
19,523


W
22,375


W
16,559  F-63




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##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Diluted
    net income per share
  Average WeightedNet Income


Number of Shares


Per-Share Amount(In Millions of





(in Korean Won)Korean Won)For 2006Basic net income per share

W
1,451,491



73,305,026


W
19,801Effect of stock option (note a)






Effect of convertible bonds (note b)


13,277



1,720,900Diluted net income per share

W
1,464,768



75,025,926


W
19,523For 2007Basic net income per share

W
1,648,876



72,650,909


W
22,696Effect of stock option (note a)






Effect of convertible bonds (note b)


12,802



1,612,746Diluted net income per share

W
1,661,678



74,263,655


W
22,375For 2008Basic net income per share

W
1,215,719



72,765,557


W
16,707Effect of stock option (note a)






Effect of convertible bonds (note b)


11,150



1,324,744Diluted net income per share

W
1,226,869



74,090,301


W
16,559     (note a)
    For the years ended December 31, 2006, 2007 and 2008, the
    outstanding stock options did not have a dilutive effect because
    the exercise price exceeded the average market price of common
    stock for the years ended December 31, 2006, 2007 and 2008,
    respectively.(note b)
    The effect of convertible bonds is increase in net income
    related to interest expenses that would not have incurred, and
    increase in the weighted average number of common shares
    outstanding related to common shares that would have been
    issued, assuming that the conversion of convertible bonds were
    made at the beginning of the period.    2006


2007


2008Net income(loss) attributable to the majority interest

W



W
(447
)

W
254  F-64




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##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  20.
    DIVIDEND
    DISCLOSURE    Fiscal




Number of Shares


Face


DividendYear


Dividend Type

Outstanding


Value


Ratio


Dividends2006


Cash dividends (interim)


73,713,657


W
500



200
%

W
73,714Cash dividends (year-end)


72,667,459


W
500



1,400
%


508,672Total













W
582,3862007


Cash dividends (interim)


72,667,459


W
500



200
%

W
72,668Cash dividends (year-end)


72,584,677


W
500



1,680
%


609,711Total













W
682,3792008


Cash dividends (interim)


72,793,003


W
500



200
%

W
72,793Cash dividends (year-end)


72,524,203


W
500



1,680
%


609,203Total













W
681,996     2006


2007


2008Dividends

W
582,386


W
682,379


W
681,996Net income attributable to the majority interest


1,451,491



1,648,876



1,215,719Dividends payout ratio


40.12
%


41.38
%


56.10
%     2006


2007


2008Dividend per share

W
8,000


W
9,400


W
9,400Stock price at the year-end


222,500



249,000



209,000Dividends yield ratio


3.60
%


3.78
%


4.49
%   21.
    RESTRICTED
    DEPOSITS  W W
  W
  22.
    COMMITMENTS
    AND CONTINGENCIES  W W W
   F-65




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##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  W W W W W W W W W W W
  W
  W W
  W
  W
  W W
  W W
  W
  W
  W W
  W
 F-66




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##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  23.
    INSURANCE    Asset

Risk

Book Value


CoverageInventories and







US$
56,115property and equipment

Fire and comprehensive liability

W
5,647,251


W
9,502,686   24.
    TRANSACTIONS
    WITH AFFILIATED COMPANIES    Description

2006


2007


2008TransactionsSK Corporation:Purchases of property and equipment

W
2,158


W



W
Commissions paid and other expense


40,694







177Commission income and other income


13,877



829



313SK Energy Co., Ltd.:Purchases of property and equipment










3,001Commissions paid and other expense






30,281



17,895Commission income and other income






17,250



8,898SK Engineering & Construction Co., Ltd.:Purchases of property and equipment


235,872



307,702



256,548Commissions paid and other expense


7,086



16,147



17,025Commission income and other income


2,385



2,908



2,705SK Networks Co., Ltd.:Purchases of property and equipment


9,249



39,415



28,972Commissions paid, leased line and other expense


490,437



710,228



753,036Sales of handsets and other income


11,897



15,754



32,052SK Telesys Co., Ltd.:Purchases of property and equipment


231,233



264,150



270,133Commissions paid and other expenses


6,567



13,027



9,078Commission income and other income


2,170



2,687



1,967SKC:Commissions paid and other expenses


21



21



26Commission income and other income


1,155



1,135



1,005Innoace Co., Ltd.:Purchases of property and equipment


23,986



23,694



27,153Commissions paid and other expenses


7,447



9,839



9,389Commission income and other income


218



242



269 F-67




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##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Description

2006


2007


2008SK C&C Co., Ltd.:Purchases of property and equipment


215,820



205,677



232,238Commissions paid and other expenses


287,647



251,401



273,279Commission income and other income


8,795



9,470



12,681SK Networks Service:Commissions paid and other expenses










20,599WALKERHILL Inc.:Commissions paid and other expenses










17,881Commission income and other income










983OK Cashbag Service Co., Ltd.:Purchases of property and equipment










1,906Commissions paid and other expenses










9,978Commission income and other income










417SK Mobile Energy., Ltd.:Purchases of property and equipment










4,167Commission income and other income










23Infosec Co., Ltd.:Purchases of property and equipment










1,270Commissions paid and other expenses










3,076Commission income and other income










11TU Media Corp. (note a):Purchases of property and equipment


573







Commissions paid and other expenses


1,798







Commission income and other income


57,866







AirCross Co., Ltd.:Commissions paid and other expenses


19,494







9,158Commission income and other income


616







375Pantech Co., Ltd.:Commissions paid and other expenses


400







Commission income and other income


16,605







Helio, Inc. & Helio, LLC:Commissions paid and other expenses


1,087







Commission income and other income


18,243







SK Marketing & Company Co., Ltd.:Commissions paid and other expenses










49,826Commission income and other income










6,769JYP Entertainment Corp.:Commissions paid and other expenses


1,010



1,248



3,655Commission income and other income


108







84 F-68




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##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Description

2006


2007


2008SK China Company Ltd.:Commissions paid and other expenses










5,826SK Telecom China Holdings Co., Ltd.:Commissions paid and other expenses






7,655



SK USA, Inc.:Commissions paid and other expenses


2,303



2,617



3,032CDMA Mobile Phone Center:Commission income and other income


7,643



16,564



20,627WS Entertainment:Commissions paid and other expenses


295



1,081



Commission income and other income


6







Others:Commissions paid and other expenses






4,444



896Commission income and other income


1,006







468BalancesSK Engineering & Construction Co., Ltd.:Accounts receivable  trade and other

W
258


W
310


W
203Accounts payable


1,635



8,870



1,164Guarantee deposits received


942



1,135



1,076SK Networks Co., Ltd.:Accounts receivable  trade and other


780



2,182



1,069Guarantee deposits


113



113



330Accounts payable


71,160



71,311



71,795Guarantee deposits received


3,123



3,432



3,963SK Corporation:Accounts receivable  trade and other


5,058



775



46Guarantee deposits


291







Accounts payable


7,999







Guarantee deposits received


6,465







SK Energy Co., Ltd.:Accounts receivable  trade and other






2,959



109Guarantee deposits






134



Accounts payable






4,404



3,548Guarantee deposits received






248



SK Telesys Co., Ltd.:Accounts receivable  trade and other


34



31



486Accounts payable


51,663



30,205



20,533SKC:Accounts receivable  trade and other


121



71



81 F-69




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##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Description

2006


2007


2008Innoace Co., Ltd.:Accounts receivable  trade and other






26



10Accounts payable


13,574



7,223



4,315Guarantee deposits received


2,291



2,291



2,444SK C&C Co., Ltd.:Accounts receivable  trade and other






411



2,477Guarantee deposits










140Accounts payable


88,056



135,297



93,680Guarantee deposits received


346



346



24WALKERHILL Inc.:Accounts receivable  trade and other










529Guarantee deposits










900Accounts payable










4,011TU Media Corp. (note a):Accounts payable


886







Guarantee deposits received


3,016







AirCross Co., Ltd.:Accounts receivable  trade and other










57Accounts payable


3,513







397Guarantee deposits received


226







276Pantech Co., Ltd.:Accounts payable


440







ifilm Co., Ltd.:Accounts receivable  trade and other






5,724



SK China Company Ltd.:Accounts payable










1,428CDMA Mobile Phone Center:Accounts receivable  trade and other


27,063



38,756



80,734Accounts payable


67



65



87SK Marketing & Company Co., Ltd.:Accounts receivable  trade and other










1,704Accounts payable










22,866Guarantee deposits received










248Others:Accounts receivable  trade and other






1,255



830Accounts payable


588



413



774Guarantee deposits received










133     (note a)
    
    These companies were included in the consolidation from the year
    ended December 31, 2007 or 2008, accordingly transactions
    and balances with the Company are eliminated. F-70




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##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   25.
    COMPENSATION
    FOR THE KEY MANAGEMENT    2006


2007


2008Payee (including outside directors)


12 registered directors



8 registered directors



7 registered directorsPayroll

W
4,472


W
4,786


W
4,405Severance indemnities


935



722



556Total

W
5,407


W
5,508


W
4,961   W
  26.
    PROVISION  a.
    Provision
    for point program  W W W
    2006


2007


2008Beginning balance

W
52,172


W
52,593


W
27,668Increase (provision)


10,757



15,137



12,430Decrease (used and reversal)


(10,336
)


(40,062
)


(15,209
)Ending Balance

W
52,593


W
27,668


W
24,889     Expected Year

Estimated Amount to be Paidof the Usage (Note a)

in Nominal Value (Note a)


Current Value2009

W
11,185


W
10,5022010


7,307



6,4422011


4,791



3,9672012


3,156



2,4532013


2,089



1,525Ending balance

W
28,528


W
24,889  F-71




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##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (note a)
    
    The above expected year of the usage and the current value of
    the estimated amount to be paid are estimated based on the
    historical usage experience.  b. Provision
    for handset subsidy
    2008Beginning balance

W
Increase (Provision)


433,276Decrease (subsidy payment)


(93,580
)Ending balance

W
339,696     Expected Payment

Estimated Amount to be Paidfor the Year Ended December 31,

in Nominal Value


Current Value2009

W
294,937


W
286,4412010


57,272



53,255Ending balance

W
352,209


W
339,696   27.
    DERIVATIVE
    INSTRUMENTS  a. Currency
    swap contract to which the cash flow hedge accounting is
    applied
  fixed-to-fixed W W W
  fixed-to-fixed W W
  floating-to-fixed W W W
 F-72




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##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  floating-to-fixed W W W
  floating-to-fixed W W W
  b. Interest
    rate swap contract to which the cash flow hedge accounting is
    applied
  floating-to-fixed W W W
  floating-to-fixed W W W
  c. Currency
    swap contract to which the fair value hedge accounting is
    applied
  fixed-to-fixed W W
  d. Currency
    swap contract to which the hedge accounting is not
    applied
  fixed-to-fixed fixed-to-fixed W W W
  fixed-to-to fixed-to-fixed
 F-73




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##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  W
  fixed-to-fixed W W
    Fair ValueDesignated


DesignatedDuration

as Cash


as Fair


NotType

Hedged Item

Amount


of Contract

Flow Hedge


Value Hedge


Designated


TotalCurrent assets:Fix-to-fixed
    cross
    currency swap

U.S. dollar
    denominated
    convertible bond

US$
100,000


May 27, 2004~
    May 27, 2009

W



W



W
8,236


W
8,236Non-current assets:Fix-to-fixed
    cross
    currency swap

U.S. dollar
    denominated bonds

US$
300,000


Mar. 23, 2004~
    Apr. 1, 2011


19,576











19,576Fix-to-fixed
    cross
    currency swap

U.S. dollar
    denominated bonds

US$
400,000


Jul. 20, 2007~Jul. 20,
    2017










240,372



240,372Floating-to-fixed
    cross currency
    interest rate
    swap

Japanese yen
    denominated bonds

JPY
12,500,000


Nov. 13, 2007~
    Nov. 13, 2012


69,981











69,981Floating-to-fixed
    cross currency
    interest rate swap

U.S. dollar
    denominated long-term
    borrowings

US$
100,000


Oct. 10, 2006~
    Oct. 10, 2013


26,886











26,886Fix-to-fixed
    cross
    currency swap

U.S. dollar
    denominated bonds

US$
500,000


Feb. 1, 2005~Feb.
    1, 2012


137,896











137,896Total assets









W
254,339


W



W
248,608


W
502,947Current liabilities:Fix-to-fixed
    cross
    currency swap

U.S. dollar
    denominated
    China Unicom
    Equity
    Securities

HK$
10,940,900


Sep. 11, 2008~
    Sep. 16, 2009

W



W
190,359


W



W
190,359Non-current liabilities:Fix-to-fixed
    cross
    currency swap

U.S. dollar
    denominated bonds

US$
150,000


Nov 20, 2008~
    Nov 20, 2010


23,947











23,947Floating-to-fixed
    cross currency
    interest rate
    swap

Long-term borrowings

W
500,000


July 28, 2008~
    August 13, 2009


28,774











28,774Floating-to-fixed

Long-term floating rate





Jun. 29, 2006Interest rate swap

discounted bill

W
200,000


~
    Jun. 29, 2010


4,725











4,725Total liabilities









W
57,446


W
190,359


W



W
247,805  F-74




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  28.
    MERGERS
    AND ACQUISITIONS  a. Merger
    with Empas, Inc.
      Description

In Millions of Korean WonFair value of acquired assets

W
101,613Fair value of assumed liabilities


(56,872
)Convertible bond issued by the acquirer


44,850Deferred tax asset on temporary differences


3,991Fair value of net assets

W
93,582Consideration for mergerFair value of stock issued

W
57,703Carrying amount of equity method securities purchased prior to
    merger


30,101Convertible bond issued by the acquirer prior to merger


44,850Total


132,654Goodwill

W
39,072  F-75




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##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  29.
    CONSOLIDATED
    STATEMENTS OF CASH FLOWS      2006


2007


2008Conversion of convertible bonds

W
29,528


W
5,654


W
Retirement of treasury stocks


209,077







Write-offs of accounts receivable


90,780



67,313



37,079Acquisition of property and equipment asset through financial
    lease contract










76,364Transfer from inventory to property and equipment tangible assets










46,749Acquisition of machinery by accounts payable










39,640Increase in assets due to merger


10,196



101,613



Increase in liabilities due to merger


9,851



56,872



Increase in assets due to the change in consolidated subsidiaries


93,581



541,809



2,923,398Increase in liabilities due to the change in consolidated
    subsidiaries


33,904



489,288



1,543,098     2006


2007


2008Cash and cash equivalents

W
485,972


W
885,989


W
1,011,467Government subsidy






(142
)


(127
)W
485,972


W
885,847


W
1,011,340   30.
    NETWORK
    INTERCONNECTION CHARGES    W W W W W W
  31.
    SUBSEQUENT
    EVENT  a. Issuance
    of unguaranteed bonds
  W
 F-76




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##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  3-month
  W 3-month
  b. Retirement
    of treasury stock.
  W
  c. Issuance
    of unguaranteed convertible bonds denominated in U.S
    dollar
  W
  d. Acquisition
    of leased-line business from SK Networks Company
    Ltd.
  W W
  e. Participation
    in the capital stock increase of SK Broadband Co.,
    Ltd.
  W
  32.
    SEGMENT
    INFORMATION   F-77




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Cellular


Fixed-lineTelephone


Telecomm-Telecommuni-


unication








Consolidating


Consolidatedcation Service


Service


Other


Sub-total


Adjustments


AmountTotal sales


11,674,662



2,132,455



847,397



14,654,514



(633,530
)


14,020,984Internal sales


127,301



59,753



446,476



633,530



(633,530
)


Net sales


11,547,361



2,072,702



400,921



14,020,984







14,020,984Operating income


2,256,613



99,359



(603,504
)


1,752,468







1,752,468Property and equipment and intangible assets


7,639,806



3,148,683



627,345



11,415,834







11,415,834Depreciation


1,943,422



535,169



280,685



2,759,276







2,759,276   33.
    RECONCILIATION
    TO UNITED STATES GENERALLY ACCEPTED ACCOUNTING
    PRINCIPLES    a. Income
    Taxes
  W W W
  W
  b. Deferred
    Charges
  W
  c. Leases
   F-78




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##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  W
  d. Marketable
    Securities and Investments Securities
  available-for-sale W
  e. Impairment
    of Investment Securities and Recoveries
  W W W W W W available-for-sale available-for-sale W
  available-for-sale held-to-maturity held-to-maturity available-for-sale
  W W W
  f. Comprehensive
    Income
   F-79




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##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  g. Business
    Combinations and Intangible Assets
    W W W
    W W W
    h. Determination
    of Acquisition Cost of Equity Interest in
    Subsidiary
  W
   F-80




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  W
  i. Additional
    Equity Investment in Subsidiaries
  W W W
  j. Capitalization
    of Foreign Exchange Losses (Gains) and Interest
    Expenses
  W W W
  W W W
  k. Nonrefundable
    Activation Fees
  W W W
  l. Employee
    Stock Option Compensation Plan
   F-81




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    m. Loans
    Receivable for Stock Issued to Employee
    n. Convertible
    Bonds Payable
  W W W
  W W W
  o. Currency
    and Interest Rate Swap
  W W W
  p. Sale
    of Stock by Equity Method Investee
   F-82




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  W W
  q. Consolidation
    of Variable Interest Entities
      r. Convertible
    Notes Receivable
  available-for-sale available-for-sale W
  available-for-sale W available-for-sale
 F-83




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  s.
    Presentation
    of Minority Interest as a Component of Shareholders
    Equity    t. Scope
    of Consolidations
  W W
    NetTotal


Total





IncomeAssets


Liabilities


Revenue


(Loss)IHQ, Inc.

W
55,980


W
20,005


W
44,828


(W
16,671
)TU Media Corp.


301,026



266,175



127,591



(30,859
)CU Media, Inc.


32,031



13,174



27,312



(4,921
)Benex Digital Culture Contents Fund


25,444



4



659



340IMM Cinema Fund


17,884



7



918



(2,043
)Michigan Global Cinema Fund


9,838







522



97SK Broadband Co., Ltd.


3,400,357



2,198,465



1,367,881



(223,653
)   u. Handset
    Subsidies to Long-time Mobile Subscribers
    v. Reclassification
    of Investment in Equity Securities of SK C&C Co.,
    Ltd.
  available-for-sale
 F-84




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  W W W W
  2006


2007


2008Current assets

W
400,994


W
663,791


W
890,816Non-Current assets


1,505,237



3,052,281



3,548,816Total

W
1,906,231


W
3,716,072


W
4,439,632Current liabilities

W
542,917


W
810,141


W
1,199,621Non-Current liabilities


483,934



904,821



1,021,529Share holders equity


879,380



2,001,110



2,218,482Total

W
1,906,231


W
3,716,072


W
4,439,6322006


2007


2008Operating revenue

W
1,107,910


W
1,160,946


W
1,275,185Operating expenses


(994,556
)


(1,081,361
)


(1,185,971
)Operating income


113,354



79,585



89,214Other income (expenses), net


8,929



1,381,694



60,859Provision for income taxes


(34,959
)


(405,709
)


11,747Net income

W
87,324


W
1,055,570


W
161,820   x. Retroactive
    Application of Equity Method of Accounting
  step-by-step W W W W W W
 F-85




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended December 31,2006


2007


2008Net income based on Korean GAAP

W
1,449,552


W
1,562,265


W
972,338Adjustments :Net income attributed to minority interests


1,939



86,611



243,381Deferred charges


2,037







Capital leases


(847
)






Loss on impairment of investment securities


(421
)


(2,238
)


172,532Intangible assets


(260
)


(4,180
)


(8,086
)Reversal of amortization of goodwill and goodwill impairment


128,327



145,772



107,934Capitalization of foreign exchange losses and interest expenses
    related to tangible assets


9,266



954



4,356Capitalization of interest expenses related to purchases of
    intangible assets


5,272



5,272



5,272Nonrefundable activation fees


(16,139
)


(50,325
)


(21,991
)Stock option compensation plan


(144
)






Convertible bonds payable


48,118



(19,340
)


(30,407
)Currency and interest rate swap


(4,056
)


8,295



(478,874
)Sales of stock by the equity method investee


7,440



(6,392
)


Consolidation of variable interest entity


(38
)






Convertible notes receivable


365,751



(412,383
)


Reclassification of SK C&C investment






83,785



47,645Retroactive application of equity method of accounting on SKBB
    investment


(2,168
)


(797
)


(21,025
)FIN 48 effect






(1,320
)


2,778Tax effect of the reconciling items


(115,268
)


109,368



46,947Effect of changes in tax law










30,066Net income based on U.S. GAAP

W
1,878,361


W
1,505,347


W
1,072,866Weighted average number of common shares outstanding


73,305,026



72,650,909



72,765,557Earnings per share based on U.S. GAAP:Basic earnings per share

W
25,624


W
20,720


W
14,744Diluted earnings per share

W
25,207


W
20,379


W
14,606   F-86




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  December 31,2006


2007


2008Shareholders equity based on Korean GAAP Adjustments :

W
9,483,088


W
11,687,633


W
11,824,440Investment securities without readily determinable fair value






(21,015
)


Intangible assets


993,802



1,096,547



1,151,974Reversal of amortization of goodwill and goodwill impairment


676,008



821,780



929,714Capitalization of foreign exchange losses and interest expenses
    related to tangible assets


56,788



57,742



62,098Capitalization of interest expenses related to purchase of
    intangible assets


(53,116
)


(47,844
)


(42,572
)Nonrefundable activation fees


(326,042
)


(376,367
)


(398,358
)Loans receivable for stock issued to employees


(7,526
)


(34,816
)


(60,908
)Convertible bonds payable


(1,347
)


(12,642
)


(43,049
)Currency and interest rate swap










(45,503
)Consolidation of variable interest entity


1,396



932



5,430Reclassification of SK C&C investment






(433,213
)


(7,114
)Retroactive application of equity method of accounting on SKBB
    investment


(20,140
)


(41,296
)


(62,382
)Minority interest in equity of consolidated affiliates


(170,246
)


(253,383
)


(1,175,959
)FIN 48 effect






(13,173
)


(10,440
)Tax effect of the reconciling items


85,674



226,877



87,821Shareholders equity based on U.S. GAAP

W
10,718,339


W
12,657,762


W
12,215,192     Year Ended December 31,2006


2007


2008Balance, beginning of the year

W
9,477,689


W
10,718,339


W
12,657,762Net income for the year


1,878,361



1,505,347



1,072,866Accumulated effect of FIN 48 adoption through 2006






(11,853
)


Dividends


(662,628
)


(581,340
)


(682,504
)Unrealized gain (loss) on valuation of securities, net of tax


183,155



959,452



(786,408
)Equity in capital surplus, retained earnings and other
    comprehensive income of affiliates (note a)


38,726



115,955



(64,825
)Conversion of convertible bonds payable


23,624



2,010



(6,277
)Treasury stock transactions


(209,078
)


(26,556
)


(14,137
)Foreign-based operations translation adjustments


(18,570
)


3,698



64,807Decrease (Increase) in loans receivable for stock issued to
    employees


7,060



(27,290
)


(26,092
)Balance, end of the year

W
10,718,339


W
12,657,762


W
12,215,192     (note a)
    This line item consists of the adjustments to the carrying
    amount of equity method investments based on the Companys
    proportionate pickup in affiliates using the equity method of
    accounting, which are directly adjusted to stockholders
    equity of affiliates, such as unrealized gains or losses on
    valuation of
    available-for-sale
    securities, foreign-based operations translation
    adjustments in affiliates and stock transactions by affiliates. F-87




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     December 31,2006


2007


2008Current assets:As reported

W
4,663,962


W
4,813,072


W
5,422,447U.S. GAAP adjustments : Deferred charges










406 Loans receivable for stock issued to employees


(2,208
)


(1,522
)


(1,252
) Consolidation of variable interest entity


(8,809
)


(16,077
)


(55,967
) Scope of consolidation


(40,189
)


(150,617
)


(836,324
) Tax effect of the reconciling items


39,241



46,979



53,055Current assets based on U.S. GAAP


4,651,997



4,691,835



4,582,365Non-current assets:As reported


11,576,006



14,235,863



17,051,224U.S. GAAP adjustments: Deferred charges


7,812



8,577



11,423 Capital lease


(576
)


(576
)


(576
) Investment securities without readily determinable
    fair value






(21,015
)


 Intangible assets


989,595



1,140,555



1,145,269 Reverse of amortization of goodwill and goodwill
    impairment


677,371



828,960



909,106 Capitalization of foreign exchange losses and
    interest expense related to tangible assets


56,788



57,742



62,098 Capitalization of interest expenses related to
    purchase of intangible assets


(53,116
)


(47,844
)


(42,572
) Nonrefundable activation fees


8,108



6,167



8,099 Loans receivable for stock issued to employees


(5,318
)


(33,294
)


(59,656
) Convertible bonds payable


(1,133
)


281



281 Currency and interest rate swap










(51,121
) Consolidation of variable interest entity


54,731



54,890



76,022 Scope of consolidation


(32,735
)


(275,780
)


(2,386,994
) Reclassification of SK C&C investment






(433,213
)


(7,114
) Retroactive application of equity method of
    accounting on SKBB investment


(20,140
)


(41,296
)


(62,382
) FIN 48 effect






374



(1,621
) Tax effect of the reconciling items






1,375



5,332Non-current assets based on U.S. GAAP


13,257,393



15,481,766



16,656,818Total assets based on U.S. GAAP

W
17,909,390


W
20,173,601


W
21,239,183   F-88




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  December, 312006


2007


2008Current liabilities:As reported

W
3,208,416


W
3,016,874


W
4,628,821U.S. GAAP adjustments: Deferred charges










406 Considerations for conversion right










26,577 Nonrefundable activation fees


142,697



170,761



218,284 Consolidation of variable interest entity


32,078



38,773



52,031 Scope of consolidation


(17,389
)


(285,677
)


(1,081,778
)Current liabilities based on U.S. GAAP

W
3,365,802


W
2,940,731


W
3,844,341Non-current liabilities:As reported


3,548,464



4,344,428



6,020,410U.S. GAAP adjustments : Deferred charges


7,812



8,577



11,423 Considerations for conversion right


214



12,923



16,753 Nonrefundable activation fees


191,453



211,773



188,173 Currency and interest rate swap










(5,618
) Consolidation of variable interest entity


227



296



698 Scope of consolidation


(19,563
)


(73,015
)


(1,373,619
) FIN 48 effect






13,950



9,049 Tax effect of the reconciling items


(51,216
)


(183,709
)


(34,446
)Non-current liabilities based on U.S. GAAP


3,677,391



4,335,223



4,832,823Total liabilities based on U.S. GAAP

W
7,043,193


W
7,275,954


W
8,677,164Minority interests:As reported

W
170,246


W
253,383


W
1,175,959U.S. GAAP adjustments : Intangible assets






47,604



31,704 Reversal of amortization of goodwill and goodwill
    impairment


1,363



7,180



(21,317
) Consolidation of variable interest entity


12,221



(1,188
)


(38,106
) Scope of consolidation


(35,972
)


(67,094
)


(801,413
)Total minority interests based on U.S. GAAP

W
147,858


W
239,885


W
346,827  F-89




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2006


2007


2008Cash flows from operating activities based on Korean GAAP

W
3,589,825


W
3,721,700


W
3,296,938Adjustments:Trading security cash flows


80,061



28,696



(40
)Consolidation of variable interest entity


(48,721
)


35,777



7,010Scope of consolidation


(6,384
)


11,363



(391,271
)Pre-acquisition cash flows of subsidiaries






(36,372
)


Discontinued operation (Note a)






(476,412
)


(213,899
)Cash flows from operating activities based on U.S. GAAP

W
3,614,781


W
3,284,752


W
2,698,738Cash flows from investing activities based on Korean GAAP

W
(2,535,153
)

W
(2,414,879
)

W
(3,875,394
)Adjustments:Trading security cash flows


(80,061
)


(28,696
)


40Increase in cash and cash equivalent due to merger






50,448



Consolidation of variable interest entity


37,611



(39,389
)


(11,006
)Scope of consolidation


17,035



15,559



11,036Pre-acquisition cash flows of subsidiaries






(1,784
)


Discontinued operation (Note a)






33,496



(51,631
)Cash flows from investing activities based on U.S. GAAP

W
(2,560,568
)

W
(2,385,245
)

W
(3,926,955
)Cash flows from financing activities based on Korean GAAP

W
(952,378
)

W
(1,041,255
)

W
869,415Adjustments:Consolidation of variable interest entity


17,716



5,016



1,126Scope of consolidation


(5,946
)


(2,475
)


239,147Pre-acquisition cash flows of subsidiaries






64,674



Discontinued Operation (Note a)






342,777



9,015Cash flows from financing activities based on U.S. GAAP

W
(940,608
)

W
(631,263
)

W
1,118,703The effect of exchange rate changes on cash and cash equivalents
    held in foreign currencies based on Korean GAAP

W
(9,317
)

W
6,097


W
37,371Adjustments:Consolidation of variable interest entity


(5,302
)


37



938Scope of consolidation










(4,129
)Discontinued Operation (Note a)






(4,971
)


The effect of exchange rate changes on cash and cash equivalents
    held in foreign currencies based on U.S. GAAP

W
(14,619
)

W
1,163


W
34,180   F-90




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  2006


2007


2008Net increase in cash and cash equivalents due to changes in
    consolidated subsidiaries based on Korean GAAP

W
14,568


W
102,079


W
36,413Adjustments:Scope of consolidation


(14,246
)


(81,218
)


(77,346
)Discontinued operation (Note a)






54,419



Net increase (decrease) in cash and cash equivalents due to
    changes in consolidated subsidiaries based on U.S. GAAP

W
322


W
75,280


W
(40,933
)Pre-acquisition cash flows of subsidiaries based on Korean GAAP






(11,396
)


17,250Adjustments:Scope of consolidation










(17,250
)Pre-acquisition cash flows of subsidiaries






(26,518
)


Discontinued operation (Note a)






37,914



Pre-acquisition cash flows of subsidiaries based on U.S. GAAP










Increases in cash and cash equivalents due to merger based on
    Korea GAAP






50,448



Adjustments:Increase in cash and cash equivalents due to merger






(50,448
)


Increase in cash and cash equivalents due to merger based on
    U.S. GAAP










Cash flows from discontinued operation based on Korean GAAP






(12,777
)


(256,515
)Adjustments:Discontinued operation (Note a)






12,777



256,515Cash flows from discontinued operation based on U.S. GAAP










Cash and cash equivalents at beginning of the year based on
    Korean GAAP

W
378,426


W
485,972


W
885,989Adjustment:Consolidation of variable interest entity


1,197



2,501



3,942Scope of consolidation






(9,541
)


(66,312
)Cash and cash equivalents at beginning of the year based on U.S.
    GAAP

W
379,623


W
478,932


W
823,619Cash and cash equivalents at end of the year based on Korean GAAP

W
485,972


W
885,989


W
1,011,467Adjustments:Consolidation of variable interest entity


2,501



3,942



2,010Scope of consolidation


(9,541
)


(66,312
)


(306,125
)Cash and cash equivalents at end of the year based on U.S GAAP

W
478,932


W
823,619


W
707,352     (Note a)
    The operation results of and cash flows from Helio LLC were
    presented as continued operation for U.S. GAAP purpose
    since the Company sold its investment in Helio LLC in exchange
    for 16.6% interest in Virgin Mobile USA Inc., which now operates
    Helio LLC essentially in the same manner. F-91




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   34.
    ADDITIONAL
    DISCLOSURES REQUIRED BY U.S. GAAP  a. Income
    Taxes
    Year Ended December 31,2006


2007


2008Currently payable

W
615,959


W
564,480


W
493,714Deferred


70,871



12,456



(332,034
)W
686,830


W
576,936


W
161,680     Year Ended December 31,2006


2007


2008Income taxes at statutory income tax rate of 25% in 2006, 2007
    and 2008

W
641,840


W
507,200


W
278,354Resident surtax payable


64,184



50,720



27,835Tax credit for investments, technology, human resource
    development and others


(110,785
)


(112,235
)


(158,681
)Special surtax for agriculture and fishery industries and other


20,183



18,370



23,296Tax effect from statutory tax rate change










(58,672
)Undistributed earnings of subsidiaries


1,777



5,326



110Other permanent differences


27,602



10,670



13,158Change in valuation allowance


42,029



96,885



36,280Recorded income taxes

W
686,830


W
576,936


W
161,680Effective tax rate


27.00
%


28.45
%


14.52
%  F-92




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,2006


2007


2008Current:Allowance for doubtful accounts

W
21,251


W
16,391


W
14,530Accrued interest income


(1,544
)


(1,971
)


(1,594
)Net operating loss carryforwards


1,121



2,081



1Tax credit carryforwards


19







570Accrued expenses and other


68,264



66,857



66,868W
89,111


W
83,358


W
80,375Non-current:Depreciation


(64,915
)


(56,359
)


(33,262
)Loss on impairment of investment securities


33,018



46,818



80,750Equity in losses (earnings) of affiliates


(28,232
)


(121,855
)


(20,151
)Undistributed earnings of subsidiaries


(17,179
)


(23,464
)


(59,122
)Tax free reserve for technology development


(211,215
)


(151,259
)


(80,707
)Tax free reserve for loss on disposal of treasury stock


(70,396
)


(70,396
)


Unrealized loss (gain) on valuation of long-term investment
    securities (accumulated other comprehensive income)


(163,992
)


(523,761
)


(77,738
)Tax credit carryforwards


24



24



1,066Net operating loss carryforwards


6,178



327



Deferred charges and other


37,147



34,617



(55,013
)W
(479,562
)

W
(865,308
)

W
(244,177
)Total deferred tax liabilities

W
(390,451
)

W
(781,950
)

W
(163,802
)     W W W W
 F-93




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  W W
      2007


2008Beginning of period

W
9,565


W
9,989Gross increases for tax position of prior years


501



186Gross decreases for tax position of prior years


(15
)


(2,629
)Lapses of statues of limitations






(474
)Gross increases for tax position of current year






2,233Gross decreases for tax position of current year


(62
)


Ending of period

W
9,989


W
9,305   W W
  W W W
       F-94




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  b. Information
    under U.S. GAAP with respect to Investments under
    SFAS No. 115
  available-for-sale held-to-maturity
  Gross


GrossCost


Unrealized


Unrealized


Impairment


Fair(Amortized Cost)


Gains


Losses


Losses


ValueAt December 31, 2006:Available-for-saleEquity securities

W
348,077


W
440,148


W



W
(7,145
)

W
781,080Debt securities


1,083,914



33,903



(46,107
)


(10,656
)


1,061,054Held-to-maturity
    securities


134















134W
1,432,125


W
474,051


W
(46,107
)

W
(17,801
)

W
1,842,268At December 31, 2007:Available-for-saleEquity securities

W
1,642,306


W
1,750,170


W
(683
)

W
(7,796
)

W
3,383,997Debt securities


470,280



9,293



(439
)


(10,656
)


468,478Held-to-maturity
    securities


94















94W
2,112,680


W
1,759,436


W
(1,122
)

W
(18,452
)

W
3,852,569At December 31, 2008:Available-for-saleEquity securities

W
1,878,049


W
681,260


W
(73
)

W
(208,453
)

W
2,350,783Debt securities


5,696











(552
)


5,144Held-to-maturity
    securities


112















112W
1,883,857


W
681,260


W
(73
)

W
(209,005
)

W
2,356,039   available-for-sale W W W W W W W W
  W W W
  c. Fair
    Value of Financial Instruments
    Cash
    and Cash Equivalents, Accounts Receivable (trade and other),
    Short-term Loans, Accounts Payable and Short-term
    Borrowings
   F-95




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##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Trading
    Securities and Long-term Investment Securities
    Long-term
    Bank Deposits
    Long-term
    Loans
    Bonds
    Payable, Bonds with Stock Warrant, Convertible Bonds, Long-term
    Borrowings, Long-term Payable  Other and Obligation
    under Capital Leases
      2006


2007


2008Carrying





Carrying





CarryingAmount


Fair


Amount


Fair


Amount


Fair(Note a)


Value


(Note a)


Value


(Note a)


ValueFinancial assets:Cash and cash equivalents and short-term financial instruments

W
576,017


W
576,017


W
956,441


W
956,441


W
914,228


W
914,228Trading securities


665,312



665,312



635,434



635,434



367,002



367,002Accounts receivable (trade and other)


3,065,481



3,065,481



2,642,195



2,642,195



2,893,283



2,893,283Short-term loans


60,440



60,440



74,603



74,603



106,013



106,013Investment securities:Listed equity and debts


1,842,268



1,842,268



3,852,569



3,852,569



2,356,039



2,356,039Non-listed equity and debts


141,138



N/A



128,718



N/A



75,028



N/ADerivative instruments assets


16,660



16,660



16,227



16,227



318,373



318,373Long-term bank deposits


10,430



10,430



15,512



15,512



75



75Long-term loans


13,250



9,938



45,524



34,143



85,975



82,996W
6,390,996






W
8,367,223






W
7,116,016Financial liabilities:Accounts payable

W
1,224,536


W
1,224,536


W
1,241,935


W
1,241,935


W
1,107,202


W
1,107,202Short-term borrowings


63,612



63,612



11,737



11,737



180,827



180,827Derivative instruments liabilities


113,424



113,424



123,557



123,557



242,186



242,186Bonds payable, long-term borrowings, convertible bonds,
    long-term payables  other and obligation under
    capital leases, including current portion


3,595,880



3,667,748



3,460,939



3,508,681



4,943,630



4,855,897W
4,997,452






W
4,838,168






W
6,473,845     (note a)
    These carrying amounts represent the amounts determined under
    U.S. GAAP. F-96




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##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Fair
    value hierarchy
        December, 31,2008


Level 1


Level 2


Level 3Assets:Trading securities

W
367,002


W



W
367,002


W
Available for sale securities:Equity securities


2,350,783



2,350,783







Debt securities


5,144







5,144



Held-to-maturity
    securities


112







112



Derivatives:Currency swap


318,373







318,373



W
3,041,414


W
2,350,783


W
690,631


W
Liabilities:Derivatives:Currency swap

W
210,468


W



W
210,468


W
Interest rate swap


31,718







31,718



W
242,186


W




242,186


W
     Securities
   F-97




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##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Derivatives
      d. Comprehensive
    Income
    2006


2007


2008Net income

W
1,878,361


W
1,505,347


W
1,072,866Other comprehensive income:Available-for-sale
    securitiesUnrealized gain (loss) on investment securities


252,218



1,358,908



(1,080,978
)Less impact of realized losses (gains)


446



(29,603
)


1,730Tax effect


(69,509
)


(369,853
)


292,840Net change from
    available-for-sale
    securities


183,155



959,452



(786,408
)Foreign-based operations translation adjustments


(18,570
)


3,698



64,807Total other comprehensive income


164,585



963,150



(721,601
)Comprehensive income

W
2,042,946


W
2,468,497


W
351,265   e. Goodwill
    and other intangible assets
   F-98




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##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Goodwill
    2006


2007


2008Beginning of period

W
3,418,212


W
3,419,114


W
3,599,135Goodwill increase due to acquisition and subsidiary change
    during the period


13,426



180,145



923Goodwill impairment losses


(12,524
)






(107,138
)Goodwill disposed of during the period






(124
)


(55
)Ending of period

W
3,419,114


W
3,599,135


W
3,492,865   Other
    Intangible Assets
    December 31, 2006


December 31, 2007


December 31, 2008Accumulated





AccumulatedGross





Gross


Amortization


Gross


AmortizationCarrying


Accumulated


Carrying


and


Carrying


andAmount


Amortization


Amount


Impairment


Amount


ImpairmentAmortized intangible assets :IMT license (13 years)

W
1,188,547


W
(278,521
)

W
1,188,547


W
(368,849
)

W
1,188,547


W
(459,178
)Customer relationship (4 years)


99,783



(99,783
)


106,783



(99,783
)


106,783



(100,671
)Software purchased (5 years)


883,004



(310,184
)


1,083,552



(478,849
)


1,216,273



(604,412
)Software development cost (5 years)


242,164



(196,510
)


240,629



(223,508
)


207,294



(188,028
)Other (2 to 20 years)


308,747



(98,035
)


455,910



(134,349
)


377,121



(164,433
)Total

W
2,722,245


W
(983,033
)

W
3,075,421


W
(1,305,338
)

W
3,096,018


W
(1,516,722
)   W W W W W W W W
 F-99




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##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  f. Condensed
    Consolidated Income Statements under U.S. GAAP
    2006


2007


2008Operating revenue:Wireless services

W
9,025,209


W
9,531,488


W
9,553,556Interconnection


1,033,390



1,062,195



1,149,196Digital handset sales






51,714



16,425Other


483,203



566,989



438,375Total operating revenue


10,541,802



11,212,386



11,157,552Total operating expenses


(7,720,028
)


(9,144,306
)


(9,403,974
)Operating income


2,821,774



2,068,080



1,753,578Other income (expenses), net


(135,742
)


(197,428
)


(556,072
)Income before income taxes and appropriate item below


2,686,032



1,870,652



1,197,506Provision for income taxes


(673,330
)


(483,963
)


(132,494
)Minority interests in losses of consolidated subsidiaries


21,752



54,281



121,129Equity in earnings (loss) of unconsolidated businesses, net of
    income tax


(156,093
)


64,538



(113,275
)Net income

W
1,878,361


W
1,505,347


W
1,072,866   g. Segment
    h. Supplemental
    Information relating to Cash Flows
    2006


2007


2008Cash paid for interest (net of amounts capitalized)

W
226,442


W
169,311


W
243,319Cash paid for income taxes


660,188



591,672



422,506  F-100




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##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  i. Accrued
    Severance Indemnities
    Year Ending December 31,2009

W
1,4922010


8702011


1,8902012


2,0552013


1,3732014
    ~
    2018


28,468Total

W
36,148     j. New
    Accounting Pronouncements
  157-1 No. 157-2 FSP 157-1 FSP 157-2 Fair value of financial instruments
   F-101




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##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        14-1,
  07-5, 07-5). 07-5, 07-5 07-5
  No. FAS 140-4 FIN 46R-8, No. FAS 140-4 FIN 46R-8). No. FAS 140-4 FIN 46R-8 No. FAS 140-4 FIN 46R-8
  No. EITF 99-20-1, No. 99-20 No. EITF 99-20-1). No. EITF 99-20-1 No. 99-20 EITF 99-20
 F-102




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##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  No. EITF 99-20-1 EITF 99-20 No. EITF 99-20-1
  No. 141R-1, No. 141R-1 No. 141R-1
  No. FAS 115-2 FAS 124-2. No. FAS 115-2 FAS 124-2 other-than-temporary other-than-temporary No. FAS 115-2 FAS 124-2 No. FAS 115-2 FAS 124-2
 F-103