##### Table of Contents





As filed with the Securities and Exchange Commission on
    June 30, 2008
    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, 2007ORo

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 1934Date 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)
 11, Euljiro 2-Ga, Jung-gu,
    Seoul, Korea
 (Address of principal executive
    offices)
 Mr. Jinmo Kim
    11, Euljiro 2-Ga, Jung-gu, Seoul, Korea
    Telephone No.:
    82-2-6100-2114
    Facsimile No.:
    82-2-6100-7948 (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, Inc.*  *
    
    Not for trading, but only in
    connection with the registration of the American Depositary
    Shares. Securities registered or to be
    registered pursuant to Section 12(g) of the Act.
 None
 Securities for which there is a
    reporting obligation pursuant to Section 15(d) of the
    Act.
 None
    Indicate the number of outstanding
    shares of each of the issuers classes of capital or common
    stock as of the close of the period covered by the annual report.
 81,193,711 shares of common
    stock, par value W500 per share
 Indicate by check mark if the
    registrant is a well-known seasoned issuer, as defined in
    Rule 405 of the Securities
    Act.  Yes þ     No o
 If this report is an annual or
    transition report, indicate by check mark if the registrant is
    not required to file reports pursuant to Section 13 or
    15(d) of the Securities Exchange Act of
    1934.  Yes o     No þ
 Indicate by check mark whether the
    registrant (1) has filed all reports required to be filed
    by Section 13 or 15(d) of the Securities Exchange Act of
    1934 during the preceding 12 months (or for such shorter
    period that the registrant was required to file such reports),
    and (2) has been subject to such filing requirements for
    the past
    90 days.  Yes þ     No o
 Indicate by check mark whether the
    registrant is a large accelerated filer, an accelerated filer,
    or a non-accelerated filer. See definition of accelerated
    filer and large accelerated filer in
    Rule 12b-2
    of the Exchange Act. (Check one):
 Large accelerated
    filer þ     Accelerated
    filer o     Non-accelerated
    filer o
 Indicate by check mark which basis
    of accounting the registrant has used to prepare the financial
    statements included in this filing:
 U.S. GAAP o     IFRS o     Other þ
 Indicate by check mark which
    financial statement item the registrant has elected to follow.
    Item 17 o     Item 18 þ
 If this is an annual report,
    indicate by check mark whether the registrant is a shell company
    (as defined in
    Rule 12b-2
    of the Exchange
    Act).  Yes o     No þ
  (APPLICABLE ONLY TO ISSUERS
    INVOLVED IN BANKRUPTCY PROCEEDINGS
    DURING THE PAST FIVE YEARS)
 Indicate by check mark whether the
    registrant has filed all documents and reports required to be
    filed by Sections 12, 13 or 15(d) of the Securities
    Exchange Act of 1934 subsequent to the distribution of
    securities under a plan confirmed by a court.
 Yes o     No o




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##### Table of Contents





TABLE OF
    CONTENTS
  PageITEM 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


21Item 4.A.



History and Development of the Company


21Item 4.B.



Business Overview


24Item 4.C.



Organizational Structure


49Item 4.D.



Property, Plants And Equipment


50ITEM 4A.

UNRESOLVED STAFF COMMENTS


50ITEM 5.

OPERATING AND FINANCIAL REVIEW AND PROSPECTS


50Item 5.A.



Operating Results


51Item 5.B.



Liquidity and Capital Resources


58Item 5.C.



Research and Development


71Item 5.D.



Trend Information


72Item 5.E.



Off-Balance Sheet Arrangements


72Item 5.F.



Tabular Disclosure of Contractual Obligations


72ITEM 6.

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES


72Item 6.A.



Directors and Senior Management


72Item 6.B.



Compensation


74Item 6.C.



Board Practices


75Item 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


83ITEM 8.

FINANCIAL INFORMATION


84Item 8.A.



Consolidated Statements and Other Financial
    Information


84Item 8.B.



Significant Changes


87ITEM 9.

THE OFFER AND LISTING


87Item 9.A.



Offering and Listing Details


87Item 9.B.



Plan of Distribution


87Item 9.C.



Markets


88Item 9.D.



Selling Shareholders


95Item 9.E.



Dilution


95Item 9.F.



Expenses of the Issue


95 i




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PageITEM 10.

ADDITIONAL INFORMATION


95Item 10.A.



Share Capital


95Item 10.B.



Memorandum and Articles of Association


95Item 10.C.



Material Contracts


108Item 10.D.



Exchange Controls


108Item 10.E.



Taxation


113Item 10.F.



Dividends and Paying Agents


117Item 10.G.



Statements by Experts


117Item 10.H.



Documents on Display


117Item 10.I.



Subsidiary Information


117ITEM 11.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
    MARKET RISK


117ITEM 12.

DESCRIPTION OF SECURITIES OTHER THAN EQUITY
    SECURITIES


118ITEM 13.

DEFAULTS, DIVIDEND ARREARAGES AND
    DELINQUENCIES


119ITEM 14.

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY
    HOLDERS AND USE OF PROCEEDS


119ITEM 15.

CONTROLS AND PROCEDURES


119ITEM 16.

RESERVED


120Item 16A.



AUDIT COMMITTEE FINANCIAL EXPERT


120Item 16B.



CODE OF ETHICS


120Item 16C.



PRINCIPAL ACCOUNTANT FEES AND SERVICES


120Item 16D.



EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT
    COMMITTEES


121Item 16E.



PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND
    AFFILIATED PURCHASERS


121ITEM 17.

FINANCIAL STATEMENTS


123ITEM 18.

FINANCIAL STATEMENTS


123ITEM 19.

EXHIBITS


123EX-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-15.1 FRAMEWORK ACT ON TELECOMMUNICATIONSEX-15.2 ENFORCEMENT DECREE OF THE FRAMEWORK ACTEX-15.3 TELECOMMUNICATIONS BUSINESS ACTEX-15.4 ENFORECMENT DECREE OF THE TELECOMMUNICATIONS BUSINESS ACTEX-15.5 AMENDMENT TO THE GOVERNMENT ORGANIZATION ACTEX-99.1 CONSENT OF DELOITTE ANJIN LLC   ii




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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 to spend approximately Won 1.75 trillion for capital
    expenditures in 2008 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 recent acquisition of an
    additional 38.6% stake in hanarotelecom inc., 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 31,2003

2004

2005

2006

2007

2007(In billions of Won and millions of dollars, except per share
    and percentage data)INCOME STATEMENT DATAKorean GAAP:Total Operating
    Revenue(1)

W
10,272
.1

W
10,570
.6

W
10,721
.8

W
11,028
.0

W
12,018
.2

US$
12,842
.7Cellular
    Service(1)


10,091
.8


10,297
.6


10,361
.9


10,515
.6


11,237
.2


12,008
.1Other(2)


180
.3


273
.0


359
.9


512
.4


781
.0


834
.6Operating Expenses


7,167
.0


8,130
.9


8,051
.2


8,406
.9


10,207
.8


10,908
.0Operating Income


3,105
.1


2,439
.7


2,670
.6


2,621
.1


1,810
.4


1,934
.6Income before Income Taxes and Minority Interest


2,754
.3


2,123
.2


2,561
.6


2,021
.6


1,985
.3


2,121
.5Net
    Income(3)


1,965
.3


1,493
.4


1,868
.3


1,449
.6


1,562
.3


1,669
.4Net Income per Share of Common
    Stock(4)


26,187



20,261



25,443



19,801



22,696



24
.25Diluted Net Income per Share of Common
    Stock(4)


26,187



20,092



25,036



19,523



22,375



23
.91Dividends Declared per Share of Common Stock


5,500



10,300



9,000



8,000



9,400



10
.04Weighted Average Number of Shares


75,078,219



73,614,296



73,614,296



73,305,026



72,650,909



72,650,909 3




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##### Table of Contents



As of or for the Year Ended December 31,2003


2004

2005

2006

2007

2007(In billions of Won and millions of dollars, except per share
    and percentage data)U.S. GAAP:Total Operating Revenue

W
10,225
.1


W
10,534
.6

W
10,701
.4

W
10,541
.8

W
11,212
.4

US$
11,981
.6Operating Expenses


7,044
.5



8,137
.6


7,847
.7


7,720
.0


9,144
.3


9,771
.6Operating Income


3,180
.6



2,397
.0


2,853
.7


2,821
.8


2,068
.1


2,210
.0Net Income


2,062
.7



1,553
.1


2,027
.6


1,880
.5


1,506
.1


1,609
.4Net Income per Share of Common
    Stock(4)


27,475




21,097



27,543



25,653



20,731



22
.15Diluted Net Income per Share of Common
    Stock(4)


27,475




20,918



27,089



25,236



20,390



21
.79BALANCE SHEET DATAKorean GAAP:Working Capital
    (Deficiency)(5)

W
(461
.4
)

W
1,323
.8

W
1,735
.2

W
1,455
.5

W
1,796
.2

US$
1,919
.4Property and Equipment, Net


4,641
.5



4,703
.9


4,663
.4


4,507
.3


4,969
.4


5,310
.3Total Assets


13,818
.2



14,283
.4


14,704
.8


16,240
.0


19,048
.9


20,355
.8Non-current
    Liabilities(6)


3,193
.5



4,010
.7


3,513
.9


3,548
.5


4,344
.4


4,642
.5Capital Stock


44
.6



44
.6


44
.6


44
.6


44
.6


47
.7Total Shareholders Equity


6,093
.8



7,205
.7


8,327
.5


9,483
.1


11,687
.6


12,489
.5U.S. GAAP:Working Capital (Deficiency)


(445
.5
)


1,311
.3


1,587
.2


1,286
.2


1,751
.1


1,871
.2Total Assets


15,586
.2



15,576
.8


16,351
.2


17,929
.5


20,214
.9


21,601
.7Total Shareholders Equity


7,014
.7



8,237
.0


9,472
.4


10,738
.5


12,699
.11


13,570
.3OTHER FINANCIAL DATAKorean GAAP:EBITDA(3)(7)

W
4,705
.6


W
4,087
.7

W
4,429
.5

W
3,879
.1

W
4,357
.7

US$
4,656
.6Capital
    Expenditures(8)


1,647
.6



1,631
.9


1,416
.6


1,498
.1


1,816
.0


1,940
.5R&D
    Expenses(9)


300
.7



336
.1


321
.1


279
.0


293
.1


313
.2Internal R&D


235
.8



267
.1


252
.0


212
.0


218
.7


233
.7External R&D


64
.9



69
.0


69
.1


67
.0


74
.4


79
.5Depreciation and Amortization


1,646
.3



1,752
.5


1,675
.5


1,698
.4


2,000
.7


2,138
.0Cash Flow from Operating Activities


3,329
.4



2,527
.9


3,407
.1


3,589
.8


3,710
.7


3,965
.3Cash Flow from Investing Activities


(1,415
.1
)


(1,470
.3)


(1,938
.2)


(2,535
.2)


(2,399
.0)


(2,563
.6)Cash Flow from Financing Activities


(2,261
.0
)


(968
.6)


(1,429
.0)


(952
.4)


(856
.0)


(914
.7)Margins (% of total sales):EBITDA
    Margin(7)


45
.8
%


38
.7%


41
.4%


35
.2%


36
.6%


36
.6%Operating Margin


30
.2



23
.1


24
.9


23
.8


15
.1


15
.1Net Margin


19
.1



14
.1


17
.5


13
.2


13
.0


13
.0 4




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As of or for the Year Ended December 31,2003


2004

2005

2006

2007

2007(In billions of Won and millions of dollars, except per share
    and percentage data)U.S. GAAP:EBITDA(7)


4,679
.1



3,970
.4


4,412
.2


4,529
.6


3,961
.7


4,233
.5Capital
    Expenditures(8)


1,668
.0



1,656
.9


1,429
.3


1,538
.0


1,854
.0


1,981
.2Cash Flow from Operating Activities


3,144
.3



3,237
.9


3,296
.8


3,614
.8


3,284
.8


3,510
.2Cash Flow from Investing Activities


(1,285
.5
)


(1,634
.1)


(1,816
.5)


(2,560
.6)


(2,435
.7)


(2,602
.8)Cash Flow from Financing Activities


(2,205
.5
)


(1,514
.8)


(1,439
.3)


(940
.6)


(631
.3)


(674
.6)   As of or for the Year Ended December 31,2003

2004

2005

2006

2007

2007SELECTED OPERATING DATAPopulation of Korea
    (millions)(10)


47
.9


48
.2


48
.3


48
.3


48
.5


48
.5Our Wireless
    Penetration(11)


38
.2%


39
.0%


40
.4%


42
.0%


45
.3%


45
.3%Number of
    Employees(12)


6,286



7,353



6,646



7,676



9,485



9,485Total Sales per Employee (millions)

W
1,634
.1

W
1,437
.6

W
1,613
.3

W
1,436
.7

W
1,267
.1

US$
1,354
.0Wireless
    Subscribers(13)


18,313,135



18,783,338



19,530,117



20,271,133



21,968,169



21,968,169Average Monthly Outgoing Voice Minutes per
    Subscriber(14)


197



194



197



201



201



201Average Monthly Revenue per
    Subscriber(15)

W
39,739


W
39,689


W
40,205


W
40,220


W
40,154


US$
42
.91Average Monthly Churn
    Rate(16)


1
.2%


1
.7%


1
.8%


2
.0%


2
.6%


2
.6%Digital Cell Sites


8,310



9,458



10,142



12,515



16,099



16,099     *
    
    The conversion into Dollars was
    made at the rate of Won 935.8 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 612.0 billion for 2003, Won
    649.8 billion for 2004 and Won 294.6 billion for 2005
    from the sale of digital handsets and Won 1,017.1 billion
    for 2003, Won 849.4 billion for 2004, Won
    898.6 billion for 2005, Won 1,033.4 billion for 2006
    and Won 1,062.2 billion for 2007 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 until the inclusion of HELIO
    LLC, as our consolidated subsidiary, as of November 1,
    2007. See Item 4.B. Business Overview 
    Interconnection.(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, 2005 and 2006 appearing in our
    consolidated financial statements included elsewhere in this
    report have been reclassified in accordance with SKAS
    No. 25.(4)
    
    Income per share of common stock 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 of common stock
    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 and 2007.(5)
    
    Working capital means current
    assets minus current liabilities.(6)
    
    Our monetary assets and liabilities
    denominated in foreign currencies are valued at the exchange
    rate of Won 1,198 to US$1.00 as of December 31, 2003, 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 and Won 938 to US$1.00 as of
    December 31, 2007, the rates of exchange permitted under
    Korean GAAP as of those dates. See note 2(w) of the notes
    to our consolidated financial statements.(7)
    
    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, leverage and liquidity. Since the
    telecommunications business is a very capital intense business,
    capital expenditures and level of debt and interest expenses may
    have a significant 5




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##### Table of Contents



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.(8)
    
    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.(9)
    
    Includes donations to Korean
    research institutes and educational organizations. See
    Item 5.C. Research and Development.(10)
    
    Population estimates based on
    historical data published by the National Statistical Office of
    Korea.(11)
    
    Wireless penetration is determined
    by dividing our subscribers by total estimated population, as of
    the end of the period.(12)
    
    Includes regular employees and
    temporary employees. See Item 6.D. Employees.(13)
    
    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.(14)
    
    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 weighted
    average number of subscribers for the period, then dividing that
    number by the number of months in the period. The monthly
    weighted 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.(15)
    
    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
    weighted 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 44,546 for 2003, Won 43,542 for 2004, Won
    44,167 for 2005, Won 44,599 for 2006 and Won 44,416 for 2007.(16)
    
    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.    As of or for the Year Ended December 31,2003


2004


2005


2006


2007


2007(1)(In billions of Won and millions of dollars)Net Income

W
2,062
.7


W
1,553
.1


W
2,027
.6


W
1,880
.5


W
1,506
.1


US $
1,609
.4LESS: Interest income


(93
.9
)


(86
.7
)


(62
.6
)


(86
.8
)


(99
.0
)


(105
.8
)ADD: Interest expense


387
.1



291
.0



226
.8



241
.7



204
.0



218
.0Taxes


811
.5



611
.1



667
.1



686
.8



576
.9



616
.5Depreciation and Amortization


1,511
.7



1,601
.9



1,553
.3



1,807
.4



1,773
.7



1,895
.4EBITDA

W
4,679
.1


W
3,970
.4


W
4,412
.2


W
4,529
.6


W
3,961
.7


US $
4,233
.5     (1)
    
    The conversion into Dollars was
    made at the rate of Won 935.8 to US$1.00. See note 2(a) of
    the notes to our consolidated financial statements. 6




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##### Table of Contents



As of or for the Year Ended December 31,2003


2004


2005


2006


2007


2007(1)(In billions of Won and millions of dollars)Net Income

W
1,965
.3


W
1,493
.4


W
1,868
.3


W
1,449
.6


W
1,562
.3


US $
1,669
.4LESS: Interest income


(86
.5
)


(80
.5
)


(61
.1
)


(80
.0
)


(93
.9
)(2)


(100
.4
)(2)ADD: Interest expense


391
.5



303
.4



253
.5



239
.1



235
.3
(2)


251
.5
(2)Taxes


789
.0



629
.8



693
.3



572
.0



686
.2
(2)


733
.3
(2)Depreciation and Amortization


1,646
.3



1,741
.6



1,675
.5



1,698
.4



1,967
.8
(2)


2,102
.8
(2)EBITDA

W
4,705
.6


W
4,087
.7


W
4,429
.5


W
3,879
.1


W
4,357
.7


US $
4,656
.6     (1)
    
    The conversion into Dollars was
    made at the rate of Won 935.8 to US$1.00. See note 2(a) of
    the notes to our consolidated financial statements.(2)
    
    In accordance with our adoption of
    SKAS No. 25 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 shown in the table above exclude, with respect to
    subsidiaries newly consolidated in 2007, the income earned and
    expense incurred by such subsidiaries prior to the date of
    consolidation. As a result, the interest income, interest
    expense, taxes and depreciation and amortization amounts for
    2007 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 year ended December 31,
    2007.  Exchange
    Rates
    At End of Year Ended December 31,Period


Average
    Rate(1)


High


Low2003


1,192



1,193



1,262



1,1462004


1,035



1,145



1,195



1,0352005


1,010



1,023



1,060



9972006


930



951



1,003



9142007


936



928



950



903   Past Six MonthsHigh


Low(Won per US$1.00)December 2007


943



919January 2008


953



935February 2008


948



937March 2008


1,021



947April 2008


1,005



974May 2008


1,047



1,004June 2008 (through June 27, 2008)


1,044



1,016     (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. The average rate for the monthly periods were calculated
    based on the average noon buying rate of each day of the month
    (or portion thereof). 7




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##### Table of Contents



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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##### Table of Contents



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.
       9




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##### Table of Contents



Implementation
    of 3G and WiBro technologies has required, and may continue to
    require, significant capital and other expenditures, which we
    may not recoup.
        Our
    growth strategy calls for significant investments in new
    businesses and regions, including businesses and regions in
    which we have limited experience.
   10




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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.
   11




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##### Table of Contents



We may
    have to make further financing arrangements to meet our capital
    expenditure requirements and debt payment
    obligations.
        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.
   12




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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.
         13




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##### Table of Contents



We are
    subject to additional regulation as a result of our dominant
    market position in the wireless telecommunications sector, which
    could harm our ability to compete effectively.
     14




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##### Table of Contents



Financial
    difficulties and charges of financial statement irregularities
    at our affiliate, SK Networks (formerly SK Global), may cause
    disruptions in our business.
    debt-for-equity
      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.
   15




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##### Table of Contents



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.
      
    a slowdown in consumer spending and the overall economy;
    adverse changes or volatility in foreign currency reserve
    levels, commodity prices, exchange rates, interest rates or
    stock markets;
    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 manufacturing bases
    from Korea to China);
    the economic impact of any pending or future free trade
    agreements, including the Free Trade Agreement recently
    negotiated with the United States;
    social and labor unrest;
    substantial decreases in the market prices of Korean real estate;
    a decrease in tax revenues and a substantial increase in the
    Governments expenditures for unemployment compensation and
    other social programs that, together, would lead to an increased
    government budget deficit;
    financial problems or lack of progress in restructuring Korean
    conglomerates, other large troubled companies, their suppliers
    or the financial sector;
    loss of investor confidence arising from corporate accounting
    irregularities and corporate governance issues of certain Korean
    conglomerates;
    geo-political uncertainty and risk of further attacks by
    terrorist groups around the world;
    the recurrence of severe acute respiratory syndrome 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. 16




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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 on the prices of our common stock and
    the 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 37.9% of our total
    consolidated long-term debt, including current portion, as of
    December 31, 2007; 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 shares; and
    the secondary market price of the ADSs.    Increased
    tensions with North Korea could have an adverse effect on us and
    the prices of our common stock and the ADSs.
       17




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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.    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 to them, and these sales
    might adversely affect the market price of our common stock or
    ADRs.
   18




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##### Table of Contents



Sales
    of our shares by companies in the SK Group, POSCO and/or other
    large shareholders may adversely affect the prices of our common
    stock 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.
   19




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##### 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
    U.S. Securities Act of 1933, as amended, 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
    U.S. 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.
    After
    the exchange of ADSs into our underlying common shares, seller
    or purchasers of the underlying common shares may have to pay
    securities transaction tax upon the transfer of the
    shares.
       20




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##### Table of Contents



A
    holder of our ADSs may not be able to enforce a judgment of a
    foreign court against us.
    We are
    generally subject to Korean corporate governance and disclosure
    standards, which may differ from those in other
    countries.
    Item 4.
    INFORMATION
    ON THE COMPANY  Item 4.A.
    History
    and Development of the Company  state-of-the-art
     21




---



##### Table of Contents



100-999, 82-2-6100-2114.
  Korean
    Telecommunications Industry
             22




---



##### Table of Contents



As of or for the Year Ended December 31,2003

2004

2005

2006

2007(In thousands, except for per population amounts)Population of
    Korea(1)


47,849



48,082



48,294



48,297



48,456Wireless
    Subscribers(2)


33,592



36,586



38,342



40,197



43,498Wireless Subscribers per 100 Population


70
.2


76
.1


79
.4


83
.2


89
.8Telephone Lines in
    Service(2)


22,877



22,871



22,920



23,119



23,130Telephone Lines per 100 Population


47
.8


47
.6


47
.5


47
.9


47
.7     (1)
    
    Source: National Statistical Office
    of Korea(2)
    
    Source: MIC      As of December 31,2003


2004


2005


2006


2007(In thousands)Number of Wireless Internet Enabled Handsets


31,431




35,017




37,202




38,894




41,598Total Number of Wireless Subscribers


33,592




36,586




38,342




40,197




43,498Penetration of Wireless Internet Enabled Handsets


93
.6
%


95
.7
%


97
.0
%


96
.8
%


95
.6
%     Source: MIC.
    As of December 31,2003


2004


2005


2006


2007Number of Internet
    Users(1)


29,220



31,580



33,010



34,120



34,820Number of Broadband
    Subscribers(2)


11,172



11,921



12,191



14,043



14,709     (1)
    
    Source: KRNIC.(2)
    
    Source: MIC. Includes subscribers
    accessing Internet service using digital subscriber line, or
    xDSL, connections; cable modem connections; local area network,
    or LAN, connections; and satellite connections. 23




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##### Table of Contents



Item 4.B.
    Business
    Overview  Overview
  state-of-the-art
  
    Cellular voice services.  We provide wireless
    voice transmission services to our subscribers through our
    backbone cellular networks and also offer wireless global
    roaming services though 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.
    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. In addition, in March
    2008, we completed the acquisition of an additional 38.6% stake
    in hanarotelecom, which is the second-largest fixed-line
    operator in Korea. For more information about our acquisition of
    an additional equity interest in hanarotelecom, see
     Our Services  Digital Convergence
    and New Business below.      Our
    Business Strategy
  Core
    Business Strategies
      
    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 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 and are currently expanding the
    coverage area of our WiBro service. In June 2007, we began HSUPA
    upgrades to our WCDMA network, which we expect to complete by
    the end of 2009. 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 24




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##### Table of Contents



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 us with 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 38.6% equity stake in
    hanarotelecom, Koreas second-largest fixed-line operator.
    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 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.
    Continue global expansion by seeking opportunities in
    overseas markets.  We continue to seek
    opportunities to expand into various overseas markets. In light
    of the high saturation of the 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.  Our
    Services
     25




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##### Table of Contents



Cellular
    Voice Services
      T-Roaming Services.
   26




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##### 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:  Ø
    MelOn, a music portal 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, 2007, we had
    approximately 9.8 million subscribers to our MelOn service;Ø
    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;Ø
    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; andØ
    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.   27




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##### Table of Contents




    Wireless Financial Services:  We also
    offer our subscribers a range of wireless finance-related
    contents and m-commerce services. Our wireless financial
    businesses include:  Ø
    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;Ø
    Moneta Transportation, 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. Moneta Transportation requires a
    WCDMA-capable handset with a built-in universal subscriber
    identity module, or USIM, card;Ø
    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;Ø
    11th
    Street, an online shopping mall that links wired and
    wireless shopping services; andØ
    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.  Digital
    Convergence and New Businesses
    video-on-demand
    Satellite DMB Business.
 28




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##### Table of Contents



pay-per-view
    Telematics Service.
      Global
    Business
      United States.
   29




---



##### Table of Contents



China.
  U-Land Chinese-language
 30




---



##### Table of Contents



E-eye E-eye
    Vietnam.
    Mongolia.
  Regional and International Strategic
    Alliances. T-Mobile
  Provision of Wireless Internet Platforms and Cellular Network
    Solutions to Foreign Cellular Network
    Operators.
 31




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##### Table of Contents



Other
    Products and Services
  International Calling Services. Web-to-phone
  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 subscribers can meet to exchange information and ideas and
    share multimedia contents, including through the publication of
    personal homepages and blog sites. As of December 31, 2007,
    our Cyworld portal service had approximately 22 million
    subscribers. 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. We plan to continue expanding our Global
    Cyworld community, including to other countries in Asia.      Revenues,
    Rates and Facility Deposits
   32




---



##### Table of Contents



As of or for the Year Ended December 31,2005

2006

2007(In billions of Won)Initial Subscription Fees

W
232
.3

W
252
.4

W
392
.4Monthly Fees


3,365
.1


3,629
.5


3,949
.8Usage
    Charges(1)


5,538
.8


5,565
.9


5,763
.0Interconnection Revenue


898
.6


1,033
.4


1,062
.2Revenue from Sales of Digital
    Handsets(2)


294
.6






51
.7Other Cellular
    Revenue(3)


32
.5


34
.4


18
.1Total

W
10,361
.9

W
10,515
.6

W
11,237
.2Additional Facility Deposits

W
3
.4

W
9
.0

W
2
.4Refunded Facility Deposits


11
.0


11
.7


17
.1Facility Deposits at Period End


23
.8


21
.1


6
.4     (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)
    
    Until its sale to
    Pantech & Curitel in July 2005, our revenue from
    handset sales consisted of sales by our former subsidiary, SK
    Teletech. With the inclusion of HELIO as a consolidated
    subsidiary as of November 2007, revenue from handset sales
    currently consists of sales by HELIO.(3)
    
    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 four Data Plans that provide unlimited
    wireless data services for monthly fees ranging from Won 3,500
    to Won 25,000. Our Data Plans include NATE only
    plans, as well as NATE + June plans. 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 10,000 and Won 30,000.   33




---



##### Table of Contents



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;
    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 31,2005


2006


2007Subscribers


19,530,117




20,271,133




21,968,169Subscribers Growth Rate


4
.0
%


3
.8
%


8
.4
%Activations


5,057,176




5,573,799




8,344,784Deactivations


4,310,397




4,832,783




6,647,748Average Monthly Churn
    Rate(1)


1
.8
%


2
.0
%


2
.6
%     (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
   35




---



##### Table of Contents



Marketing
    and Service Distribution
  Marketing,
    Sales and Service Network
     36




---



##### Table of Contents



Marketing
    Strategies and Marketing Information Management
  Next Generation Marketing Project.
  www.tworld.co.kr
  New T-brand Marketing Strategy.
  Interconnection
      Domestic
    Calls
   37




---



##### Table of Contents



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

SK Telecom

KTF

LGT2004

W
31
.81

W
47
.66

W
58
.552005


31
.19


46
.70


54
.982006


33
.13


40
.06


47
.012007


32
.78


39
.60


45
.13   mobile-to-mobile
  Wireless-to-Wireless. wireless-to-wireless
  International
    Calls
    International
    Roaming Arrangements
   38




---



##### Table of Contents



Digital
    Cellular Network
    CDMA
    Networks
      CDMA
    1xRTT and CDMA 1x EV-DO Networks
      WCDMA
    Network
  HSDPA-upgraded
   39




---



##### 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 KTF or LGT subscriber (for which
    transmissions would be routed to KTF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.       40




---



##### 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 2.9% interest in the
    outstanding capital stock of POSCO, with a book value as of
    December 31, 2007 of Won 1,426.8 billion. POSCO is the
    largest fully integrated steel producer in Korea, and one of the
    largest steel producers in the world.
    hanarotelecom.We currently own a 43.4% interest in
    hanarotelecom with a book value, following our acquisition of a
    38.6% equity stake in the company in March 2008, of Won
    1,206.3 billion as of March 31, 41




---



##### Table of Contents



2008. hanarotelecom currently provides fixed-line telephone and
    broadband-based Internet services and Hana TV, a
    video-on-demand
    service and plans to roll out real-time IP TV services in the
    future.  
    LG Powercomm.  We currently own a 5.0% interest
    in LG Powercomm (formerly Powercomm Corporation), with a book
    value as of December 31, 2007 of Won 89.4 billion.
    Powercomm 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.
    SK C&C.  We currently own a 30.0% equity
    interest in SK C&C, with a book value as of
    December 31, 2007 of Won 1,037.6 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 SK C&C in the initial public offering of SK
    C&Cs common shares on the Korea Exchange, expected to
    be completed in July 2008. We can provide no assurance, however,
    that the initial public offering will be consummated on a timely
    basis or at all.    Competition
               42




---



##### 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.         43




---



##### 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 reorganization, 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.
    Restrictions on investments by subsidiaries and
    sub-subsidiaries
    of holding companies.The Fair Trade Act
    prohibits subsidiaries or
    sub-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 (or
    sub-subsidiaries).
    Therefore, we and other subsidiaries (or 44




---



##### Table of Contents



sub-subsidiaries)
    of 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 sub-subsidiary) or another
    subsidiary (or sub-subsidiary) of SK Holdings invests in its own
    subsidiary (or sub-subsidiary).  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,
    providedthat 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.    Rate Regulation.
 45




---



##### Table of Contents



Interconnection.
  Frequency Allocation.
    Mandatory
    Contributions and Obligations
  Contributions to the Fund for Development of Information
    Telecommunications.
 46




---



##### Table of Contents



Universal Service Obligation.
    Contribution to 114 Directory
    Service.
  Foreign
    Ownership and Investment Restrictions and
    Requirements
     47




---



##### 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.   48




---



##### Table of Contents



Patents
    and Licensed Technology
    sub-license
    Organizational
    Structure
    Significant
    Subsidiaries
    Item 4.C.
    Organizational
    Structure   49




---



##### Table of Contents



Item 4.D.
    Property,
    Plants And Equipment    Location

Primary Use

Approximate Area in 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


245,811Daegu

Regional Headquarters


153,578Others


317,440Cholla and Jeju Provinces

Regional Headquarters


265,595Others


359,784Choongchung Province

Regional Headquarters


565,421Others


481,978         Item 4A.
    UNRESOLVED
    STAFF COMMENTS    Item 5.
    OPERATING
    AND FINANCIAL REVIEW AND PROSPECTS   50




---



##### Table of Contents



Item 5.A.
    Operating
    Results  Overview
  Revenue
      Market Share Limitations.
  Number Portability and Common Prefix Identification
    System.
    Handset Subsidies.
 51




---



##### Table of Contents



Changes in Tariffs and Interconnection
    Fees.
    Average Monthly Outgoing Voice Minutes and Revenue per
    Subscriber.
  Year Ended December 31,2005


2006


2007Outgoing voice minutes (in
    thousands)(1)


45,243,761



47,980,107



51,295,166Average monthly outgoing voice minutes per
    subscriber(2)


197



201



201Average monthly revenue per subscriber, excluding
    interconnection
    revenue(3)

W
40,205


W
40,220


W
40,154Average monthly revenue per subscriber, including
    interconnection
    revenue(4)

W
44,167


W
44,599


W
44,416     (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 weighted
    average number of subscribers for the period, then dividing that
    number by the number of months in the period. The monthly
    weighted 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
    weighted 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 weighted
    average number of subscribers for the period, then dividing that
    number by the number of months in the period.     52




---



##### Table of Contents



Operating Expenses and Operating Margins.
  Reclassification
    of Prior Year Financial Statements
    Operating
    Results
    For the Year Ended December 31,2005


2006


2007(In billions of Won, except percentage data)Operating Revenue

W
10,721
.8



100
.00
%

W
11,028
.0



100
.0
%

W
12,018
.2



100
.00
%Operating Expenses


8,051
.2



75
.09



8,406
.9



76
.23



10,207
.8



84
.94Operating Income


2,670
.6



24
.91



2,621
.1



23
.77



1,810
.4



15
.06Other Income


392
.6



3
.66



284
.9



2
.58



867
.2



7
.22Other Expenses


501
.6



4
.68



884
.4



8
.02



692
.4



5
.76Income Before Income Taxes and Minority Interest


2,561
.6



23
.89



2,021
.6



18
.33



1,985
.3



16
.52Income Taxes


693
.3



6
.47



572
.0



5
.19



686
.2



5
.71Preacquisition Net Loss of Subsidiaries






















263
.1



2
.2Net Income Attributable to:Majority Interest


1,873
.0



17
.47



1,451
.5



13
.16



1,648
.9



13
.72Minority Interests


(4
.7
)


(0
.04
)


(1
.9
)


(0
.02
)


(86
.6
)


(0
.72
)Net Income

W
1,868
.3



17
.43
%

W
1,449
.6



13
.14


W
1,562
.3



13
.00Depreciation and
    Amortization(1)

W
1,546
.3



14
.42
%

W
1,553
.6



14
.09
%

W
1,851
.8



15
.41
%     (1)
    
    Excludes the depreciation and
    amortization allocated to internal research and development
    costs and manufacturing costs of Won 126.9 billion, Won
    144.8 billion and Won 148.9 billion for the years
    ended December 31, 2005, 2006 and 2007, respectively. 53




---



##### Table of Contents



Year Ended December 31,2005


2006


2007Percentage





Percentage





Percentageof Total





of Total





of TotalRevenue


Revenue


Revenue


Revenue


Revenue


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

W
9,168
.7



85
.5
%

W
9,482
.2



86
.0
%

W
10,123
.3



84
.2
%Interconnection


898
.6



8
.4



1,033
.4



9
.4



1,062
.2



8
.8Digital Handset
    Sales(2)


294
.6



2
.7








0
.0



51
.7



0
.5Total Cellular Revenue


10,361
.9



96
.6



10,515
.6



95
.4



11,237
.2



93
.5Other Revenue:International Calling
    Service(3)


138
.7



1
.3



176
.4



1
.6



211
.8



1
.8Portal
    Service(4)


126
.9



1
.2



165
.6



1
.5



178
.7



1
.5Miscellaneous(5)


94
.3



0
.9



170
.4



1
.5



390
.5



3
.2Total Other Revenue


359
.9



3
.4



512
.4



4
.6



781
.0



6
.5Total Operating Revenue

W
10,721
.8



100
.0
%

W
11,028
.0



100
.0
%

W
12,018
.2



100
.0
%Total Operating Revenue Growth


1
.4
%







2
.9
%







9
.0
%     (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)
    
    Until July 2005, we consolidated
    revenues derived from sales of digital handsets made through our
    former subsidiary, SK Teletech. In July 2005, we sold
    4,542,000 shares of SK Teletech owned by us to
    Pantech & Curitel, Inc., a Korean mobile handset
    manufacturer, reducing our equity interest in SK Teletech from
    89.1% to 29.1%, which became a 22.7% equity interest in Pantech
    following the merger of SK Teletech (renamed SKY Teletech
    following our sale of the company to Pantech &
    Curitel) into Pantech in December 2005. Following the exclusion
    of SK Teletech from consolidation, we did not derive revenues
    from digital handset sales until the inclusion of HELIO as our
    consolidated subsidiary, as of November 1, 2007.(3)
    
    Provided by SK Telink Co. See
    Item 4.B. Business Overview  Our
    Services  Other Products and Services 
    International Calling Services.(4)
    
    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).(5)
    
    Miscellaneous revenue attributable
    to our subsidiaries (including neotam.com, an online outlet
    shopping mall; Morning365.com, an online bookstore; cherrya.com,
    an online cosmetics store; and TU Media).  2007
    Compared to 2006
  Operating Revenue.
   54




---



##### Table of Contents



mobile-to-mobile
        Operating Expenses.
          Operating Income.
 55




---



##### Table of Contents



Other Income. available-for-sale available-for-sale
  Other Expenses.
  Income Tax.
  Net Income.
  2006
    Compared to 2005
  Operating Revenue.
   56




---



##### Table of Contents



mobile-to-mobile
  www.NATE.com
    Operating Expenses.
        Operating Income.
  Other Income.
 57




---



##### Table of Contents



Other Expenses.
  Income Tax.
  Net Income.
  Item 5.B.
    Liquidity
    and Capital Resources  Capital
    Resources
  Liquidity
     58




---



##### Table of Contents



Year Ended December 31,


Change2005


2006


2007


2005 to 2006

2006 to 2007(In billions of Won, except percentages)Net Cash Flow from Operating Activities

W
3,407
.1


W
3,589
.8


W
3,710
.7


W
182
.7



5
.4%

W
120
.9



3
.4%Net Cash Used in Investing Activities


(1,938
.2
)


(2,535
.1
)


(2,399
.0
)


(596
.9
)


(30
.8)


136
.1



5
.4Net Cash Used in Financing Activities


(1,429
.0
)


(952
.4
)


(856
.0
)


476
.6



33
.4


96
.4



10
.1Effect of Exchange Rate Changes on Cash and Cash Equivalents
    Held in Foreign Currencies


(3
.0
)


(9
.3
)


2
.8



(6
.3
)


210
.0


12
.1



130
.1Net Cash Flow due to Changes in Consolidated Subsidiaries


(29
.1
)


14
.6



154
.2



43
.7



150
.1


139
.6



956
.2Preacquisition Cash Flows of
    Subsidiaries(1)

W




W




W
(263
.1
)







N/A


W
(263
.1
)


N/A
*Net Increase in Cash and Cash Equivalents due to
    Merger(2)












50
.4








N/A



50
.4



N/A
**Net Increase (Decrease) in Cash and Cash Equivalents

W
7
.8


W
107
.6


W
400
.0


W
99
.8



1,279
.5

W
292
.4



271
.7Cash and Cash Equivalents at Beginning of Period


370
.6



378
.4



486
.0



7
.8



2
.1


107
.6



28
.4Cash and Cash Equivalents at End of Period

W
378
.4


W
486
.0


W
886
.0


W
107
.6



28
.4%

W
400
.0



82
.3%     N/A = Not applicable.
  *
    
    Pre-acquisition cash flows of
    subsidiaries was Won (263.1) billion in 2007 compared to
    none in 2006.**
    
    Net increase in cash and cash
    equivalents due to merger was Won 50.4 billion in 2007
    compared to none in 2006.(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.  Net Cash Flow from Operating Activities.
  Net Cash from Investing Activities.
 59




---



##### Table of Contents



Net Cash from Financing Activities.
         60




---



##### Table of Contents



91-day
            Capital
    Requirements
   61




---



##### Table of Contents



Capital Expenditures.
  Year Ended December 31,2005


2006


2007(In billions of Won)CDMA
    Networks(1)

W
376


W
280


W
198WCDMA Network


575



781



1,044WiBro(2)






53



154Others(3)


466



384



420Total(4)

W
1,417


W
1,498


W
1,816     (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.       62




---



##### Table of Contents



Repayment of Outstanding Debt.
  Year Ending December 31,

Total(In billions of Won)2008

W
526.42009


630.92010


435.2After 2010


1,654.8     Investments in Convergence Businesses and Global Expansion
    and Other Needs.
          Acquisition of Treasury Shares.
 63




---



##### Table of Contents



Severance Payments.
      Dividends.
   64




---



##### Table of Contents



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
2,920
.1

W
523
.3

W
835
.9

W
585
.6

W
975
.3Interest


797
.3


109
.2


162
.7


117
.8


407
.6Long-term borrowingsPrincipal


324
.3


0
.9


229
.5


0
.1


93
.8Interest


61
.2


19
.2


28
.1


9
.3


4
.6Capital lease obligations


2
.9


2
.2


0
.7






Operating leases


28
.8


7
.7


11
.6


3
.8


5
.7Purchase obligations


















Facility deposits


14
.0


7
.6










6
.4Derivatives


123
.4


12
.6


23
.1


85
.2


2
.5Other long-term
    payables(2)Principal


560
.0


110
.0


280
.0


170
.0


Interest


68
.4


25
.5


35
.1


7
.8


Total contractual cash
    obligations(3)

W
4,900
.4

W
818
.2

W
1,606
.7

W
979
.6

W
1,495
.9     (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(k) and note 8 of the notes to our
    consolidated financial statements.(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
     65




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##### Table of Contents



New
    Accounting Pronouncements under U.S. GAAP
  No. 06-3, No. 06-3). No. 06-3 No. 06-3 No. 06-3
      No. 157-1,
 66




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##### Table of Contents



(FSP 157-1) No. 157-2, (FSP 157-2), FSP 157-1 FSP 157-2
        14-1, 14-1). 14-1 14-1 14-1 14-1
  Significant
    Changes in Korean GAAP
    
    Through 2004, when our equity interests in the equity method
    investees were diluted as a result of the equity method
    investees direct sales of their unissued shares to third
    parties, the changes in the our proportionate 67




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##### Table of Contents



equity of investees were accounted for as capital transactions.
    Effective January 1, 2005, such transactions are accounted
    for as income statement treatment, pursuant to adoption of SKAS
    No. 15, Investments: Equity Method. As a result
    of adopting SKAS No. 15, net income for the year ended
    December 31, 2005 increased by Won 6.3 billion (net of
    tax effect of Won 2.4 billion).  
    Through 2004, tax effects of temporary differences related to
    capital surplus or capital adjustments were excluded in
    determining the deferred tax assets or liabilities. Effective
    January 1, 2005, such tax effects of temporary differences
    are included in determining the deferred tax assets or
    liabilities, pursuant to adoption of SKAS No. 16
    Income Taxes. Accordingly, adjustments made directly
    to capital surplus or capital adjustments, which result in
    temporary differences, are recorded net of related tax effects.
    In addition, effective January 1, 2005, deferred income tax
    assets and liabilities which were presented on the balance sheet
    as a single non-current net number through 2004, are separated
    into current and non-current portions. As a result of adopting
    SKAS No. 16, total assets and total liabilities as of
    December 31, 2005 increased by Won 67.6 billion and
    Won 97.8 billion, respectively, and total
    stockholders equity as of December 31, 2005 decreased
    by Won 30.2 billion, which was directly reflected in
    capital surplus or capital adjustments. See note 18 of the
    notes to our consolidated financial statements.
    Through 2004, provisions were recorded at nominal value.
    Effective January 1, 2005, provisions are recorded at the
    present value when the effect of the time value of money is
    material, pursuant to adoption of SKAS No. 17
    Provisions, Contingent Liabilities and Contingent
    Assets. SKAS No. 17 is prospectively applied and as a
    result of adopting such accounting standard, total liabilities
    as of December 31, 2005 decreased by Won 7.4 billion
    and ordinary income and net income for the year ended
    December 31, 2005 increased by Won 5.4 billion. See
    note 25 of the notes to our consolidated financial
    statements.        
    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 sheets as of
    December 31, 2005 and 2006, which appear in the
    consolidated financial statements included elsewhere in this
    report, have 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 statements of income for the years ended
    December 31, 2005 and 2006, which appear in the
    consolidated financial statements included elsewhere in this
    report, have 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. 68




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##### Table of Contents



Critical
    Accounting Policies, Estimates And Judgments
    Allowances
    for Doubtful Accounts
    Estimated
    Useful Lives
    Impairment
    of Long-lived Assets Including the WCDMA Frequency Usage
    Right
      Impairment
    of Investment Securities
  available-for-sale held-to-maturity
 69




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##### Table of Contents



Employee
    Stock Option Compensation Plan
    Income
    Taxes
      Off-Balance
    Sheet Arrangements
     70




---



##### Table of Contents



Item 5.C.
    Research
    and Development      As of and for the Year Ended December 31,2005

2006

2007(In billions of Won)Internal R&D Expenses

W
252
.0

W
212
.0

W
218
.7External R&D Expenses


69
.1


67
.0


74
.4Total R&D Expenses

W
321
.1

W
279
.0

W
293
.1       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 71




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##### Table of Contents



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
    Item 5.D.
    Trend
    Information    Item 5.E.
    Off-Balance
    Sheet Arrangements    Item 5.F.
    Tabular
    Disclosure of Contractual Obligations    Item 6.
    DIRECTORS,
    SENIOR MANAGEMENT AND EMPLOYEES  Item 6.A.
    Directors
    and Senior Management       72




---



##### Table of Contents



100-999,
    Other PrincipalDate of

Director

Expiration



DirectorshipsName

Birth

Since

of Term

Position

and Positions

Business ExperienceShin Bae Kim

Oct. 15, 1954

2002

2011

President, Chief Executive Officer, Chief Officer &
    Representative Director

Chairman, Korea Association of RFID/USN

Senior Vice President and Head of Strategic Planning Group (SK
    Telecom); Director, KORMSSung 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 ExperienceYoung Ho Park*

Jul. 31, 1947

2008

2011

President & Chief Executive Officer of SK Holdings



President, Executive Vice President, Corporate Management
    Office, SK Corporation, Senior Vice President, Marketing Support
    Division, SK CorporationHyun Chin Lim

Apr. 26, 1949

2006

2009

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) 73




---



##### Table of Contents



Other PrincipalDate of

Director

Expiration



DirectorshipsName

Birth

Since

of Term

Position

and Positions

Business ExperienceRak 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     *
    
    Mr. Young Ho Park is a
    non-standing director but not an independent director.  Involvement
    In Certain Legal Proceedings
    Item 6.B.
    Compensation       74




---



##### Table of Contents



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.      Independent
    Non-executive Director Nomination Committee
    Capex
    Review Committee
   75




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##### Table of Contents



Compensation
    Committee
    Corporate
    Citizenship Committee
    Differences
    in Corporate Governance Practices
    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 association, 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. 76




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##### Table of Contents



NYSE Corporate Governance Standards

Our Corporate Governance PracticeCorporate 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.   Item 6.D.
    Employees    Regular

TemporaryEmployees

Employees

TotalDecember 31, 2005


5,727



919



6,646December 31, 2006


6,178



1,498



7,676December 31, 2007


7,524



1,961



9,485     Marketing


Production


Research


Support


New Business


TotalRegular Employees


2,105



2,842



470



1,225



882



7,524Temporary Employees


888



662



24



279



108



1,961Total


2,993



3,504



494



1,504



990



9,485   Labor
    Relations
    Employee
    Stock Ownership Association and Other Benefits
   77




---



##### Table of Contents



on-site
 78




---



##### Table of Contents



Item 6.E.
    Share
    Ownership    PercentageNumber of

of Total

SpecialShares

Shares

VotingName

Position

Owned

Outstanding

Rights

OptionsStanding Directors:Shin Bae Kim

President, Chief Executive Officer and Representative Director


1,270



0


None

NoneSung Min Ha

Head of Mobile Network Operations Business


738



0


None

NoneNon-Standing Directors:Hyun 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
    Group(1)


18,748,452



23
.09
%


25
.83
%POSCO


2,341,569



2
.88



3
.23Employees(2)


311,259



0
.38



0
.43Treasury
    shares(2)(3)


8,609,034



10
.60



N/AOfficers and Directors


2,758



0
*



0
*Other Domestic Shareholders


14,012,339



17
.27



19
.30Foreign Shareholders


37,168,300



45
.78



51
.21Total Issued Shares


81,193,711



100
.00
%


100
.00
%     *
    
    Less than 0.00%.(1)
    
    The SK Groups ownership
    interest consists of the following as of December 31, 2007:  79




---



##### Table of Contents



Percentage


PercentageNumber of


Total Shares


Total SharesSK Group
    Member(a)

Shares


Issued


OutstandingSK
    Holdings(b)


17,663,127



21
.75
%


24
.33
%SK
    Networks(b)


1,085,325



1
.34



1
.5018,748,452



23
.09
%


25
.83
%   (a)
    
    The SK Group is a group of
    affiliated entities. As of December 31, 2007, the ownership
    interests among the SK Group included, among others:  
    
    SK Holdings owned: 21.75% of SK
    Telecom, 31.18% of SK Energy, 40.47% of SK Networks, 42.50% of
    SKC and 72.13% of SK Shipping Co., Ltd.
    
    SK Networks owned 1.34% of SK
    Telecom, 17.71% of SK Shipping, 0.02% of SK
    Engineering & Construction Co., Ltd., and 22.71% of SK
    Securities Co., Ltd.
    
    SK Chemicals owned 58.03% of SK
    Engineering and Construction.
    
    SKC owned 10.06% of SK Shipping and
    12.41% of SK Securities.
    
    SK C&C owned 25.42% of SK
    Holdings.
    
    We owned 30.00% of SK C&C.  (b)
    
    On February 25, 2008, SK
    Holdings purchased 1,085,325 of our common shares from SK
    Networks, increasing SK Holdings equity interest in us to
    23.09% and decreasing SK Networks equity interest in us to
    zero.  (2)
    
    Represents shares owned by our
    employee stock ownership association. See Item 6.D.
    Employees. In January 2008, we sold an additional 208,326
    of our treasury shares to our employee stock ownership
    association, increasing the number of shares held by the
    employee stock ownership association to 519,585 and reducing the
    number of shares held by us in treasury to 8,400,708.(3)
    
    Treasury shares do not have any
    voting rights; includes 1,277,164 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

2005


2006


2007(As a percentage oftotal issued
    shares)(1)SK Group


22
.79
%


23
.09
%


23
.09
%SK
    Holdings(2)


21
.47



21
.75



21
.75SK
    Networks(2)


1
.32



1
.34



1
.34POSCO(3)


3
.64



2
.88



2
.88     (1)
    
    Includes 8,662,415, 8,526,252 and
    8,609,034 shares held in treasury as of December 31,
    2005, 2006 and 2007, respectively.(2)
    
    On February 25, 2008, SK
    Holdings purchased 1,085,325 of our common shares from SK
    Networks, increasing SK Holdings equity interest in us to
    23.09% and decreasing SK Networks equity interest in us to
    zero.(3)
    
    POSCO acquired these shares in
    connection with our acquisition of a 27.7% equity interest in
    Shinsegi.       80




---



##### 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
   81




---



##### Table of Contents



Other
    Related Parties
                   82




---



##### Table of Contents



Item 7.C.
    Interests
    of Experts and Counsel  Not applicable.
 83




---



##### Table of Contents



Item 8.
    FINANCIAL
    INFORMATION  Item 8.A.
    Consolidated
    Statements and Other Financial Information    Legal
    Proceedings
  FTC
    Proceedings
      MIC
    and KCC Proceedings
         84




---



##### Table of Contents



Multinet
    Litigation
     85




---



##### Table of Contents



Hanarotelecom
    Litigation
      Dividends
        Number ofSharesTotal Amount of


Entitled toYear Ended December 31,

Dividend per Share


Dividends


Dividend(In Won)


(In billions of Won)2003

W
5,500


W
404.9



73,614,3082004


10,300



758.2



73,614,2962005


9,000



662.5



73,614,2962006


8,000



582.4



72,667,4592007


9,400



682.4



72,584,677      86




---



##### 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.
 87




---



##### Table of Contents



Item 9.C.
    Markets      Shares of
    Common Stock
    Average DailyTrading Volume(Number ofCalendar Year

High(1)


Low(1)


Close


Shares)(Won per share)2003


235,000



142,000



199,000



327,689First Quarter


235,000



142,000



153,000



497,115Second Quarter


210,000



157,500



204,000



298,346Third Quarter


216,000



183,000



184,000



267,821Fourth Quarter


212,500



185,000



199,000



247,3322004


238,500



154,500



197,000



179,712First Quarter


238,500



207,500



214,500



243,681Second 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



187,053First Quarter


200,500



171,000



171,000



203,869Second 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



244,792First Quarter


223,000



190,500



191,500



204,343Second Quarter


215,000



188,500



213,000



223,604Third Quarter


221,000



192,000



210,000



206,051Fourth Quarter


274,000



204,500



249,000



343,354 88




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##### Table of Contents



Average DailyTrading Volume(Number ofCalendar Year

High(1)


Low(1)


Close


Shares)(Won per share)2008 (through June 27)


232,000



178,500



191,000



295,204First Quarter


232,000



178,500



186,500



328,984January


232,000



202,000



213,000



313,864February


208,000



189,000



192,500



416,408March


189,000



178,500



186,500



269,289Second Quarter (through June 27)


212,000



180,000



191,000



266,310April


203,000



182,000



203,000



335,664May


212,000



201,500



203,500



206,251June (through June 27)


201,500



180,000



191,000



242,817     Source: KRX
  (1)
    
    Both high and low prices are based
    on the daily closing prices for the period.  American
    Depositary Shares
    Prices(1)Average DailyTrading Volume(Number ofCalendar Year

High(1)

Low(1)

Close

Shares)(US$ per ADS)

(Number of ADSs)2003


21
.85


12
.83


18
.65


743,316First Quarter


21
.85


12
.83


13
.62


971,259Second Quarter


19
.40


14
.07


18
.86


723,959Third Quarter


20
.83


17
.71


17
.84


724,406Fourth Quarter


19
.90


17
.46


18
.65


564,0232004


25
.01


17
.28


22
.25


911,823First Quarter


25
.01


19
.43


21
.30


1,331,177Second Quarter


21
.83


19
.15


20
.99


832,175Third 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


680,124 89




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##### Table of Contents



Prices(1)Average DailyTrading Volume(Number ofCalendar Year

High(1)

Low(1)

Close

Shares)(US$ per ADS)

(Number of ADSs)2007


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 (through June 26)


27
.96


19
.90


20
.86


1,556,413First Quarter


27
.96


19
.90


21
.61


1,992,134January


27
.96


23
.63


24
.84


2,163,864February


24
.50


22
.40


22
.40


2,097,431March


22
.17


19
.90


21
.61


1,697,047Second Quarter (through June 26)


23
.47


20
.72


20
.86


1,127,499April


22
.60


21
.47


22
.57


1,327,796May


23
.47


22
.13


22
.72


1,074,084June (through June 26)


22
.24


20
.72


20
.86


923,479     Source: New York Stock Exchange
  (1)
    
    Both high and low prices are based
    on the daily closing prices for the period.  The
    Korean Securities Market
  The
    Korea Exchange Inc.
  sub-organization
       90




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##### 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
.1


12
.92001


520
.95


704
.50


468
.76


693
.70


1
.7


16
.42002


724
.95


937
.61


584
.04


829
.44


1
.6


15
.22003


635
.17


822
.16


515
.24


810
.71


2
.0


11
.82004


821
.26


936
.06


719
.59


895
.92


2
.0


13
.82005


893
.71


1,379
.37


870
.84


1,379
.37


1
.8


10
.62006


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 (through June 26)


1,853
.45


1,888
.88


1,574
.44


1,717
.66


1
.6


14
.7     Source: KRX
  (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. 91




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##### Table of Contents



(3)
    
    Starting in April 2000, dividend
    yield and price earnings ratio of KOSPI 200, an index of 200
    equity securities listed on the KRX Stock Market. Starting in
    April 2000, excludes classified companies, companies that did
    not submit annual reports to the KRX, and companies which
    received disqualified opinion from external auditors.      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      92




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##### Table of Contents



Market Capitalization on theLast Day of Each Period


Average Trading Volume & ValueNumber ofListed


(Millions


(Thousands of


Thousands of


(Millions


(Thousands ofYear

Companies


of Won)


Dollars)(1)


Shares


of Won)


Dollars)(1)1980


352


W
2,526,553


US$
3,828,691



5,654


W
3,897


US$
5,9051981


343



2,959,057



4,224,207



10,565



8,708



12,4331982


334



3,000,494



4,407,711



9,704



6,667



8,9041983


328



3,489,654



4,386,743



9,325



5,941



7,4681984


336



5,148,460



6,222,456



14,847



10,642



12,8621985


342



6,570,404



7,380,818



18,925



12,315



13,8341986


355



11,994,233



13,924,115



31,755



32,870



38,1591987


389



26,172,174



33,033,162



20,353



70,185



88,5841988


502



64,543,685



94,348,318



10,367



198,364



289,9631989


626



95,476,774



140,489,660



11,757



280,967



414,4311990


669



79,019,676



110,301,055



10,866



183,692



256,5001991


686



73,117,833



96,182,364



14,022



214,263



281,8501992


688



84,711,982



107,502,515



24,028



308,246



391,1751993


693



112,665,260



139,419,948



35,130



574,048



676,9541994


699



151,217,231



191,729,721



36,862



776,257



984,2231995


721



141,151,399



182,201,367



26,130



487,762



629,6141996


760



117,369,988



139,031,021



26,571



486,834



575,7331997


776



70,988,897



50,161,742



41,525



555,759



392,7071998


748



137,798,451



114,090,455



97,716



660,429



471,4321999


725



349,503,966



305,137,040



278,551



3,481,620



3,039,6542000


704



188,041,490



150,162,898



306,163



2,602,211



2,078,0282001


689



225,850,076



194,784,979



473,241



1,997,420



1,520,6852002


683



258,680,756



218,167,122



851,242



3,041,592



2,414,3622003


684



355,362,626



297,960,530



542,010



2,216,636



1,858,5802004


683



412,588,138



427,069,982



372,894



2,232,108



2,310,4552005


702



655,074,595



648,588,707



467,629



3,157,662



3,126,3982006


731



704,587,508



757,620,976



279,096



3,435,180



3,693,7422007


745



951,900,447



1,017,205,009



363,741



5,539,653



5,919,6982008 (through June 26)


756



872,201,691



837,608,462



302,433



5,258,073



5,049,528     Source: KRX
  (1)
    
    Converted at the noon buying rate
    in The City of New York for cable transfers in Won per US$1.00
    as certified for customs purposes by the Federal Reserve Bank of
    New York.   93




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##### Table of Contents



Further
    Opening of the Korean Securities Market
            Protection
    of Customers Interest in Case of Insolvency of Securities
    Companies
           94




---



##### 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 Association  Description
    of Capital Stock
    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;
    manufacture and distribution business relating to the first four
    items above;
    tourism 95




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##### Table of Contents




    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
     96




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##### Table of Contents



Distribution
    of Free Shares
    Preemptive
    Rights and Issuance of Additional Shares
     97




---



##### 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
     98




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##### Table of Contents




    amending our articles of association;
    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.          Rights
    of Dissenting Shareholders
  20-day
 99




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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
    Acquisition
    of Shares by Us
   100




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##### Table of Contents



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
   101




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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; 102




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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
         103




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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; 104




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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
    association, 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
       105




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##### Table of Contents



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; 106




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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,
     107




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##### Table of Contents



Governing
    Law
        Information
    Relating to the ADR Depositary
      Form 10-K Forms 10-Q. Form 10-K Forms 10-Q
    Item 10.C.
    Material
    Contracts    Item 10.D.
    Exchange
    Controls  Korean
    Foreign Exchange Controls and Securities Regulations
  General
   108




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##### Table of Contents




    if the Government deems it necessary on account of war, armed
    conflict, natural disaster or grave and sudden and significant
    changes in domestic or foreign economic circumstances or similar
    events or circumstances, the 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 offerings of ADSs
    and stock dividends or other distributions related to the ADSs).
    We can give no assurance that we would grant our consent, if our
    consent is required. 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
    Association  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.
    In addition, we are also required to notify the MOSF upon
    receipt of full proceeds from the offering of ADSs. No
    additional Korean governmental approval is necessary for the
    offering and issuance of ADSs.  Reporting
    Requirements for Holders of Substantial Interests
   109




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##### Table of Contents



his/her
    Restrictions
    Applicable to ADSs
        Restrictions
    Applicable to Shares
    
    odd-lot trading of shares; 110




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##### Table of Contents




    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
    Stock 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
   111




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##### Table of Contents



112




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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.    Dividends
   113




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##### Table of Contents



Sale
    or Other Disposition
    Foreign
    Tax Credit Considerations
  16-day
        U.S.
    Information Reporting and Backup Withholding Rules
  U.S.-related
 114




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##### Table of Contents



non-U.S. status U.S.-related
  Korean
    Taxation
    
    a resident of Korea;
    a corporation organized under Korean law; or
    engaged in a trade or business in Korea through a permanent
    establishment or a fixed base to which the relevant income is
    attributable or with which the relevant income is effectively
    connected.  Dividends
    on the Shares or ADSs
  provided that
      Taxation
    of Capital Gains
   115




---



##### Table of Contents



Korea-United
    Inheritance
    Tax And Gift Tax
      Securities
    Transaction Tax
     116




---



##### 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
  floating-to-fixed floating-to-fixed
 117




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##### Table of Contents



fixed-to-fixed
      Exchange
    Rate Risk
    Interest
    Rate Risk
    Maturities2008


2009


2010


2011


2012


Thereafter


Total

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

W
541
.8


W
360
.6


W
203
.5


W
192
.8


W




W
575
.7


W
1,874
.4

W
1,822
.9Average weighted
    rate(1)


5
.62
%


5
.30
%


4
.15
%


3
.12
%


0
.00
%


4
.86
%Variable rate


3
.7



0
.3



200
.1


















204
.1


204
.1Average weighted
    rate(1)


6
.70
%


3
.72
%


5
.82
%


0
.00
%


0
.00
%


0
.00
%Sub-total


545
.5



360
.9



403
.6



192
.8








575
.7



2,078
.5


2,027
.0Foreign currency:Fixed rate


1
.6



265
.2



28
.3



279
.7








368
.4



943
.2


981
.2Average weighted
    rate(1)


3
.18
%


0
.00
%


9
.97
%


4
.28
%


0
.00
%


6
.75
%Variable rate


0
.9


















103
.7



93
.8



198
.4


198
.4Average weighted
    rate(1)


6
.86
%


0
.00
%


0
.00
%


0
.00
%


1
.45
%


4
.94
%Sub-total


2
.5



265
.2



28
.3



279
.7



103
.7



462
.2



1,141
.6


1,179
.6Total

W
548
.0


W
626
.1


W
431
.9


W
472
.5


W
103
.7


W
1,037
.9


W
3,220
.1

W
3,206
.6     (1)
    
    Weighted average rates of the
    portfolio at the period end.    Item 12.
    DESCRIPTION
    OF SECURITIES OTHER THAN EQUITY SECURITIES  Not applicable.
 118




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##### Table of Contents



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) 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
   119




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##### Table of Contents



Item 16.
    RESERVED  Item 16A.
    AUDIT
    COMMITTEE FINANCIAL EXPERT    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 31,2006

2007(In millions of Won)Audit

W
1,220
.5

W
1,401
.3Audit Related

W
81
.1

W
61
.3Tax

W
277
.0

W
70
.8All Other Fees

W



W
Total

W
1,578
.6

W
1,533
.4   Audit Fees
  Audit-Related Fees
  Tax Fees
    Pre-Approval
    of Audit and Non-Audit Services Provided by Independent
    Registered Public Accounting Firm
   120




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##### Table of Contents



de minimis Rule 2-01 Regulation S-X
  Item 16D.
    EXEMPTIONS
    FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES  Not applicable.
  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 per


Announced Plans


the Plans orPeriod 2007

Shares Purchased


Share


or Program


ProgramJanuary





W








February





W








March





W








April





W








May





W








June





W








July





W








August





W








September





W








October





W








November


248,600


W
242,621







December


222,400


W
261,673







Total


471,000


W
251,617







        121




---



##### Table of Contents



122




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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, 2005, 2006
    and 2007


F-4Consolidated statements of income for the years ended
    December 31, 2005, 2006 and 2007


F-6Consolidated statements of stockholders equity for the
    years ended December 31, 2005, 2006 and 2007


F-7Consolidated statements of cash flows for the years ended
    December 31, 2005, 2006 and 2007


F-9Notes to consolidated financial statements for the years ended
    December 31, 2005, 2006 and 2007


F-11   Item 19.
    EXHIBITS  Number

Description1
.1*

Memorandum and Articles of Association2
.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. 123




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##### Table of Contents



SIGNATURES
  Form 20-F
  SK TELECOM CO., LTD. (Registrant)
  /s/  Shin
    Bae Kim   Title:
    President, Chief Executive Officer & 
    Representative Director   124




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##### Table of Contents



SK
    TELECOM CO., LTD.
  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, 2005, 2006
    and 2007


F-4Consolidated statements of income for the years ended
    December 31, 2005, 2006 and 2007


F-6Consolidated statements of stockholders equity for the
    years ended December 31, 2005, 2006 and 2007


F-7Consolidated statements of cash flows for the years ended
    December 31, 2005, 2006 and 2007


F-9Notes to consolidated financial statements for the years ended
    December 31, 2005, 2006 and 2007


F-11  F-1




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    ON CONSOLIDATED FINANCIAL STATEMENTS
           Preparation and
    Presentation of Financial Statements Consolidation Financial Statements
      Internal Control  Integrated Framework
    
 F-2




---



##### Table of Contents



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




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##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS
 DECEMBER
    31, 2005, 2006 AND 2007
  2005


2006


2007


2007In millions of Korean won


In thousandsof U.S. dollars(Note 2 a)ASSETSCURRENT ASSETS:Cash and cash equivalents (Notes 2, 13 and 30)

W
378,426


W
485,972


W
885,847


$
946,620Short-term financial instruments (Notes 22 and 23)


106,592



98,085



148,103



158,264Trading securities (Notes 2 and 4)


777,472



665,312



635,434



679,028Current portion of long-term investment securities (Notes 2
    and 4)


1



335



101,209



108,152Accounts receivable  trade, net of allowance for
    doubtful accounts of W133,499 million,
    W106,737 million and
    W93,551 million at December 31, 2005,
    2006 and 2007, respectively (Notes 2,13 and 25)


1,684,119



1,800,606



1,774,935



1,896,703Short-term loans, net of allowance for doubtful accounts of
    W1,350 million,
    W9,629 million and
    W6,845 million at December 31, 2005,
    2006 and 2007, respectively (Notes 2, 6 and 13)


65,539



69,745



84,570



90,372Accounts receivable  other, net of allowance for
    doubtful accounts of W17,526 million,
    W31,233 million and
    W28,649 million at December 31, 2005,
    2006 and 2007, respectively (Notes 2, 13 and 25)


1,369,691



1,305,284



948,322



1,013,381Inventories, net (Notes 2, 3 and 24)


7,784



19,778



47,052



50,280Prepaid expenses


104,124



116,727



108,552



115,999Current deferred income tax assets (Notes 2 and 18)


66,117



49,940



36,383



38,879Currency swap (Notes 2 and 28)






16,660







Accrued income and other


38,715



35,518



42,665



45,592Total Current Assets


4,598,580



4,663,962



4,813,072



5,143,270NON-CURRENT ASSETS:Property and equipment, net (Notes 2, 7, 12, 23, 24
    and 25)


4,663,369



4,507,335



4,969,354



5,310,274Intangible assets, net (Notes 2, 8, 12 and 29)


3,452,889



3,518,411



3,433,962



3,669,547Long-term investment securities (Notes 2 and 4)


1,220,208



2,475,418



5,058,519



5,405,556Equity securities accounted for using the equity method
    (Notes 2 and 5)


471,879



750,921



350,966



375,044Long-term bank deposits (Note 22)


1,479



10,445



15,535



16,601Long-term loans, net of allowance for doubtful accounts of
    W19,130 million,
    W19,117 million and
    W23,079 million at December 31, 2005,
    2006 and 2007, respectively (Notes 2 and 6)


18,430



18,569



84,906



90,731Guarantee deposits (Notes 13 and 25)


168,559



139,619



148,987



159,208Long-term currency swap (Notes 2 and 28)










13,057



13,953Long-term interest rate swap (Notes 2 and 28)










3,170



3,387Non-current deferred income tax assets (Notes 2 and 18)


1,495



2,655



7,286



7,786Other


107,884



152,633



150,121



160,419Total Non-current Assets


10,106,192



11,576,006



14,235,863



15,212,506TOTAL ASSETS

W
14,704,772


W
16,239,968


W
19,048,935


$
20,355,776    F-4




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##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS  (Continued)
 DECEMBER 31,
    2005, 2006 AND 2007
  2005


2006


2007


2007In millions of Korean won


In thousandsof U.S. dollars(Note 2 a)LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Accounts payable (Notes 13 and 25)

W
1,047,779


W
1,221,704


W
1,252,734


$
1,338,677Short-term borrowings (Notes 22 and 23)


972



58,344



24,616



26,305Income taxes payable


370,822



336,536



319,108



341,000Accrued expenses (Notes 2 and 27)


364,830



375,063



436,008



465,920Dividend payable (Note 21)


298



268



308



329Withholdings


216,622



339,144



226,407



241,940Current portion of long-term debt, net (Notes 9, 10 and 12)


809,573



797,042



634,990



678,553Current portion of subscription deposits (Note 11)


14,875



17,576



7,564



8,083Current deferred income tax liabilities (Notes 2 and 18)


44







4



4Currency swap (Notes 2 and 28)










12,646



13,514Advanced receipts and other


37,558



62,739



102,489



109,520Total Current Liabilities


2,863,373



3,208,416



3,016,874



3,223,845NON-CURRENT LIABILITIES:Bonds payable, net (Notes 2, 9 and 23)


2,314,208



1,995,323



2,348,661



2,509,789Long-term borrowings (Notes 10 and 23)


155



293,026



323,421



345,609Subscription deposits (Note 11)


23,770



21,140



6,425



6,866Long-term payables  other, net of present value
    discount of W58,413 million,
    W42,461 million and
    W27,886 million at December 31, 2005,
    2006 and 2007, respectively (Note 2)


591,587



517,539



422,114



451,073Obligations under capital leases (Notes 2, 12 and 23)


10,204



1,860



712



761Accrued severance indemnities, net (Note 2)


71,284



22,284



44,322



47,363Non-current deferred income tax liabilities (Notes 2 and 18)


401,156



532,639



1,044,758



1,116,433Long-term currency swap (Notes 2 and 28)


73,450



112,970



110,911



118,520Long-term interest rate swap (Notes 2 and 28)






454







Guarantee deposits received and other (Notes 25 and 27)


28,045



51,229



43,104



46,061Total Non-Current Liabilities


3,513,859



3,548,464



4,344,428



4,642,475Total Liabilities


6,377,232



6,756,880



7,361,302



7,866,320COMMITMENTS AND CONTINGENCIES (Note 23)STOCKHOLDERS EQUITY :Capital stock  W500 par value:


44,639



44,639



44,639



47,701Issued and outstanding  220,000,000 shares
    authorized; 73,614,296 shares, 72,667,459 shares and
    72,584,677 shares at December 31, 2005, 2006 and 2007,
    respectively (Notes 1 and 14)Capital surplus (Notes 2, 14 and 18)


2,954,840



2,950,327



2,924,960



3,125,625Capital adjustments:Treasury stock (Note 16)


(2,047,105
)


(2,014,927
)


(2,041,483
)


(2,181,538
)Loss on disposal of treasury stock (Notes 16 and 18)






(7,887
)


(94
)


(100
)Stock options (Notes 2, 17 and 26)


3,480



3,246







Accumulated other comprehensive income (loss) (Note 19):Unrealized gain (loss) on valuation of long-term investment
    securities, net (Notes 2, 4 and 18)


(42,093
)


429,228



1,624,613



1,736,069Equity in other comprehensive income of affiliates, net
    (Notes 2, 5 and 18)


61,368



107,324



1,727



1,845Loss on valuation of currency swap, net (Notes 2, 18 and 28)


(14,177
)


(16,487
)


(11,816
)


(12,627
)Gain (loss) on valuation of interest rate swap, net
    (Notes 2, 18 and 28)






(329
)


2,298



2,456Foreign-based operations translation adjustment
    (Notes 2 and 18)


(9,988
)


(29,726
)


(25,564
)


(27,318
)Retained earnings (Note 15)


7,267,649



7,847,434



8,914,970



9,526,576Minority interest in equity of consolidated subsidiaries
    (Note 2)


108,927



170,246



253,383



270,767Total Stockholders Equity


8,327,540



9,483,088



11,687,633



12,489,456TOTAL LIABILITIES AND STOCKHOLDERS EQUITY

W
14,704,772


W
16,239,968


W
19,048,935


$
20,355,776    F-5




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##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF INCOME
 YEARS
    ENDED DECEMBER 31, 2005, 2006 AND 2007
  2005


2006


2007


2007In millions of Korean won, except for


In thousands ofIncome per share


U.S. dollars,except forincome per share(Note 2 a)OPERATING REVENUE (Notes 2, 25 and 31)

W
10,721,820


W
11,027,977


W
12,018,163


$
12,842,662OPERATING EXPENSES (Notes 2 and 25)Labor cost


(464,764
)


(491,839
)


(593,792
)


(634,529
)Commissions paid


(2,859,638
)


(3,293,197
)


(4,224,510
)


(4,514,330
)Depreciation and amortization (Notes 7 and 8)


(1,546,285
)


(1,553,635
)


(1,851,832
)


(1,978,876
)Network interconnection (Note 31)


(989,417
)


(1,014,913
)


(1,078,714
)


(1,152,719
)Leased line


(407,043
)


(412,902
)


(410,408
)


(438,564
)Advertising


(279,390
)


(307,190
)


(392,031
)


(418,926
)Research and development (Note 2)


(252,046
)


(211,961
)


(218,653
)


(233,654
)Rent


(190,134
)


(206,708
)


(240,742
)


(257,258
)Frequency usage


(156,098
)


(158,958
)


(166,395
)


(177,810
)Repair


(131,719
)


(150,848
)


(171,262
)


(183,011
)Provision for bad debts


(112,792
)


(61,457
)


(71,439
)


(76,340
)Cost of goods sold


(240,746
)


(121,381
)


(311,678
)


(333,060
)Other


(421,132
)


(421,856
)


(476,295
)


(508,971
)Sub-total


(8,051,204
)


(8,406,845
)


(10,207,751
)


(10,908,048
)OPERATING INCOME


2,670,616



2,621,132



1,810,412



1,934,614OTHER INCOME:Interest income (Note 4)


61,143



79,969



98,301



105,045Dividends


26,515



20,351



21,119



22,568Commissions (Note 25)


32,738



33,226



32,196



34,405Equity in earnings of affiliates (Notes 2 and 5)


20,949



45,787



247,382



264,353Foreign exchange and translation gains (Note 2)


4,167



4,412



12,091



12,920Reversal of allowance for doubtful accounts


450



789



614



656Gain on valuation of trading securities (Notes 2 and 4)


1







128



137Gain on disposal of investment assets (Note 5)


24,613



27,490



3,721



3,976Gain on disposal of consolidated subsidiaries (Note 5)


178,689



1,556







Gain on disposal of property, equipment and intangible assets


4,693



4,507



9,776



10,447Gain on transactions and valuation of currency swap
    (Notes 2 and 28)


2,578



16,660



10,799



11,540Gain on conversion of convertible bonds (Note 4)










373,140



398,739Gain on redemption of bonds payable










6,160



6,583Other


36,016



50,111



51,818



55,373Sub-total


392,552



284,858



867,245



926,742OTHER EXPENSES:Interest and discounts (Note 2)


(253,472
)


(239,138
)


(241,863
)


(258,456
)Donations


(76,185
)


(103,348
)


(72,849
)


(77,847
)Equity in losses of affiliates (Notes 2 and 5)


(71,825
)


(211,464
)


(175,474
)


(187,512
)Foreign exchange and translation losses (Note 2)


(4,178
)


(4,139
)


(12,966
)


(13,856
)Loss on valuation of trading securities (Notes 2 and 4)


(16
)






(1,203
)


(1,286
)Loss on disposal of investment assets (Note 5)


(4,017
)


(6,096
)


(1,190
)


(1,272
)Loss on disposal of property, equipment and intangible assets


(6,523
)


(17,148
)


(30,730
)


(32,838
)Loss on impairment of investment assets (Notes 2 and 4)


(3,422
)


(27,696
)


(15,526
)


(16,591
)Impairment loss on assets (Note 2)


(260
)


(7,030
)


(3,484
)


(3,723
)Loss on transactions and valuation of currency swap
    (Notes 2 and 28)






(9,258
)


(33,876
)


(36,200
)Special severance indemnities (Note 2)






(144,021
)






External research and development costs (Note 2)


(69,140
)


(67,021
)


(74,388
)


(79,491
)Other


(12,564
)


(48,053
)


(28,816
)


(30,792
)Sub-total


(501,602
)


(884,412
)


(692,365
)


(739,864
)INCOME BEFORE INCOME TAXES AND MINORITY INTEREST


2,561,566



2,021,578



1,985,292



2,121,492INCOME TAXES (Notes 2 and 18)


(693,259
)


(572,026
)


(686,161
)


(733,235
)PREACQUISITION NET LOSS OF SUBSIDIARIES (Note 3)










263,134



281,186NET INCOME

W
1,868,307


W
1,449,552


W
1,562,265


$
1,669,443ATTRIBUTABLE TO:Majority interests (Note 20)

W
1,872,978


W
1,451,491


W
1,648,876


$
1,761,996Minority interests


(4,671
)


(1,939
)


(86,611
)


(92,553
)W
1,868,307


W
1,449,552


W
1,562,265


$
1,669,443NET INCOME PER SHARE OF MAJORITY INTERESTS (Notes 2 and 20)
    (In Korean won and U.S. dollars)

W
25,443


W
19,801


W
22,696


$
24.25DILUTED NET INCOME PER SHARE OF MAJORITY INTERESTS (Notes 2
    and 20) (In Korean won and U.S. dollars)

W
25,036


W
19,523


W
22,375


$
23.91    F-6




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY
 YEARS
    ENDED DECEMBER 31, 2005, 2006 AND 2007
  AccumulatedOther








TotalCommon


Capital


Capital


Comprehensive


Retained


Minority


StockholdersStock


Surplus


Adjustments


Income


Earnings


Interest


Equity(In millions of Korean won)Balance, January 1, 2005

W
44,639


W
2,968,301


W
(2,042,272
)

W
(16,020
)

W
6,152,898


W
98,198


W
7,205,744Cash dividends paid (Note 21)


















(684,613
)






(684,613
)Interim cash dividends paid (Note 21)


















(73,614
)






(73,614
)Net income


















1,872,978



(4,671
)


1,868,307Deferred tax effect of temporary differences related to
    conversion rights (Note 14)






(18,502
)


















(18,502
)Transfer of stock option from capital adjustments to capital
    surplus (Notes 2, 14 and 17)






1,533



(1,533
)














Equity in capital surplus and other comprehensive income of
    affiliates (Notes 2, 5, 14 and 19)






3,508







(73,008
)










(69,500
)Stock compensation plans (Notes 2 and 17)










180















180Unrealized gain on valuation of long-term investment securities
    (Notes 2, 4 and 19)














50,882











50,882Gain on valuation of currency swap (Notes 2, 19 and 28)














35,276











35,276Foreign-based operations translation adjustment
    (Notes 2 and 19)














(2,020
)










(2,020
)Increase in minority interest in equity of consolidated
    subsidiaries






















15,400



15,400Balance, December 31, 2005

W
44,639


W
2,954,840


W
(2,043,625
)

W
(4,890
)

W
7,267,649


W
108,927


W
8,327,540Cash dividends paid (Note 21)


















(588,914
)






(588,914
)Interim cash dividends paid (Note 21)


















(73,714
)






(73,714
)Net income


















1,451,491



(1,939
)


1,449,552Conversion of convertible bonds (Notes 9 and 14)






(3,733
)


















(3,733
)Transfer of stock option from capital adjustments to capital
    surplus (Notes 2, 14 and 17)






234



(234
)














Equity in capital surplus of affiliates (Notes 2, 5
    and 14)






(1,014
)


















(1,014
)Treasury stock (Note 16)










32,178















32,178Loss on disposal of treasury stock (Notes 16 and 18)










(7,887
)














(7,887
)Unrealized gain on valuation of long-term investment securities,
    net (Notes 2, 4 and 19)














471,321











471,321Equity in other comprehensive income changes of affiliates, net
    (Notes 2, 5 and 19)














45,956











45,956Foreign-based operations translation adjustment
    (Notes 2 and 19)














(19,737
)










(19,737
)Gain (loss) on valuation of currency swap, net (Notes 2, 19
    and 28)














(2,311
)










(2,311
)Loss on valuation of interest swap, net (Notes 2, 19
    and 28)














(329
)










(329
)Acquisition and retirement of treasury stock (Note 16)


















(209,078
)






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






















63,258



63,258Balance, December 31, 2006

W
44,639


W
2,950,327


W
(2,019,568
)

W
490,010


W
7,847,434


W
170,246


W
9,483,088    F-7




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS
    EQUITY  (Continued)
 YEARS
    ENDED DECEMBER 31, 2005, 2006 AND 2007
  AccumulatedOther








TotalCommon


Capital


Capital


Comprehensive


Retained


Minority


StockholdersStock


Surplus


Adjustments


Income


Earnings


Interest


Equity(In millions of Korean won)Balance, 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
9,483,088Cash dividends paid (Note 21)


















(508,672
)






(508,672
)Interim cash dividends paid (Note 21)


















(72,668
)






(72,668
)Net income


















1,648,876



(86,611
)


1,562,265Conversion of convertible bonds (Notes 9 and 14)






(11,116
)


















(11,116
)Transfer of stock option from capital adjustments to capital
    surplus (Notes 2, 14 and 17)






3,246



(3,246
)














Difference between the acquisition cost and the net book value
    incurred from the capital transactions between companies under
    common control (Note 14)






(9,696
)


















(9,696
)Equity in capital surplus and other comprehensive income of
    affiliates (Notes 2, 5 and 14)






(7,801
)


















(7,801
)Treasury stock (Note 16)










(26,556
)














(26,556
)Loss on disposal of treasury stock (Notes 16 and 18)










7,793















7,793Unrealized gain on valuation of long-term investment securities
    (Notes 2, 4 and 19)














1,195,385











1,195,385Equity in other comprehensive income changes of affiliates, net
    (Notes 2, 5 and 19)














(105,597
)










(105,597
)Foreign-based operations translation adjustment
    (Notes 2 and 19)














4,162











4,162Gain on valuation of currency swap (Notes 2, 19 and 28)














4,671











4,671Gain on valuation of interest rate swap (Notes 2, 19
    and 28)














2,627











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






















169,748



169,748Balance, December 31, 2007

W
44,639


W
2,924,960


W
(2,041,577
)

W
1,591,258


W
8,914,970


W
253,383


W
11,687,633(In thousands of U.S. dollars) (Note 2 a)Balance, January 1, 2007

$
47,701


$
3,152,732


$
(2,158,119
)

$
523,627


$
8,385,803


$
181,926


$
10,133,670Cash dividends paid (Note 21)


















(543,569
)






(543,569
)Interim cash dividends paid (Note 21)


















(77,654
)






(77,654
)Net income


















1,761,996



(92,553
)


1,669,443Conversion of convertible bonds (Notes 9 and 14)






(11,879
)


















(11,879
)Transfer of stock option from capital adjustments to capital
    surplus (Notes 2, 14 and 17)






3,469



(3,469
)














Difference between the acquisition cost and the net book value
    incurred from the capital transactions between companies under
    common control (Note 14)






(10,361
)


















(10,361
)Equity in capital surplus and other comprehensive income of
    affiliates (notes 2, 5 and 14)






(8,336
)


















(8,336
)Treasury stock (Note 16)










(28,378
)














(28,378
)Loss on disposal of treasury stock (Notes 16 and 18)










8,328















8,328Unrealized gain on valuation of long-term investment securities
    (Notes 2, 4 and 19)














1,277,393











1,277,393Equity in other comprehensive income changes of affiliates, net
    (Notes 2, 5 and 19)














(112,841
)










(112,841
)Foreign-based operations translation adjustment
    (Notes 2 and 19)














4,448











4,448Gain on valuation of currency swap (Notes 2, 19 and 28)














4,991











4,991Gain on valuation of interest rate swap (Notes 2, 19
    and 28)














2,807











2,807Increase in minority interest in equity of consolidated
    subsidiaries






















181,394



181,394Balance, December 31, 2007

$
47,701


$
3,125,625


$
(2,181,638
)

$
1,700,425


$
9,526,576


$
270,767


$
12,489,456    F-8




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 YEARS
    ENDED DECEMBER 31, 2005, 2006 AND 2007
  2005


2006


2007


2007In millions of Korean won


In thousandsof U.S. dollars(Note 2 a)CASH FLOWS FROM OPERATING ACTIVITIES:Net income

W
1,868,307


W
1,449,552


W
1,562,265


$
1,669,443Expenses not involving cash payments:Provision for severance indemnities


47,073



47,370



44,233



47,268Depreciation and amortization


1,675,528



1,698,364



2,000,701



2,137,958Provision for bad debts


115,731



86,321



80,876



86,424Foreign currency translation loss


981



1,106



9,411



10,057Loss on valuation of trading securities


16







1,203



1,286Equity in losses of affiliates


71,825



211,464



175,474



187,512Loss on impairment of investment assets


3,422



27,696



15,526



16,591Loss on disposal of investment assets


4,017



6,096



1,190



1,272Loss on disposal of property, equipment and intangible assets


6,523



17,148



30,730



32,838Impairment loss on assets


260



7,030



3,484



3,723Loss on transaction and valuation of currency swap






9,258



33,876



36,200Amortization of discounts on bonds and other


51,846



51,077



49,345



52,730Sub-total


1,977,222



2,162,930



2,446,049



2,613,859Income not involving cash receipts:Reversal of allowance for doubtful accounts


(450
)


(789
)


(614
)


(656
)Foreign currency translation gain


(658
)


(924
)


(5,373
)


(5,742
)Gain on valuation of trading securities


(1
)






(128
)


(137
)Gain on disposal of investment assets


(24,613
)


(27,490
)


(3,721
)


(3,976
)Equity in earnings of affiliates


(20,949
)


(45,787
)


(247,382
)


(264,353
)Gain on disposal of consolidated subsidiaries


(178,689
)


(1,556
)






Gain on disposal of property, equipment and intangible assets


(4,693
)


(4,507
)


(9,776
)


(10,447
)Gain on transactions and valuation of currency swap


(2,545
)


(16,660
)


(10,799
)


(11,540
)Gain on conversion of convertible bond










(373,140
)


(398,739
)Gain on redemption of bonds payable










(6,160
)


(6,583
)Gain on disposal of other non-current assets and other


(765
)


(3,075
)


(13,623
)


(14,557
)Sub-total


(233,363
)


(100,788
)


(670,716
)


(716,730
)Changes in assets and liabilities related to operating
    activities:Accounts receivable  trade


(210,957
)


(161,914
)


2,738



2,926Accounts receivable  other


22,284



57,253



372,778



398,352Inventories


8,297



(9,145
)


(20,049
)


(21,424
)Prepaid expenses


9,016



61,148



76,293



81,527Accrued income and other


(24,938
)


5,865



(16,225
)


(17,338
)Accounts payable


(34,441
)


161,611



(17,587
)


(18,794
)Income taxes payable


88,477



(44,637
)


(21,791
)


(23,286
)Accrued expenses


(12,944
)


37,985



(4,101
)


(4,382
)Withholdings


19,717



123,003



(111,918
)


(119,596
)Current portion of subscription deposits


1,495



885



(8,220
)


(8,784
)Advance receipts and other


(22,221
)


21,585



25,585



27,340Deferred income taxes


7,640



(76,423
)


121,681



130,029Dividends received from affiliates


785



1,318



2,184



2,334Severance indemnity payments


(24,365
)


(262,948
)


(13,732
)


(14,674
)Deposits for group severance indemnities and other deposits


(32,869
)


162,545



(14,530
)


(15,527
)Sub-total


(205,024
)


78,131



373,106



398,703Net Cash Provided by Operating Activities


3,407,142



3,589,825



3,710,704



3,965,275(Continued) F-9




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS  (Continued)
 YEARS
    ENDED DECEMBER 31, 2005, 2006 AND 2007
  2005


2006


2007


2007In millions of Korean won


In thousandsof U.S. dollars(Note 2 a)CASH FLOWS FROM INVESTING ACTIVITIES :Decrease (increase) in short-term financial instruments

W
(75,261
)

W
4,470


W
(6,974
)

$
(7,452
)Decrease in long-term financial instruments


2



2



2,118



2,263Decrease (increase) in trading securities


(122,710
)


80,060



28,696



30,664Decrease in current portion of long-term investment securities


53,608







156



167Collection of short-term loans


60,530



96,892



119,608



127,814Collection of long-term loans


57



654



3,652



3,903Proceeds from disposal of long-term investment securities


40,889



305,953



76,879



82,153Proceeds from disposal of equity securities accounted for using
    the equity method


7,539



80,014



20,258



21,648Proceeds from disposal of consolidated subsidiary


290,966



39,062







Decrease in guarantee deposits


142,131



71,164



32,594



34,830Decrease in other non-current assets


36,110



19,940



30,444



32,533Proceeds from disposal of property and equipment


34,179



14,353



31,290



33,437Proceeds from disposal of intangible assets


107



1,630



6,739



7,201Cash inflows from transaction of currency swap










8,473



9,054Increase in short-term loans


(59,008
)


(92,753
)


(104,674
)


(111,855
)Increase in long-term loans


(5,766
)


(12,623
)


(100,006
)


(106,867
)Increase in long-term financial instruments


(1,140
)


(10,091
)


(652
)


(697
)Acquisition of long-term investment securities


(319,061
)


(1,127,396
)


(417,528
)


(446,172
)Acquisition of equity securities accounted for using the equity
    method


(231,793
)


(244,333
)


(76,629
)


(81,886
)Increase in guarantee deposits


(75,295
)


(30,290
)


(31,056
)


(33,187
)Increase in other non-current assets


(86,803
)


(132,349
)


(78,853
)


(84,263
)Acquisition of property and equipment


(1,416,622
)


(1,498,142
)


(1,815,966
)


(1,940,549
)Acquisition of intangible assets


(199,494
)


(73,964
)


(115,102
)


(122,999
)Acquisition of minority interest


(11,352
)


(27,406
)


(12,514
)


(13,372
)Net Cash Used in Investing Activities


(1,938,187
)


(2,535,153
)


(2,399,047
)


(2,563,632
)CASH FLOWS FROM FINANCING ACTIVITIES:Increase in short-term borrowings






51,230



35,946



38,412Issuance of bonds payable


193,683



384,990



761,117



813,333Proceeds from long-term borrowings






294,800



28,271



30,211Repayment of short-term borrowings


(376,929
)






(86,561
)


(92,499
)Repayment of current portion of long-term debt


(500,033
)


(815,287
)


(907,176
)


(969,412
)Repayment of bonds payable






(1,230
)


(61,306
)


(65,512
)Payment of dividends


(758,192
)


(662,815
)


(581,309
)


(621,189
)Decrease in facility deposits


(7,670
)


(2,630
)


(14,714
)


(15,723
)Cash outflows from transaction of currency swap










(8,936
)


(9,549
)Acquisition and retirement of treasury stock






(209,078
)


(118,512
)


(126,642
)Disposal of treasury stock










45,133



48,229Increase in minority interest in equity of consolidated
    subsidiaries


21,243



19,050



62,564



66,856Other


(1,140
)


(11,407
)


(10,624
)


(11,355
)Net Cash Used in Financing Activities


(1,429,038
)


(952,377
)


(856,107
)


(914,840
)THE EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
    HELD IN FOREIGN CURRENCIES (Note 2)


(3,036
)


(9,317
)


2,783



2,974NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS DUE TO
    CHANGES IN CONSOLIDATED SUBSIDIARIES


(29,085
)


14,568



154,227



164,808PREACQUISITION CASH FLOWS OF SUBSIDIARIES










(263,133
)


(281,186
)INCREASE IN CASH AND CASH EQUIVALENTS DUE TO MERGER










50,448



53,909NET INCREASE IN CASH AND CASH EQUIVALENTS


7,796



107,546



399,875



427,308CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR


370,630



378,426



485,972



519,312CASH AND CASH EQUIVALENTS AT END OF THE YEAR

W
378,426


W
485,972


W
885,847


$
946,620    F-10




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 YEARS
    ENDED DECEMBER 31, 2005, 2006 AND 2007
  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


51,494,656



63.43Treasury stock


8,609,034



10.6081,193,711



100.00   2.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES    a.
    Basis
    of Presentation  W
 F-11




---



##### Table of Contents



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



Ownership Percentage (%)Subsidiary

Establishment

Primary Business

2005

2006

2007SK Capital Co., Ltd.

1995

Finance


100
.00






SK Telink Co., Ltd.

1998

Telecommunication services


90
.77


90
.77


90
.77SK Communications Co., Ltd.

1999

Internet website services


92
.37


87
.08


65
.71SK Wyverns Baseball Club Co., Ltd.

2000

Business related sports


99
.99


99
.99


99
.99Centurion IT Investment Association

2001

Investment association


37
.50


37
.50


Global Credit & information Corp.

1998

Credit and collection services


50
.00


50
.00


50
.00PAXNet Co., Ltd.

1999

Internet website services


67
.10


59
.74


59
.74Loen Entertainment, Inc. (formerly Seoul Records, Inc.)

1982

Release of music disc


60
.00


60
.00


60
.00IHQ, Inc.

1962

Business related entertainment


21
.60


34
.08


37
.09TU Media Corp.

2003

Satellite broadcasting services


29
.58


29
.58


32
.70AirCross Co., Ltd.

2000

Advertising agency


38
.10


38
.10


100
.00Ntreev Soft Co., Ltd.

2003

Game software


51
.00


51
.00


66
.70Commerce Planet Co., Ltd.(formerly Philio Co., Ltd.)

1997

Cosmetic wholesale










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


48
.39


60
.84


72
.24Michigan Global Cinema Fund

2006

Investment association






36
.36


45
.45SK i-media Co., Ltd.

2006

Game software






60
.00


60
.00YTN Media, Inc

2000

Broadcasting services






51
.42


51
.42Konan Technology

1999

Multimedia contents






7
.51


29
.49SK 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. (formerly SLD Telecom PTE Ltd.)

2000

Telecommunication services


55
.10


73
.32


73
.32SK Telecom USA Holdings, Inc.

2005

Telecommunication services


100
.00


100
.00


100
.00Helio, Inc. & Helio, LLC

2005

Mobile handset services


50
.00


48
.08


64
.86SK Telecom International Inc.

1995

Internet website services


100
.00


100
.00


100
.00SK Cyberpass, Inc.

2001

International telephone call services


70
.54


70
.54


70
.54    F-12




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        W W
    c.
    Use of
    Estimates    d.
    Cash
    Equivalents    e.
    Allowance
    for Doubtful Accounts   F-13




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2005


2006


2007Beginning balance

W
71,090


W
133,499


W
106,737Write-offs


(49,181
)


(90,780
)


(90,475
)Net


21,909



42,719



16,262Provision for doubtful accounts receivable-trade


112,792



61,457



71,439Increase (decrease) due to the changes in consolidated
    subsidiaries


(1,202
)


2,561



5,850End of year

W
133,499


W
106,737


W
93,551   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-14




---



##### 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        i.
    Troubled
    Debt Restructuring    j.
    Property
    and Equipment   F-15




---



##### Table of Contents



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

Depreciation Method

(Years)Buildings and structures

Declining balance method (straight-line method)


15 ~50Machinery

Declining balance method


3 ~9Other

Declining balance method


3 ~5     k.
    Intangible
    Assets      l.
    Government
    Subsidy    m.
    Impairment
    Losses    n.
    Convertible
    Bonds and Bonds with Stock Purchase Warrants   F-16




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  o.
    Discounts
    on Bonds    p.
    Valuation
    of Long-term Payables    q.
    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.    r.
    Accrued
    Severance Indemnities    W W W
  W W W
 F-17




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  W
  W
    2005


2006


2007Beginning net balance

W
80,984


W
71,284


W
22,284Provision


47,073



47,370



44,233Payments to employees


(24,365
)


(262,948
)


(13,732
)Net increase due to the changes in consolidated subsidiaries


594



4,010



6,291Changes in deposits for severance indemnities


(33,002
)


162,568



(14,754
)Ending net balance

W
71,284


W
22,284


W
44,322Ending balance :Accrued severance indemnities

W
267,855


W
51,243


W
90,286Deposits with insurance companies


(191,354
)


(28,868
)


(45,878
)National Pension Fund


(5,217
)


(91
)


(86
)Net balance

W
71,284


W
22,284


W
44,322   s.
    Accounting
    for Employee Stock Option Compensation Plan   F-18




---



##### 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-19




---



##### 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-20




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    ac.
    Adoption
    of New Statements of Korea Accounting Standards
    (SKAS)    
    Through 2004, when the Companys equity interests in the
    equity method investees were diluted as a result of the equity
    method investees new issuance of their common stocks to
    third parties, the changes in the Companys proportionate
    equity of investees were accounted for as capital transactions.
    Effective January 1, 2005, such transactions are accounted
    for as income statement treatment, pursuant to adoption of SKAS
    No. 15, Investments : Equity Method. As a
    result of adopting SKAS No. 15, net income for the year
    ended December 31, 2005 increased by
    W6,262 million (net of tax effect of
    W2,375 million).
    Through 2004, tax effects of temporary differences related to
    capital surplus or capital adjustment (accumulated other
    comprehensive income) were excluded in determining the deferred
    tax assets or liabilities. Effective January 1, 2005, such
    tax effects of temporary differences are included in determining
    the deferred tax assets or liabilities, pursuant to adoption of
    SKAS No. 16 Income Taxes. Accordingly,
    adjustments made directly to capital surplus or capital
    adjustments (accumulated other comprehensive income), which
    result in temporary differences, are recorded net of related tax
    effects. In addition, effective January 1, 2005, deferred
    income tax assets and liabilities which were presented on the
    balance sheet as a single non-current net number through 2004,
    are separated into current and non-current portions. As a result
    of adopting SKAS No. 16, total assets and total liabilities as
    of December 31, 2005 increased by
    W67,612 million and
    W97,768 million, respectively, and total
    stockholders equity as of December 31, 2005 decreased
    by W30,156 million, which was directly
    reflected in capital surplus or capital adjustment (accumulated
    other comprehensive income) (see Note 18).
    Through 2004, provisions were recorded at nominal value.
    Effective January 1, 2005, provisions are recorded at the
    present value when the effect of the time value of money is
    material, pursuant to adoption of SKAS No. 17
    Provisions, Contingent Liabilities and Contingent
    Assets. SKAS No. 17 is prospectively applied and as a
    result of adopting such accounting standard, total liabilities
    as of December 31, 2005 decreased by
    W7,415 million and net income for the year
    ended December 31, 2005 increased by
    W5,376 million (see Note 27).      
    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 F-21




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  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.  3.
    INVENTORIES    2005


2006


2007Merchandise

W
863


W
1,167


W
42,787Finished goods


766



2,282



4,054Semi-finished goods






41



706Raw materials


493



313



165Supplies


6,301



16,782



3,733Total


8,423



20,585



51,445Less allowance for valuation loss


(639
)


(807
)


(4,393
)Net

W
7,784


W
19,778


W
47,052   4.
    INVESTMENT
    SECURITIES  a.
    Trading
    Securities    AcquisitionCost at


Fair Value atDecember 31,


December 31,


Carrying Amount2007


2007


2005


2006


2007(Note a)Stocks

W



W



W
12


W
12


W
Beneficiary certificates


636,509



635,434



777,460



665,300



635,434Total

W
636,509


W
635,434


W
777,472


W
665,312


W
635,434     (note a)
    The difference between the fair value and the acquisition cost
    of trading securities amounting to
    W1,075 million as of December 31,
    2007 was accounted for as gain on valuation of trading
    securities of W128 million and loss on
    valuation of trading securities of
    W1,203 million. F-22




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   b.
    Long-term
    Investment Securities    2005


2006


2007Available-for-sale equity securities

W
923,821


W
1,011,971


W
4,689,905Available-for-sale debt securities


296,273



1,463,636



469,729Held-to-maturity securities


115



146



94Total


1,220,209



2,475,753



5,159,728Less current portion


(1
)


(335
)


(101,209
)Long-term portion

W
1,220,208


W
2,475,418


W
5,058,519   b-(1).
    Available-for-sale
    Equity Securities    December 31, 2007


Carrying AmountOwnershipNumber of


Percentage

Acquisition


FairShares


(%)

Cost


Value


2005


2006


2007(Investments in listed companies)Digital Chosunilbo Co., Ltd.


2,890,630



7
.8

W
5,781


W
8,629


W
5,796


W
5,897


W
8,629hanarotelecom incorporated


11,045,000



4
.8


121,677



116,525



56,440



88,581



116,525KRTnet Corporation


234,150



4
.4


1,171



2,470



2,646



2,517



2,470POSCO


2,481,310



2
.8


332,662



1,426,753



501,225



766,725



1,426,753DAEA TI Co., Ltd. (Formerly Comas Interactive Co., Ltd.)


99,120



0
.2


1,695



228



83



83



228eXtended Computing Environment Co., Ltd. (note a)


133,333



3
.3


10



905



10



876



905nTels Co., Ltd. (note b)


205,200



8
.2


34



1,525



34



34



1,525Qualcomm Inc.


55,805



0
.1


2,756



2,060











2,060China Unicom Ltd. (note c)


899,745,075



6
.6


1,333,009



1,936,840











1,936,840ZeroOne Interactive Co., Ltd.


2,472,999



7
.2


4,500



2,770







3,845



2,770T-Entertainment Co., Ltd.


1,026,695



6
.2


2,500



1,817











1,817HB Entertainment Co., Ltd.


















2,408



1,137



sub-total










1,805,795



3,500,522



568,642



869,695



3,500,522(Investments in non-listed companies)LG Powercomm Co., Ltd. (Formerly Powercomm Co., Ltd.) (note d)


7,500,000



5
.0


240,243



89,422



77,130



80,370



89,422SK C&C Co., Ltd. (note e)


6,000,000



30
.0


501,652



1,037,604











1,037,604Japan MBCO (note f)


54,000



7
.3


27,332







27,332







Eonex Technologies Inc. (note g)


144,000



12
.3


3,600



(note g
)


4,593



4,593



4,593The Korea Economic Daily


2,585,069



13
.8


13,964



(note g
)


13,964



13,964



13,964Cheongsol


4,328



7
.7


5,000



(note g
)






5,000



5,000Other (note h)










132,244



(note g
)


32,168



34,333



20,611sub-total










924,035







155,187



138,260



1,171,194(Investments in funds)Korea IT Fund (note i)


















190,000







Others (note j)










18,313







9,992



4,016



18,189sub-total










18,313







199,992



4,016



18,189Total









W
2,748,143






W
923,821


W
1,011,971


W
4,689,905  F-23




---



##### Table of Contents



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


The common stocks of eXtended Computing Environment Co., Ltd.
    were newly listed on the Korea Securities Dealers Automated
    Quotation in the Korea Stock Exchange during the year ended
    December 31, 2006.(note b)


The common stocks of nTels Co., Ltd. were newly listed on the
    Korea Securities Dealers Automated Quotation in the Korea Stock
    Exchange during the year ended December 31, 2007.(note c)


In accordance with the resolution of the Companys board of
    directors of August 20, 2007,   convertible bonds of China
    Unicom Ltd. were converted into common stocks and reclassified
    to available-for-sale equity securities from available-for-sale
    debt securities.(note d)


The Company recorded its investments in common stock of LG
    Powercomm Co., Ltd. at its fair value, which was estimated by
    assistance of an outside professional valuation company using
    the present value technique.  The unrealized loss on valuation
    of investments amounting to W163,113 million,
    W159,873 million and
    W150,820 million as of December 31, 2005, 2006
    and 2007, respectively, were recorded as accumulated other
    comprehensive loss.(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
    fourth quarter of 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 by assistance of an outside
    professional valuation company using the present value
    technique. The unrealized gain on valuation of investments
    totaling W691,248 million as of December 31,
    2007 including the equity in other comprehensive income of
    affiliates amounting to W155,295 million
    incurred prior to the reclassification was recorded as
    accumulated other comprehensive income.  In addition, its
    acquisition cost was adjusted to the carrying amount valued
    using the equity method of accounting less the equity in other
    comprehensive income of affiliates prior to the reclassification.(note f)


Due to the impairment of the Companys investments in
    common stock of Japan MBCO, the Company recorded impairment loss
    on such investments of W27,332 million for the
    year ended December 31, 2006.(note g)


As a reasonable estimate of fair value could not be made, the
    investment is stated at acquisition cost.  The investment in
    common stock of Eonex Technologies Inc. was reclassified to
    available-for-sale securities from equity securities accounted
    for using the equity method during the year ended December 31,
    2003, as the Companys ownership in such investees
    decreased to less than 20% and the Company no longer exercises
    significant influence. Such securities were transferred to
    available-for-sale securities at the carrying amount valued
    using the equity method of accounting prior to the
    reclassification. Meanwhile, during the year ended December 31,
    2007, the investment in common stock of Pantech Co., Ltd. was
    reclassified to available-for-sale equity securities from equity
    securities accounted for using the equity method as the Company
    no longer exercise significant influence over the investee as a
    result of Pantechs 20 to 1 stock consolidation which
    resulted in decrease in the Companys ownership to 0.5%
    from 22.7%.  And, the carrying amount of the investment as of
    December 31, 2007 is nil.(note h)


Due to the impairment of the Companys investments in
    common stock of TeleMerc.com, Fibernett Co., Ltd. and others in
    2005, Astro Nest Inc., D&D Media Inc. and others in 2006
    and Skycross Korea Co., Ltd., GOMID Co., Ltd. and others in
    2007, the Company recorded impairment losses of
    W3,057 million,
    W364 million and W5,342
    million for the years ended December 31, 2005, 2006 and 2007,
    respectively.(note i)


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 the ability to
    exercise significant influence on the investee.(note j)


Due to the impairment of their investments in cinema projects,
    the Company recorded impairment losses of W235
    million, nil and W124 million for the year
    ended December 31, 2005, 2006 and 2007, respectively.  F-24




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  b-(2).  Available-for-sale
    Debt Securities
    AcquisitionCostat December 31,


Carrying AmountMaturity

2007


2005


2006


2007Public bonds

(note a)

W
51,558


W
1,599


W
51,313


W
51,353Currency stabilization bonds

(note b)


49,948



294,674



49,894



49,713Closed beneficiary certificates

Oct. 20, 2009


4,750











4,788Bond-type beneficiary certificates

(note c)


351,385







5,072



360,641Convertible bonds of Real Telecom Co., Ltd. (note d)

Mar. 29, 2007


10,656











Convertible bonds of China Unicom Ltd. (note e)

Jul. 5, 2009










1,276,703



Convertible bonds of Eonex Technologies, Inc. (note f)

Oct. 11, 2008


1,000







1,000



1,000Convertible bonds of Empas Corp. (note g)

Oct. 18, 2009










78,670



Others




2,234







984



2,234Total




471,531



296,273



1,463,636



469,729Less current portion of available-for-sale debt securities




(101,789
)






(256
)


(101,209
)Long-term available-for-sale debt securities



W
369,742


W
296,273


W
1,463,380


W
368,520   W W W
    (note a)


The maturities of public bonds as of December 31, 2007 are
    within 1 year for W50,145 million and
    within 5 years for W1,208 million.(note b)


The maturities of currency stabilization bonds as of
    December 31, 2007 are within 1 year.(note c)


The maturities of bond-type beneficiary certificates as of
    December 31, 2007 are within 1 year for
    W1,251 million and within 5 years for
    W359,390 million.(note d)


The convertible bonds of Real Telecom Co., Ltd. with a principal
    amount of W10,656 million can be converted
    into 371,018 shares of common stock of Real Telecom Co.,
    Ltd. at W28,721 per share during the period
    from September 29, 2004 to March 28, 2007. Due to the
    impairment of such bonds, the Company recorded an impairment
    loss of W10,656 million prior to
    December 31, 2004.(note e)


In accordance with the resolution of the Companys board of
    directors of August 20, 2007, convertible bonds of China
    Unicom Ltd. were converted into its common stocks and
    reclassified to available-for-sale equity securities from
    available-for-sale debt securities. As a result of such
    conversion, the Company recorded gain on conversion of
    convertible bonds of W373,140 million for
    the year ended December 31, 2007.(note f)


On October 11, 2006, the Company purchased convertible
    bonds of Eonex Technologies, Inc. at principal amount of
    W1,000 million. Such convertible bonds can
    be converted into 7,142 shares of common stock of Eonex
    Technologies, Inc. at W140,000 per share during
    the period from April 1, 2007 to October 11, 2008.
    Unless either early redeemed or converted, the notes are
    redeemable at 106% of the principal amount at maturity. If all
    such bonds are converted, the Companys equity interest in
    Eonex Technologies, Inc. will increase to 12.9%.(note g)


SK Communications Co., Ltd., a subsidiary of SK Telecom
    purchased convertible bonds of Empas Corp. on October 19,
    2006. On November 1, 2007, SK Communications Co., Ltd.
    merged Empas Corp., and the convertible bonds of Empas Corp.
    were totally retired.  F-25




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  b-(3).  Held-to-maturity
    Securities
    Acquisition Costat December 31,


Carrying AmountMaturity


2007


2005


2006


2007Public bonds


(note a
)

W
94


W
115


W
146


W
94Less current portion of held-to-maturity securities










(1
)


(79
)


Long-term held-to-maturity securities









W
114


W
67


W
94   W W W
    (note a)


The maturities of public bonds as of December 31, 2007 are
    within 5 years for W31 million and
    within 10 years for W63 million.   b-(4).  Changes
    in Unrealized Gains (Losses) on Valuation on Long-term
    Investment Securities
    For the Year Ended December 31, 2005Minority InterestTransferred


in Equity ofBeginning


Increase/


to Realized


Consolidated


EndingBalance


(Decrease)


Gain (Loss)


Subsidiaries


BalanceDigital Chosunilbo Co., Ltd.

W
(3,758
)

W
3,772


W



W



W
14hanarotelecom incorporated


(50,657
)


(14,580
)










(65,237
)KRTnet Corporation


1,007



468











1,475POSCO


131,343



37,220











168,563Comas Interactive Co., Ltd. (Formerly INNOTG Co., Ltd.)


(1,543
)


(68
)










(1,611
)HB Entertainment Co., Ltd.






150







(94
)


56SK Securities Co., Ltd.


(3,133
)


3,610



(477
)






SINJISOFT Corporation


460







(460
)






Cowon Systems, Inc.






585



(585
)






LG Powercomm Co., Ltd. (Formerly Powercomm Co., Ltd.)


(168,678
)


5,565











(163,113
)Eonex Technologies Inc.


2,011















2,011WiderThan Co., Ltd.


(27
)


27











Currency stabilization bonds






(217
)










(217
)Sub-total


(92,975
)


36,532



(1,522
)


(94
)


(58,059
)Less tax effect (note a)


25,568



(10,046
)


418



26



15,966Total

W
(67,407
)

W
26,486


W
(1,104
)

W
(68
)

W
(42,093
)   F-26




---



##### Table of Contents



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


in Equity ofBeginning


Increase/


to Realized


Consolidated


EndingBalance


(Decrease)


Gain (Loss)


Subsidiaries


BalanceDigital Chosunilbo Co., Ltd.

W
14


W
102


W



W



W
116hanarotelecom 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.(Formerly 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-27




---



##### Table of Contents



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


in Equity ofBeginning


Increase/


to Realized


Consolidated


EndingBalance


(Decrease)


Gain (Loss)


Subsidiaries


BalanceDigital Chosunilbo Co., Ltd.

W
116


W
2,731


W



W



W
2,847hanarotelecom 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. (Formerly 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     (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-28




---



##### 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, 2007


Carrying AmountOwnershipNumber


Percentage


Acquisition


Net assetof Shares


(%)


Cost


Value


2005


2006


2007Pantech Co., Ltd. (Formerly SK Teletech Co., Ltd.)









W



W

(note a)

W
55,732


W



W
SK C&C Co., Ltd.















(note b)


168,244



268,278



STIC Ventures Co., Ltd.















(note c)


8,379



8,611



TU Media Corp.















(note d)


32,343



7,214



AirCross Co., Ltd.















(note e)


966



1,477



Harex Info Tech, Inc.


225,000



21.2



3,375



417



2,530



1,805



1,118SK Mobile






42.5



10,322



3,273
(note f)






4,666



3,273Skytel Co., Ltd.


1,756,400



26.4



2,159



7,743



4,786



5,823



7,743SK China Company Ltd.


28,160



20.7



3,195



1,222



485







137Helio, LLC & Helio, Inc.















(note g)


102,272



80,130



SK USA, Inc.


49



49.0



3,184



3,141



3,279



3,016



3,141Korea IT Fund


190



14.3



190,000



210,568
(note h)






193,061



210,568Michigan Global Cinema Fund















(note i)


4,000



3,773



3rd Fund of Isu Entertainment






31.3



3,000



2,028



2,500



2,419



2,028Centurion IT Investment Association






53.2



1,930



2,463
(note j)










2,463CDMA Mobile Phone Center






50.0



147,627



66,001



40,810



84,689



66,001Empas Corp.















(note k)






36,474



SK i-media Co., Ltd.















(note l)






11,312



Cyworld Japan Co., Ltd.


1,250,000



100.0



10,584



1,943
(note m)


726



4,362



4,091Cyworld Incorporated


9,500,000



100.0



9,071




(note m)


524



3,592



2,672SK Telecom China Holding Co., Ltd






100.0



19,070



19,070
(note m)










19,070Ntreev Soft Co., Ltd.















(note l)






4,800



Konan Technology















(note l)






4,037



SK Cyberpass, Inc.















(note l)


1,949



1,780



Cyworld Europe GmbH






50.2



4,208



1,321
(note m)






512



Cyworld China (Holdings) Ltd.


9,000,100



100.0



8,467




(note m)






12



WiderThan Co., Ltd.


















11,503







IHQ, Inc.


















14,755







SKT-HP Ventures, LLC.


















5,290







Etoos Group Inc.


















2,586







Other investment in affiliates










35,601







8,220



19,090



28,661Total









W
451,793






W
471,879


W
750,921


W
350,966     (note a)

60% equity interests in SK Teletech Co., Ltd. were sold to
    Curitel Communications, Inc. and the Company recorded a gain of
    W178,689 million for the year ended
    December 31, 2005. As the Companys ownership in SK
    Teletech Co., Ltd. decreased from 89.1% to 29.1%, SK Teletech
    Co., Ltd. was excluded from consolidation effective July 1,
    2005. In addition, the investments in common stock of SK
    Teletech Co., Ltd. were accounted for using the equity method of
    accounting for the six months ended December 31, 2005. In
    addition, effective December 1, 2005, SK Teletech Co., Ltd
    was merged into Pantech Co., Ltd. and the Companys
    ownership interest decreased from 29.1% to 22.7%. The difference
    between the Companys portion of the merged companys
    equity and the carrying amount at the date of merger of
    W269 million was recorded as a loss on
    disposal of investment assets for the year ended
    December 31, 2005. On December 11, 2006, Pantech Co.,
    Ltd. requested its creditor banks for a debt restructuring due
    to deterioration of its liquidity. On December 15, 2006,
    Pantech entered into creditor banks agreement (the
    Agreement) with its eight creditor banks including
    Korea Development Bank (KDB), its main creditor
    bank. In the first half of 2007, the Companys shares of
    Pantech were reduced to 1,278,515 shares from
    25,570,306 shares in accordance with the Pantechs 20
    to 1 stock consolidation. In accordance with debt-equity swap,
    the Companys ownership decreased from 22.7% to 0.5% for
    the year ended December 31, 2007. As a result, the
    investment in common stock of Pantech was reclassified to
    available-for-sale equity securities during the year ended
    December 31, 2007 as the Company no longer exercises
    significant influence over the investee. F-29




---



##### Table of Contents



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

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 c)

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

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 e)

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 from this year.(note f)

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

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 h)

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 i)

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 j)

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 k)

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

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 m)

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.  F-30




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    For the Year Ended December 31, 2005Equity in CapitalEquity in


Surplus and Other





OtherBeginning





Earnings


Comprehensive


Dividend


Increase


EndingBalance


Acquisition


(Losses)


Income


Received


(Decrease)


BalancePantech Co., Ltd.


(note a
)

W



W



W
93


W
(183
)

W



W
55,822


W
55,732SK C&C Co., Ltd.


(note b
)


201,484







18,102



(50,742
)


(600
)






168,244STIC Ventures Co., Ltd.


(note c
)


7,477







(779
)


317







1,364



8,379TU Media Corp.






34,592



25,611



(27,852
)


(8
)










32,343AirCross Co., Ltd.






940







26















966WiderThan Co., Ltd.


(note d
)










868



7







10,628



11,503IHQ, Inc.


(note c
)






14,440



(197
)


410







102



14,755Harex Info Tech, Inc.


(note e
)


3,375







(845
)














2,530Skytel Co., Ltd.


(note b
)


3,713







1,377



(120
)


(184
)






4,786SK China Company Ltd.






830







(295
)


(50
)










485Helio, LLC & Helio, Inc.


(note f
)






123,586



(21,550
)










236



102,272SK USA, Inc.






3,056







316



(93
)










3,279SKT-QC Wireless Development Fund


(note g
)


5,146



















(5,146
)


SKT-HP Ventures, LLC






5,281







167



(158
)










5,290CDMA Mobile Phone Center


(note h
)


25,116



33,950



(13,376
)










(4,880
)


40,810SK Mobile


(note i
)


1,151



14,213



(2,566
)


(22
)






(12,776
)


Cyworld Japan Co., Ltd.










4,466



(3,867
)


127











726Etoos Group Inc.










3,095



(498
)


(11
)










2,586Other investment in affiliates






11,867



12,432















(7,106
)


17,193W
304,028


W
231,793


W
(50,876
)

W
(50,526
)

W
(784
)

W
38,244


W
471,879     (note a)

Other increase in investments in equity securities of Pantech
    Co., Ltd. is net of the carrying amount of the investment in
    equity securities of SK Teletech Co., Ltd. amounting to
    W56,091 million reclassified to equity
    securities accounted for using the equity method as a result of
    the decrease in the Companys ownership in SK Teletech Co.,
    Ltd. to less than 50% and the dilution of the Companys
    equity portion of W269 million as a result
    of the merger between Pantech Co., Ltd. and SK Teletech Co., Ltd.(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)

Other increases in investments in equity securities of STIC
    Ventures Co., Ltd. and IHQ, Inc. represent gains on disposal of
    investments in equity securities resulting from the dilution of
    the Companys ownership as a result of the fact that
    investees sold their unissued shares to third parties directly.(note d)

Other increase in investments in equity securities of WiderThan
    Co., Ltd. represents the carrying amount of the investment in
    equity securities of WiderThan Co., Ltd. amounting to
    W3,188 million reclassified to equity
    securities accounted for using the equity method from
    available-for-sale securities and gains on disposal of
    investments in equity method investee of
    W7,440 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.(note e)

Effective January 1, 2005, the Company recorded its
    investments in Harex Info Tech, Inc. using the equity method of
    accounting as changes in the Companys portion of such
    investees equity amounts resulting from applying the
    equity method of accounting is material.(note f)

The increase in investments in equity securities of Helio LLC
    and Helio, Inc. represents a translation gain incurred from
    translating the financial statements of SK Telecom USA Holdings,
    Inc. denominated in foreign currency, which makes investments in
    Helio, Inc. into Korean won.(note g)

Investment was fully liquidated due to dissolution of SKT-QC
    Wireless Development Fund during the year ended
    December 31, 2005.(note h)

For the year ended December 31, 2005, SLD received a cash
    distribution of W3,956 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 a in-kind contribution
    from SLD. In addition, translation loss of
    W924 million incurred from translating the
    foreign currency financial statements of SLD Telecom PTE Ltd.
    into Korean won was accounted for as a decrease in the
    investment in CDMA Mobile Phone Center. F-31




---



##### Table of Contents



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

Effective January 1, 2005, SK Mobile became an equity
    method investee of SK Teletech Co., Ltd., a former subsidiary of
    the Company as changes in SK Teletech Co., Ltd.s portion
    of such investees equity amounts resulting from applying
    the equity method of accounting was material. Effective
    July 1, 2005, the investment in equity securities of SK
    Teletech Co., Ltd. was reclassified to equity securities
    accounted for using the equity method, which resulted in the
    exclusion of SK Mobile from equity securities accounted for
    using the equity method.   For the Year Ended December 31, 2006Equity inCapital SurplusEquity in


and 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
(165,677
)

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.(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 a 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-32




---



##### Table of Contents



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


and 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.(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 a 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 a 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. F-33




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (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.     For the Year Ended December 31, 2005Beginning








EndingBalance


Increase


Amortization


BalancePantech Co., Ltd.

W



W
820


W
(27
)

W
793SK C&C Co., Ltd.


5,276







(406
)


4,870TU Media Corp.






1,045



(52
)


993IHQ, Inc.






7,377



(1,110
)


6,267Harex Info Tech, Inc.






1,752



(350
)


1,402Etoos Group Inc.






1,914



(333
)


1,581Total

W
5,276


W
12,908


W
(2,278
)

W
15,906   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   F-34




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  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     For the Year Ended December 31, 2005Beginning








EndingBalance


Increase


Decrease


BalanceSK China Company Ltd.

W
1,086


W



W



W
1,086Cyworld Japan Co., Ltd.






2,569



(43
)


2,526Total

W
1,086


W
2,569


W
(43
)

W
3,612   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  F-35




---



##### Table of Contents



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


Total





IncomeAssets


Liabilities


Revenue


(Loss)Harex Info Tech, Inc.

W
3,544


W
1,573


W
5,626


W
(1,589
)SK Mobile


8,777



1,077



2,367



(3,949
)Skytel Co., Ltd.


32,934



3,610



26,309



9,703SK China Company Ltd.


7,601



1,697







307SK USA, Inc.


7,454



1,045



7,712



196Korea IT Fund


332,476







33,644



22,7103rd Fund of Isu Entertainment


5,408







234



(2,332
)Centurion IT Investment Association


4,630



1



107



93CDMA Mobile Phone Center


346,789



214,786



55,023



(41,303
)Cyworld Japan Co., Ltd.


2,177



234



114



(3,741
)Cyworld Incorporated


3,365



6,571



55



(6,534
)SK Telecom (China) Holding Co., Ltd.


19,070











Cyworld Europe GmbH


2,712



81



127



(5,125
)Cyworld China (Holdings) Ltd.


8,608



9,287



420



(8,912
)   6.
    LOANS TO
    EMPLOYEES    2005


2006


2007Loans to employees stock ownership association

W
14,586


W
7,526


W
34,817Loans to employees for housing and other


4,799



4,580



15,231W
19,385


W
12,106


W
50,048   W W
 F-36




---



##### Table of Contents



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

2005


2006


2007Land



W
466,562


W
473,109


W
454,916Buildings and structures

15-50


1,484,360



1,502,755



1,510,199Machinery

3-9


10,510,486



11,380,257



12,909,629Other

3-5


846,813



1,004,196



1,028,442Construction in progress




264,309



132,831



308,955Total




13,572,530



14,493,148



16,212,141Less accumulated depreciation




(8,909,161
)


(9,985,813
)


(11,242,431
)Government subsidy












(356
)Property and equipment, net



W
4,663,369


W
4,507,335


W
4,969,354   W W W
    For the Year Ended December 31, 2005Beginning














EndingBalance


Acquisition


Disposal


Transfer


Depreciation


BalanceLand

W
466,460


W
723


W
(4,698
)

W
4,077


W



W
466,562Buildings and structures


1,166,542



12,581



(8,095
)


35,472



(55,406
)


1,151,094Machinery


2,643,107



54,681



(18,990
)


983,489



(1,182,664
)


2,479,623Other


289,811



768,328



(3,991
)


(657,560
)


(94,807
)


301,781Construction in progress


138,002



580,309







(454,002
)






264,309Total

W
4,703,922


W
1,416,622


W
(35,774
)

W
(88,524
)

W
(1,332,877
)

W
4,663,369   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
)






132,831Total

W
4,663,369


W
1,498,142


W
(27,373
)

W
(320,619
)

W
(1,306,184
)

W
4,507,335   F-37




---



##### 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


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     8.
    INTANGIBLE
    ASSETS    December 31, 2007


Carrying AmountsAccumulated


AccumulatedAcquisition Cost


Amortization


Impairment


2005


2006


2007Goodwill

W
2,521,640


W
(837,233
)

W
(50
)

W
1,868,932


W
1,775,695


W
1,684,357Frequency use rights


1,385,120



(424,818
)






1,184,292



1,076,833



960,302Software development costs


243,345



(222,940
)


(568
)


65,991



45,653



19,837Other


1,377,334



(606,181
)


(1,687
)


333,674



620,230



769,466W
5,527,439


W
(2,091,172
)

W
(2,305
)

W
3,452,889


W
3,518,411


W
3,433,962     For the Year Ended December 31, 2005Beginning

















EndingBalance


Acquisition


Disposal


Transfer


Amortization


Impairment


BalanceGoodwill

W
1,994,339


W



W



W
9,223


W
(134,630
)

W



W
1,868,932Frequency use rights


1,163,319



117,380











(96,407
)






1,184,292Software development costs


105,955



1,472











(41,436
)






65,991Other


259,290



80,642



(342
)


64,522



(70,178
)


(260
)


333,674W
3,522,903


W
199,494


W
(342
)

W
73,745


W
(342,651
)

W
(260
)

W
3,452,889   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-38




---



##### 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
)


19,837Other


620,230



119,135



110,850



(5,750
)


130,358



(205,211
)


(146
)


769,466Total

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       Amount


Description

Residual Useful LivesGoodwill

W
1,563,560


Goodwill related to merger
    of Shinsegi Telecomm, Inc.

12 years and 3 months2


37,770


Goodwill related to merger
    of Empas Corp.

4 years and 10 monthsIMT license


868,465


Frequency use rights relating to
    W-CDMA service

(note a)WiBro license


85,823


WiBro service

(note b)DMB license


6,013


DMB service

8 years and 6 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% (4.56% as of December 31,
    2007). The future payment obligations are
    W110,000 million in 2008,
    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 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, 2007, the
    present value discount related to the current portion and
    long-term portion of payments to be made to MIC amounts to
    W681 million and
    W27,886 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-39




---



##### Table of Contents



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


InterestYear


Rate (%)

2005


2006


2007Domestic general bonds


2006


5.0-6.0

W
800,000


W



W
2


2007


5.0-6.0


700,000



700,000



2


2008


5.0


300,000



300,000



300,0002


2009


5.0


300,000



300,000



300,0002


2010


4.0


200,000



200,000



200,0002


2011


3.0


200,000



200,000



200,0002 (note
    a)


2012


3 month Euro Yen










104,166Libor+0.552


2013


4.0






200,000



200,0002


2014


5.0










200,0002


2016


5.0






200,000



200,000Unsecured private bonds (note c)


2008


6.07-6.14










30,0002 (notes
    b and c)


2009


6.51-7.48










34,5842 (note
    c)


2009


6.45










30,0002 (note
    c)


2010


6.50-7.07










36,250Unsecured public bonds (note c)


2008


5.50










50,0002 (note
    c)


2010


6.30-6.81










110,000Dollar denominated bonds (US$300,000)


2011


4.25


303,900



278,880



281,460Dollar denominated bonds (US$400,000)


2027


6.63










375,280Private bonds (¥125,000)


2007


4.65






684



Convertible bonds (SK Telecom) (note d)


2009





385,885



356,356



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








3,189,785



2,755,960



2,920,155Less discounts on bonds








(40,016
)


(39,422
)


(46,557
)Less conversion right adjustments








(65,218
)


(46,079
)


(19,665
)Less warrant right adjustments












(23
)


Add long-term accrued interest








24,808



23,854



17,256Net








3,109,359



2,694,290



2,871,189Less portion due within one year








(795,151
)


(698,967
)


(522,528
)Long-term portion







W
2,314,208


W
1,995,323


W
2,348,661     (note a)

As of December 31, 2007, the
    3-months
    Euro Yen LIBOR rate is 0.895%.(note b)

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

These bonds are unsecured private bonds of TU Media Corp. which
    was newly included in consolidation of accompanying consolidated
    financial statements for the year ended December 31, 2007.(note d)

The principal amount of these convertible bonds denominated in
    U.S. dollar as of December 31, 2005, 2006 and 2007 are
    US$329,450,000, US$304,240,000 and US$229,160,000, respectively.     Convertible
    Bonds Issued by SK Telecom
  W W
 F-40




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  W W
    W W
  W W W
  Convertible
    Bonds and Bonds with Stock Purchase Warrants Issued by
    Subsidiaries
  W W
   F-41




---



##### Table of Contents



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

Annual InterestLender

Maturity Year

Rate (%)

2005


2006


2007(Note a)Shinhan Bank (note b)

2010

91 days CD yield +
    0.25

W



W
200,000


W
200,0002

2011

3.58









W
762Small Business Corporation

2009

5.25









W
156Calyon Bank

2013

6M Libor + 0.29

US$



US$
50,000


US$
50,000DBS Bank

2

2





US$
25,000


US$
25,000SMBC

2

2





US$
25,000


US$
25,000Earthlink, Inc.

2010

10









US$
30,000Industrial Bank of Korea

2008

3.50 ~ 3.90

¥
14,802


¥
8,880


¥
2

2009

3.11

¥
12,800


¥
9,100



2

2010

3.47 ~ 3.97

W



W



W
641Resona Bank

2010

1.85

¥



¥



¥
98,573Total





W



W
200,000


W
201,559US$



US$
100,000


US$
130,000¥
27,602


¥
17,980


¥
98,573Equivalent in Korean won





W
237


W
293,101


W
324,346Less portion due within one year






(82
)


(75
)


(925
)Long-term portion





W
155


W
293,026


W
323,421    (note a)


At December 31, 2007, the
    91-day CD
    yield and the 6M LIBOR rate are 5.82% and 4.65%, respectively.(note b)


This long-term borrowings is classified as long-term borrowing
    as the borrowing is to be rolled-over exceeding 1 year from
    December 31, 2007 in accordance with the loan agreement.     Long-Term BorrowingLong-Term


in Foreign CurrenciesBorrowing in


Foreign


Korean WonYear Ending December 31,

Korean Won


Currencies


Equivalent


Total2008

W
508


¥
50,067


W
417


W
9252009


541


¥
33,258



278



819¥
15,2482010


200,382


US$
30,000



28,273



228,6552011


127











1272012 and thereafter





US$
100,000



93,820



93,820Total





¥
98,573W
201,558


US$
130,000


W
122,788


W
324,346  F-42




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  11.
    SUBSCRIPTION
    DEPOSITS      Deposit perService Type

Subscriber


2005


2006


2007Cellular

W
200,000


W
23,770


W
21,140


W
6,425       12.
    LEASES    W W
  Annual LeaseYear Ending December 31,

Payments


Interest


Principal2008

W
2,306


W
89


W
2,2172009


425



36



3892010


333



10



323Total

W
3,064


W
135



2,929Less portion due within one year










(2,217
)Finance lease liabilities









W
712  F-43




---



##### Table of Contents



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

Payments2008

W
7,7042009


6,7232010


4,8332011


1,9222012 and thereafter


7,545Total

W
28,727   13.
    ASSETS
    AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES    Foreign Currencies


Korean Won Equivalent2005


2006


2007


2005


2006


2007Cash and cash equivalents

US$
11,826


US$
1,330


US$
357,413


W
11,980


W
1,236


W
335,3252

EUR
3


EUR
2


EUR
117



3



2



1622

VND
902,819











58







2

SG
$30











18







US$
31,334


US$
30,849


US$
26,818



31,741



28,677



25,161Accounts receivable  trade





¥
800


¥
41,307







6



3442

EUR
248


EUR
248


EUR
248



298



303



3432









CNY
5,620











722Short-term loans









US$
2,419











2,270Accounts receivable  other

US$
3,364


US$
1,657


US$
965



3,408



1,541



9052

VND
6,173,479











394







Guarantee deposits





US$
17


US$
12







16



112

¥
16,156


¥
21,536


¥
16,912



139



168



141Total assets













W
48,039


W
31,949


W
365,384   F-44




---



##### Table of Contents



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


Korean Won Equivalent2005


2006


2007


2005


2006


2007Accounts payable  trade

US$
28,360






US$
27,904


W
28,728


W



W
26,1792









¥
1,251











10Accounts payable  other

US$
15,737


US$
36,373


US$
22,596



15,942



33,812



21,1992

¥
8,498


¥
19,956


¥
16,954



73



156



1412

HK$
254


HK$
190


HK$
248



33



23



302





CNY
2


CNY
2











2

GBP
453


GBP
48


GBP
931



791



88



1,7452

SG$
22


SG$
6


SG$
27



13



4



182

EUR
504


EUR
813


EUR
588



604



993



8122

CHF
19


CHF
250


CHF
250



15



190



2082

CA$
2


CA$
2


CA$




2



1



2

VND
11,823,640











755







2





FRF
11


FRF
11







2



2Total liabilities













W
46,956


W
35,269


W
50,344   14.
    CAPITAL
    STOCK AND CAPITAL SURPLUS  W
  2005


2006


2007Authorized shares


220,000,000



220,000,000



220,000,000Issued shares


82,276,711



81,193,711



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


73,614,296



72,667,459



72,584,677  F-45




---



##### Table of Contents



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





CapitalShares Issued


Common Stock


SurplusAt January 1, 2005


82,276,711


W
44,639


W
2,968,301Deferred tax effect of temporary difference related to
    conversion rights (note a)










(18,502
)Transfer of stock option from capital adjustment (note b)










1,533Equity in capital surplus changes of affiliates










3,508At December 31, 2005


82,276,711



44,639



2,954,840Retirement of treasury stock (note c)


(1,083,000
)






Conversion of convertible bonds (note d)










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










234Equity in capital surplus changes of affiliates










(1,014
)At December 31, 2006


81,193,711



44,639



2,950,327Conversion of convertible bonds (note f)










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










3,246Difference between the acquisition cost and the net book value
    incurred from the capital transaction between companies under
    common control (note h)










(9,696
)Equity in capital surplus changes of affiliates










(7,801
)At December 31, 2007


81,193,711


W
44,639


W
2,924,960    (note a)


The tax effect of temporary difference related to consideration
    for conversion rights was deducted directly from related
    components of stockholders equity, pursuant to adoption of
    SKAS No. 16 for the year ended December 31, 2005.(note b)


For the year ended December 31, 2005, the exercisable
    period for the stock options representing 17,800 shares, of
    which recognized compensation costs was
    W1,533 million, expired and the related
    stock options of W1,533 million in capital
    adjustments were transferred to capital surplus.(note c)


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 d)


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 (see Note 16). Related to this conversion
    transaction, the capital surplus amount decreased by
    W3,733 million.(note e)


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 234 million in capital adjustments were
    transferred to capital surplus.(note f)


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 Company by using its treasury
    stocks (see note 16). Related to this conversion
    transaction, the capital surplus amount decreased by
    W11,116 million.(note g)


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 h)


During the year ended December 31, 2007, SK Telecom
    acquired Ntreev Soft Co., Ltd.s common stock from iHQ,
    Inc. a subsidiary of the Company. The difference between the
    acquisition cost and purchased net book value of Ntreev Soft
    Co., Ltd. amounting to W9,696 million was
    offset against the Companys capital surplus.  F-46




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  15.
    RETAINED
    EARNINGS    2005


2006


2007Appropriated

W
5,470,701


W
6,679,235


W
7,335,037Unappropriated


1,796,948



1,168,199



1,579,933W
7,267,649


W
7,847,434


W
8,914,970     2005


2006


2007Legal reserve

W
22,320


W
22,320


W
22,320Reserve for improvement of financial structure


33,000



33,000



33,000Reserve for loss on disposal of treasury stock


477,182



477,182



255,984Reserve for research and manpower development


822,061



880,595



872,595Reserve for business expansion


4,116,138



5,266,138



6,151,138W
5,470,701


W
6,679,235


W
7,335,037   a.
    Legal
    Reserve    b.
    Reserve
    for Improvement of Financial Structure    c.
    Reserves
    for Loss on Disposal of Treasury Stock and Research and Manpower
    Development    d.
    Reserve
    for Business Expansion    16.
    TREASURY
    STOCK  W
 F-47




---



##### 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
  17.
    STOCK
    OPTIONS  W W W
  W
 F-48




---



##### Table of Contents



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


Recognized


Compensation


Stock Option inCompensation


Compensation Cost


Cost to be


Capital AdjustmentGrant Date

Cost


2005


2006


2007


Recognized


2005


2006


2007March 17, 2000
    (note a)

W
1,533


W



W



W



W



W



W



W
March 16, 2001
    (note b)


234



















234







March 8, 2002
    (note c)


3,246



180















3,246



3,246



W
5,013


W
180


W



W



W



W
3,480


W
3,246


W
    (note a)


For the year ended December 31, 2005, the exercisable
    period for stock options representing 17,800 shares, for
    which the Company had recognized compensation cost of
    W1,533 million, expired and the related
    stock options of W1,533 million in capital
    adjustments were transferred to capital surplus.(note b)


For the year ended December 31, 2006, the exercisable
    period for stock options representing 43,820 shares, for
    which the Company had recognized compensation cost of
    W234 million, expired and the stock
    options of W234 million in capital
    adjustments were transferred to capital surplus.(note c)


For the year ended December 31, 2007, the exercisable
    period for stock options representing 65,730 shares, for
    which the Company had recognized compensation cost of
    W3,246 million, expired and the stock
    options of W3,246 million in capital
    adjustments were transferred to capital surplus.   W W W W
  2005Pro forma net income (in millions of Korean won)

W
1,872,680Pro forma net income per common shares


25,439     18.
    INCOME
    TAXES    2005


2006


2007Currently

W
685,541


W
615,959


W
564,480Changes in net deferred tax liabilities


7,718



(43,933
)


121,681Income tax expenses

W
693,259


W
572,026


W
686,161  F-49




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2005


2006


2007Income taxes at statutory income tax rate of 25% in 2005, 2006
    and 2007

W
640,391



W
505,394



W
496,323Resident surtax payable


64,039




50,539




49,632Tax credit for investments, technology and human resource
    development and others


(100,160
)



(110,785
)



(112,235
)Special surtax for agriculture and fishery industries and other


18,838




20,183




18,370Goodwill amortization not deductible for tax purpose


37,023




38,447




35,382Undistributed earnings (unrecognized deficit) of subsidiaries


4,846




1,496




5,326Other permanent differences


11,332




24,717




9,181Increase (decrease) in valuation allowance


16,950




42,035




184,182Recorded income taxes

W
693,259



W
572,026



W
686,161Effective tax rate


27
.06
%


28
.30
%


34
.56
%  F-50




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2005


2006


2007Current :Allowance for doubtful accounts

W
39,334


W
21,701


W
17,289Write-off of doubtful accounts


9,239







Accrued interest income


(1,229
)


(1,605
)


(2,073
)Net operating loss carryforwards


17



1,121



5,406Tax credit carryforwards


89



19



Other


18,623



28,704



15,756Net deferred tax assets  current


66,073



49,940



36,378Non-Current :Depreciation


(47,472
)


(51,437
)


(42,671
)Loss on impairment of investment securities


32,959



33,269



41,105Equity in losses (gains) of affiliates, net


(10,244
)


3,968



(52,313
)Unrecognized deficit (undistributed earnings) of subsidiaries


13,732



34,005



86,497Tax free reserve for research and manpower development


(211,208
)


(211,215
)


(151,259
)Tax free reserve for loss on disposal of treasury stock


(130,372
)


(70,395
)


(70,396
)Loss on valuation of foreign currency swap


3,642



6,188



6,188Loss on valuation of interest swap






125



(871
)Loss on valuation of derivatives (accumulated other
    comprehensive income)


5,377



6,668



6,668Gain on conversion of convertible bond










(102,613
)Consideration for conversion right


(18,502
)


(17,086
)


(12,870
)Equity in capital adjustments of affiliates


(21,967
)


(34,077
)


7,879Unrealized loss(gain) on valuation of long-term investment
    securities (accumulated other comprehensive income)


15,966



(163,992
)


(617,020
)Net operating loss carryforwards


24,108



66,319



183,053Tax credit carryforwards






48



35,399Other


(875
)


8,801



28,864Total deferred tax liabilities


(344,856
)


(388,811
)


(654,360
)Valuation allowance for:Depreciation


(6,022
)


183



236Net operating loss carryforwards


(23,523
)


(60,142
)


(182,726
)Equity in losses of affiliates and unrecognized deficit of
    subsidiaries


(17,631
)


(73,082
)


(161,081
)Other


(7,629
)


(8,132
)


(39,541
)Net deferred tax liabilities  non-current

W
(399,661
)

W
(529,984
)

W
(1,037,472
)  F-51




---



##### Table of Contents



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


Tax CreditYear Ending December 31,

Carryforwards


Carryforwards2008

W
7,584


W
2009






202010


568



42011






2012


622



Total

W
8,774


W
24     2005


2006


2007Consideration for conversion right


(18,502
)

W
(17,086
)

W
(12,870
)Loss on disposal of treasury stock






(38,341
)


(36,339
)Stock option










(99
)Unrealized loss (gain) on valuation of long-term investment
    securities, net


15,966



(162,847
)


(616,996
)Equity in other comprehensive income of affiliates, net


(24,119
)


(41,403
)


(716
)Loss on valuation of currency swap


5,377



6,668



6,668Loss (gain) on valuation of interest rate swap






125



(871
)Foreign-based operations translation adjustment


2



(22
)


(32
)Retained Earnings










30Total


(21,276
)

W
(252,906
)

W
(661,225
)  F-52




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  19.
    COMPREHENSIVE
    INCOME    2005


2006


2007Profit and





Profit and





Profit andLoss Effect


Tax Effect


Loss Effect


Tax Effect


Loss Effect


Tax EffectNet income

W
1,868,307






W
1,449,552






W
1,562,265Other comprehensive income (loss):Unrealized gain on valuation of long-term investment securities,
    net


50,882



(179,973
)


471,321


W
(178,814
)


1,195,385


W
(454,149
)Equity in other comprehensive income change of affiliates, net


(73,008
)


(17,284
)


45,956



(17,282
)


(105,597
)


40,687Foreign-based operations translation adjustment


(2,020
)


2



(19,737
)


(24
)


4,162



(10
)Gain (loss) on valuation of currency swap, net


35,276



1,291



(2,311
)


1,291



4,671



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






125



(329
)


125



2,627



(996
)Sub-total


11,130


W
(195,839
)


494,900


W
(194,704
)


1,101,248


W
(414,468
)Comprehensive income

W
1,879,437






W
1,944,452






W
2,663,513Attributable to:Majority interests

W
1,884,108






W
1,946,391






W
2,750,124Minority interests


(4,671
)






(1,939
)






(86,611
)W
1,879,437






W
1,944,452






W
2,663,513   20.
    NET
    INCOME PER SHARE    Net
    income per share
  2005


2006


2007Net income attributable to the majority interests

W
1,872,978


W
1,451,491


W
1,648,876Weighted average number of common shares outstanding


73,614,296



73,305,026



72,650,909Net income per share

W
25,443


W
19,801


W
22,696  F-53




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##### Table of Contents



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


WeightedNumber of


Number of


NumberDate


Shares


Days


of SharesFor 2005 :At January 1, 2005






82,276,711



365/365



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






(8,662,415
)


365/365



(8,662,415
)Total






73,614,296







73,614,296For 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







72,650,909     (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
    during the year ended December 31, 2007, 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 per share
  2005


2006


2007Adjusted net income attributable to the majority interest

W
1,886,033


W
1,464,768


W
1,661,678Adjusted weighted average number of common shares outstanding


75,332,996



75,025,926



74,263,655Diluted net income per share

W
25,036


W
19,523


W
22,375  F-54




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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 Weighted


Per-shareNet Income


Number of Shares


Amount(In millions of





(In Korean won)Korean won)For 2005Basic net income per share

W
1,872,978



73,614,296


W
25,443Effect of stock option (note a)






Effect of convertible bonds (note b)


13,055



1,718,700Diluted net income per share

W
1,886,033



75,332,996


W
25,036For 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
22,375     (note a)

For the years ended December 31, 2005, 2006 and 2007, 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, 2005, 2006 and 2007,
    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.  F-55




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  21.
    DIVIDEND
    DISCLOSURE    Fiscal



Number of Shares





DividendYear

Dividend Type

Outstanding


Face Value


Ratio


Dividends2005

Cash dividends (interim)


73,614,296


W
500



200
%

W
73,614Cash dividends (year-end)


73,614,296


W
500



1,600
%


588,914Total













W
662,5282006

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
682,379     2005


2006


2007Dividends

W
662,528



W
582,386



W
682,379Net income attributable to the majority interest


1,872,978




1,451,491




1,648,876Dividends payout ratio


35
.37
%


40
.12
%


41
.38
%     2005


2006


2007Dividend per share

W
9,000



W
8,000



W
9,400Stock price at the year-end


181,000




222,500




249,000Dividends yield ratio


4
.97
%


3
.60
%


3
.78
%   22.
    RESTRICTED
    DEPOSITS  W W
  W
  W
 F-56




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##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  23.
    COMMITMENTS
    AND CONTINGENCIES  W W W
  W W
  W W
  W
      W
  W W
  W
     F-57




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##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    W
  24.
    INSURANCE    Asset

Risk

Book Value

CoverageInventories and










US$  59,115property and equipment


Fire and comprehensive liability



W3,859,361



W 8,234,085   25.
    TRANSACTIONS
    WITH AFFILIATED COMPANIES    Description

2005


2006


2007TransactionsSK Corporation :Purchases of property and equipment


1,302



2,158



Commissions paid and other expense


48,266



40,694



Commission income and other income


9,243



13,877



829SK Energy Co., Ltd.:Commissions paid and other expense










30,281Commission income and other income










17,250SK Engineering & Construction Co., Ltd. :Purchases of property and equipment


257,823



235,872



307,702Commissions paid and other expense


6,593



7,086



16,147Commission income and other income


2,580



2,385



2,908SK Networks Co., Ltd. :Purchases of property and equipment


10,020



9,249



39,415Commissions paid, leased line and other expense


432,967



490,437



710,228Sales of handsets and other income


279,197



11,897



15,754 F-58




---



##### Table of Contents



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

2005


2006


2007SK Telesys Co., Ltd. :Purchases of property and equipment


294,829



231,233



264,150Commissions paid and other expenses


7,410



6,567



13,027Commission income and other income


575



2,170



2,687SKC :Purchases of property and equipment


219,767







Commissions paid and other expenses


13,316



21



21Commission income and other income


32



1,155



1,135Innoace Co., Ltd. :Purchases of property and equipment


13,652



23,986



23,694Commissions paid and other expenses


2,109



7,447



9,839Commission income and other income


218



218



242SK C&C Co., Ltd. :Purchases of property and equipment


249,633



215,820



205,677Commissions paid and other expenses


322,856



287,647



251,401Commission income and other income


7,853



8,795



9,470TU Media Corp. (note a) :Purchases of property and equipment






573



Commissions paid and other expenses


1,950



1,798



Commission income and other income


22,381



57,866



AirCross Co., Ltd. (note a) :Purchases of property and equipment










Commissions paid and other expenses


13,062



19,494



Commission income and other income


165



616



Pantech Co., Ltd. :Purchases of property and equipment










Commissions paid and other expenses


737



400



Commission income and other income






16,605



Helio, Inc. & Helio, LLC (note a) :Commissions paid and other expenses


876



1,087



Commission income and other income


11,914



18,243



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


97



258



310Accounts payable


21,326



1,635



8,870Guarantee deposits received


942



942



1,135SK Networks Co., Ltd. :Accounts receivable  trade and other


1,787



780



2,182Guarantee deposits


113



113



113Accounts payable


22,237



71,160



71,311Guarantee deposits received


2,700



3,123



3,432SK Corporation :Accounts receivable  trade and other


1,643



5,058



775Guarantee deposits


37,703



291



Accounts payable


6,914



7,999



Guarantee deposits received


6,174



6,465



 F-59




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##### Table of Contents



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

2005


2006


2007SK Energy Co., Ltd.Accounts receivable  trade and other










2,959Guarantee deposits










134Accounts payable










4,404Guarantee deposits received










248SK Telesys Co., Ltd. :Accounts receivable  trade and other


3



34



31Accounts payable


65,819



51,663



30,205SKC :Accounts receivable  trade and other






121



71Guarantee deposits










Accounts payable










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










26Accounts payable


6,100



13,574



7,223Guarantee deposits received


2,138



2,291



2,291SK C&C Co., Ltd. :Accounts receivable  trade and other


91







411Accounts payable


174,884



88,056



135,297Guarantee deposits received


346



346



346TU Media Corp. (note a) :Accounts payable


5,299



886



Guarantee deposits received


3,016



3,016



AirCross Co., Ltd. (note a) :Accounts receivable  trade and other


3,497







Accounts payable


3,866



3,513



Guarantee deposits received


226



226



Pantech Co., Ltd. :Accounts payable






440



     (note a)

These companies were included in the consolidation from the year
    ended December 31, 2007, accordingly transactions and balances
    with the Company are eliminated.   26.
    COMPENSATION
    FOR THE KEY MANAGEMENT    For the Year Ended December 31, 2007SeverancePayee

Payroll


Indemnities


Total12 registered directors (including outside directors)

W
4,786


W
722


W
5,508   W
 F-60




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##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  27.
    PROVISION
    FOR POINT PROGRAM  W W W
    2005


2006


2007Beginning balance

W
61,596


W
52,172


W
52,593Present value discount (note a)


(7,415
)






Increase (provision)


7,265



10,757



15,137Decrease (used and reversal)


(9,274
)


(10,336
)


(40,062
)Ending Balance

W
52,172


W
52,593


W
27,668     (note a)

Effective January 1, 2005, pursuant to adoption of SKAS
    No. 17, provision for point program was recorded at present
    value, which had been recorded at nominal value through 2004.     Estimated Amountto be PaidExpected Usage for the Year Ended December 31,

in Nominal Value


Present Value(Note b)


(Note b)2008

W
12,203


W
11,4322009


8,117



7,1252010


5,443



4,4762011


3,676



2,8312012


2,500



1,804Ending balance

W
31,939


W
27,668     (note b)

The above expected year of the usage and the present value of
    the estimated amount to be paid are estimated based on
    historical usage experience.   28.
    DERIVATIVE
    INSTRUMENTS  a.  Currency
    Swap Contract to which the Cash Flow Hedge Accounting Is
    Applied
  W W W
 F-61




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##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  W W
  W W
  b.  Interest
    Rate Swap Contract to which the Cash Flow Hedge Accounting Is
    Applied
  W W W
  c.  Currency
    Swap Contract to which the Fair Value Hedge Accounting Is
    Applied
  W
  d.  Currency
    Swap Contract to which the Hedge Accounting Is Not
    Applied
  W W W
  W
 F-62




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##### Table of Contents



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


DesignatedHedged


Duration of

as Cash


as Fair


NotType

Hedged Item

Amount


Contract

Flow Hedge


Value Hedge


Designated


TotalNon-current assets:Fixed-to-fixed cross currency swap

U.S. dollar denominated bonds

US$
400,000


~

Jul. 20, 2007
    Jul. 20, 2017

W



W



W
7,316


W
7,316Floating-to-fixed cross currency interest rate swap

Japanese yen denominated bonds

JPY
12,500,000


~

Nov. 13, 2007
    Nov. 13, 2012


5,741











5,741Floating-to-fixed interest rate swap

Long-term floating rate discounted bill

W
200,000


~

Jun. 29, 2006
    Jun. 29, 2010


3,170











3,170Total assets











W
8,911


W



W
7,316


W
16,227Current liabilities:Fixed-to-fixed cross currency swap

U.S. dollar denominated China Unicom equity securities

HK$
10,940,900


~

Sep. 11, 2007
    Sep. 16, 2008

W



W
12,646


W



W
12,646Non-current liabilities:Fixed-to-fixed cross currency swap

U.S. dollar denominated bonds

US$
300,000


~

Mar. 23, 2004
    Apr. 1, 2011


85,239











85,239Fixed-to-fixed cross currency swap

U.S. dollar denominated convertible bond

US$
100,000


~

May 27, 2004
    May 27, 2009










23,125



23,125Floating-to-fixed cross currency interest rate swap

U.S. dollar denominated long-term borrowings

US$
100,000


~

Oct. 10, 2006
    Oct. 10, 2013


2,547











2,54787,786







23,125



110,911Total liabilities











W
87,786


W
12,646


W
23,125


W
123,557   29.
    MERGERS
    AND ACQUISITIONS  a.
    Acquisition
    of Loen Entertainment, Inc.(formerly Seoul Record,
    Inc.)      In Millions ofDescription

Korean WonFair value of net assets acquired

W
23,796Goodwill


4,078Acquisition cost

W
27,874   b.
    Merger
    with Etoos Group, Inc.   F-63




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##### Table of Contents



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

Korean WonFair value of acquired assets

W
10,196Fair value of assumed liabilities


(9,851
)Fair value of net assets

W
345Consideration for mergerFair value of delivered stock

W
11,586Incidental cost


1Total


11,587Goodwill

W
11,242   c.
    Merger
    with SM The Data Co., Ltd.  W
  d.
    Acquisition
    of Egloos Business from OnNet Co., Ltd and Etoos M Business from
    Netus  W W
    In Millions ofAccounts

Korean WonFair value of net assets acquired

W
29Goodwill


1,642Acquisition cost

W
1,671   e.
    Merger
    with Empas, Inc.     F-64




---



##### Table of Contents



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

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   30.
    CONSOLIDATED
    STATEMENTS OF CASH FLOWS      2005


2006


2007Conversion of convertible bonds

W



W
29,528


W
45,470Retirement of treasury stocks






209,077



Write-offs of accounts receivable


49,181



90,780



90,475Transfer from advanced payments to construction in progress










12,714Increase in assets due to merger






10,196



101,613Increase in liabilities due to merger






9,851



56,872Increase(Decrease) in assets due to the change in consolidated
    subsidiaries


(597,143
)


93,581



541,809Increase(Decrease) in liabilities due to the change in
    consolidated subsidiaries


(554,888
)


33,904



489,288     2005


2006


2007Cash and cash equivalents

W
378,426


W
485,972


W
885,988Government subsidy










(141
)W
378,426


W
485,972


W
885,847   31.
    NETWORK
    INTERCONNECTION CHARGES   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
  32.
    SUBSEQUENT
    EVENT  a.
    Acquiring
    Stock of hanarotelecom incorporated  W W
  b.
    Resolution
    of Capital Increase of TU Media Corp.  W
  c.
    Incorporation
    of SK Marketing & Company (tentative
    name)  W
  d.
    Resolution
    of disposal on the investment in equity securities of SK
    C&C    e.
    Plan
    of disposal on the investment in equity securities of
    HELIO   F-66




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  33.
    RECONCILIATION
    TO UNITED STATES GENERALLY ACCEPTED ACCOUNTING
    PRINCIPLES    a.
    Deferred
    Income Taxes  W
  W W
  b.
    Deferred
    Charges  W
  c.
    Leases  W
  d.
    Marketable
    Securities and Investments Securities   F-67




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  W
  e.
    Impairment
    of Investment Securities and Recoveries  W W W W W W
    W W W
  f.
    Comprehensive
    Income    g.
    Business
    Combinations and Intangible Assets     F-68




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  W
    W W W
  h.
    Determination
    of Acquisition Cost of Equity Interest in
    Subsidiary  W W W
  W
  i.
    Additional
    Equity Investment in Subsidiaries  W W W
 F-69




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  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    W W W
  m.
    Loans
    Receivable for Stock Issued to Employee   F-70




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  n.
    Convertible
    Bonds Payable  W W W
  W W
  o.
    Currency
    and Interest Rate Swap  W W W
  p.
    Foreign
    Currency Translation  W
  q.
    Sale
    of Stock by Equity Method Investee   F-71




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  W W W
  r.
    Subscription
    Payable  W
  s.
    Equity
    Instrument to be Received in Conjunction with Providing
    Services  W
  t.
    Consolidation
    of Variable Interest Entities      u.
    Remeasurement
    of Stock Option   F-72




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  v.
    Convertible
    Notes Receivable  available-for-sale available-for-sale W
  available-for-sale W available-for-sale
  w.
    Presentation
    of Minority Interest as a Component of Shareholders
    Equity    x.
    Scope
    of Consolidations  W
   F-73




---



##### Table of Contents



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


Total





NetAssets


Liabilities


Revenue


Income (Loss)IHQ, Inc.

W
69,216


W
12,860


W
41,395


W
3,330TU Media Corp.


350,042



344,537



113,310



(78,500
)YTN Media, Inc.


30,808



12,297



26,161



(111
)IMM Cinema Fund


19,928



7



1,866



(4,459
)Michigan Global Cinema Fund


9,742







1,070



(634
)   W
  y.
    Handset
    Subsidies to Long-time Mobile Subscribers    z.
    Classification
    of SK C&C Co., Ltd.  W W
  2005


2006


2007Current assets

W
470,428


W
400,994


W
663,791Non-Current assets


1,074,552



1,505,237



3,052,281Total

W
1,544,980


W
1,906,231


W
3,716,072Current liabilities

W
489,191


W
542,917


W
810,141Non-Current liabilities


511,209



483,934



904,821Stockholders equity


544,580



879,380



2,001,110Total

W
1,544,980


W
1,906,231


W
3,716,072   F-74




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  2005


2006


2007Operating revenue

W
1,002,667


W
1,107,910



1,160,946Operating expenses


(908,485
)


(994,556
)


(1,081,361
)Operating income


94,182



113,354



79,585Other income (expenses), net


(11,587
)


8,929



1,381,694Provision for income taxes


(20,902
)


(34,959
)


(405,709
)Net income

W
61,693


W
87,324


W
1,055,570  F-75




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended December 31,2005


2006


2007Net income based on Korean GAAP

W
1,868,307


W
1,449,552


W
1,562,265Adjustments :Net income attributed to Minority interests


4,671



1,939



86,611Deferred income tax adjustments due to difference in accounting
    principles


30,857







Deferred charges


(2,037
)


2,037



Capital leases


(695
)


(847
)


Intangible assets


(16,046
)


(260
)


(4,180
)Reversal of amortization of goodwill


137,389



128,327



145,772Capitalization of foreign exchange losses and interest expenses
    related to tangible assets


3,231



9,266



954Capitalization of interest expenses related to purchases of
    intangible assets


5,272



5,272



5,272Nonrefundable activation fees


(34, 681
)


(16,139
)


(50,325
)Loss on impairment of investment securities


3,065



(421
)


(2,238
)Loss on valuation of currency and interest rate swap


29,898



(4,056
)


8,295Convertible bonds payable


14,044



48,118



(19,340
)Foreign currency translation


(2,458
)






Sales of stock by the equity method investee


(8,637
)


7,440



(6,392
)Consolidation of variable interest entity


38



(38
)


Stock option compensation plan


49



(144
)


Convertible notes receivable






365,751



(412,383
)Reclassification of SK C&C investment










83,785Tax effect of the reconciling items


(4,717
)


(115,268
)


109,368FIN 48 effect










(1,320
)Net income based on U.S. GAAP

W
2,027,550


W
1,880,529


W
1,506,144Weighted average number of common shares outstanding


73,614,296



73,305,026



72,650,909Earnings per share based on U.S. GAAP:Basic earnings per share

W
27, 543


W
25,653


W
20,731Diluted earnings per share

W
27,089


W
25,236


W
20,390   F-76




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  December 31,2005


2006


2007Shareholders equity based on Korean GAAP

W
8,327,540


W
9,483,088


W
11,687,633Adjustments:Deferred charges


(2,037
)






Capital leases


847







Intangible assets


993,547



993,802



1,096,547Reversal of amortization of goodwill


547,681



676,008



821,780Capitalization of foreign exchange losses and interest expenses
    related to tangible assets


47,522



56,788



57,742Capitalization of interest expenses related to purchase of
    intangible assets


(58,388
)


(53,116
)


(47,844
)Nonrefundable activation fees


(309,903
)


(326,042
)


(376,367
)Loans issued to employees stock ownership association


(14,586
)


(7,526
)


(34,816
)Convertible bonds payable


(52,220
)


(1,347
)


(12,642
)Investment securities without readily determinable fair value










(21,015
)Consolidation of variable interest entity


228



1,396



932Reclassification of SK C&C investment










(433,213
)Minority interest in equity of consolidated affiliates


(108,927
)


(170,246
)


(253,383
)Tax effect of the reconciling items


101,130



85,674



226,877FIN 48 effect










(13,173
)Shareholders equity based on U.S. GAAP

W
9,472,434


W
10,738,479


W
12,699,058     Year Ended December 31,2005


2006


2007Balance, beginning of the year

W
8,236,997


W
9,472,434


W
10,738,479Net income for the year


2,027,550



1,880,529



1,506,144Accumulated effect of FIN 48 adoption through 2006










(11,853
)Dividends


(758,227
)


(662,628
)


(581,340
)Unrealized gains on valuation of securities,
    net of tax


23,042



206,457



937,006Equity in capital surplus, retained earnings and other
    comprehensive income of affiliates (note a)


(63,370
)


38,651



158,760Conversion of convertible bonds payable






23,624



2,010Treasury stock transactions






(209,078
)


(26,556
)Foreign-based operations translation adjustments


(1,792
)


(18,570
)


3,698Stock compensation plan


274







Decrease(Increase) in loans receivable for stock issued to
    employees investor association


7,960



7,060



(27,290
)Balance, end of the year

W
9,472,434


W
10,738,479


W
12,699,058     (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-77




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     December 31,2005


2006


2007Current assets :As reported

W
4,598,580


W
4,663,962


W
4,813,072U.S. GAAP adjustments : loans receivable for stock issued to employees
    investor association


(3,249
)


(2,208
)


(1,522
) tax effect of the reconciling items


31,381



39,241



46,979 consolidation of variable interest entity


(4,889
)


(8,809
)


(16,077
) scope of consolidation






(40,189
)


(150,617
)Current assets based on U.S. GAAP


4,621,823



4,651,997



4,691,835Non-current assets :As reported


10,106,192



11,576,006



14,235,863U.S. GAAP adjustments : loans receivable for stock issued to employees
    investor association


(11,337
)


(5,318
)


(33,294
) intangible assets


988,763



989,595



1,140,555 reverse of amortization of goodwill


547,681



677,371



828,960 nonrefundable activation fees


8,571



8,108



6,167 capital lease


847



(576
)


(576
) capitalization of foreign exchange losses and
    interest expense related to tangible assets


47,522



56,788



57,742 capitalization of interest expenses related to
    purchase of intangible assets


(58,388
)


(53,116
)


(47,844
) deferred charges


7,933



7,812



8,577 subscription payable


40,014







 equity instrument to be received in conjunction with
    providing services


(2,055
)






 consolidation of variable interest entity


53,626



54,731



54,890 convertible bonds payable






(1,133
)


281 Investment securities without readily determinable
    fair value










(21,015
) Reclassification of SK C&C investment










(433,213
) scope of consolidation






(32,735
)


(275,780
) Tax effect of the reconciling items










1,375 FIN 48 effect










374Non-current assets based on U.S. GAAP


11,729,369



13,277,533



15,523,062Total assets based on U.S. GAAP

W
16,351,192


W
17,929,530


W
20,214,897   F-78




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  December, 312005


2006


2007Current liabilities :As reported

W
2,863,373


W
3,208,416


W
3,016,874U.S. GAAP adjustments : nonrefundable activation fees


114,111



142,697



170,761 subscription payable


40,014







 equity instrument to be received in conjunction with
    providing services


(525
)






 consolidation of variable interest entity


17,671



32,078



38,773 scope of consolidation






(17,389
)


(285,677
)Current liabilities based on U.S. GAAP


3,034,644



3,365,802



2,940,731Non-current liabilities :As reported


3,513,859



3,548,464



4,344,428U.S. GAAP adjustments : deferred charges


9,970



7,812



8,577 nonrefundable activation fees


204,363



191,453



211,773 tax effect of the reconciling items


(74,532
)


(51,216
)


(183,709
) convertible bonds payable


52,220



214



12,923 equity instrument to be received in conjunction with
    providing services


(1,530
)






 consolidation of variable interest entity


631



227



296 scope of consolidation






(19,563
)


(73,015
) FIN 48 effect










13,950Non-current liabilities based on U.S. GAAP


3,704,981



3,677,391



4,335,223Total liabilities based on U.S. GAAP

W
6,739,625


W
7,043,193


W
7,275,954Minority interests :As reported

W
108,927


W
170,246


W
253,383U.S. GAAP adjustments : consolidation of variable interest entity


30,206



12,221



(1,188
) reversal of amortization of goodwill






1,363



7,180 intangible assets










47,604 scope of consolidation






(35,972
)


(67,094
)Total minority interests based on U.S. GAAP

W
139,133


W
147,858


W
239,885  F-79




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2005


2006


2007Cash flows from operating activities based on Korean GAAP

W
3,407,142


W
3,589,825


W
3,710,704Adjustments :Trading security cash flows


(122,710
)


80,061



28,696Consolidation of variable interest entity


12,444



(48,721
)


35,777Scope of consolidation






(6,384
)


11,363Pre-acquisition cash flows of subsidiaries










(501,788
)Cash flows from operating activities based on U.S. GAAP

W
3,296,876


W
3,614,781


W
3,284,752Cash flows from investing activities based on Korean GAAP

W
(1,938,187
)

W
(2,535,153
)

W
(2,399,047
)Adjustments :Trading security cash flows


122,710



(80,061
)


(28,696
)Consolidation of variable interest entity


(1,004
)


37,611



(39,389
)Scope of consolidation






17,035



15,559Pre-acquisition cash flows of subsidiaries










15,880Cash flows from investing activities based on U.S. GAAP

W
(1,816,481
)

W
(2,560,568
)

W
(2,435,693
)Cash flows from financing activities based on Korean GAAP

W
(1,429,038
)

W
(952,377
)

W
(856,107
)Adjustments :Consolidation of variable interest entity


(10,243
)


17,716



5,016Scope of consolidation






(5,946
)


(2,475
)Pre-acquisition cash flows of subsidiaries










222,161Cash flows from financing activities based on U.S. GAAP

W
(1,439,281
)

W
(940,607
)

W
(631,405
)The effect of exchange rate changes on cash and cash equivalents
    held in foreign currencies based on Korean GAAP

W
(3,036
)

W
(9,317
)

W
2,783Adjustments :Consolidation of variable interest entity






(5,302
)


37Pre-acquisition cash flows of subsidiaries










(1,657
)The effect of exchange rate changes on cash and cash equivalents
    held in foreign currencies based on U.S. GAAP

W
(3,036
)

W
(14,619
)

W
1,163Net increase (decrease) in cash and cash equivalents due to
    changes in consolidated subsidiaries based on Korean GAAP

W
(29,085
)

W
14,568


W
154,227 F-80




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  2005


2006


2007Adjustments :Scope of consolidation






(14,246
)


(81,218
)Pre-acquisition cash flows of subsidiaries










2,271Net increase (decrease) in cash and cash equivalents due to
    changes in consolidated subsidiaries based on U.S. GAAP

W
(29,085
)

W
322


W
75,280Pre-acquisition cash flows of subsidiaries based on Korean GAAP










(263,133
)Adjustments:Pre-acquisition cash flows of subsidiaries










263,133Pre-acquisition cash flows of subsidiaries based U.S. GAAP










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










50,448Adjustments










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










50,448Cash and cash equivalents at beginning of the year based on
    Korean GAAP

W
370,630


W
378,426


W
485,972Adjustments :Consolidation of variable interest entity






1,197



2,501Scope of consolidation










(9,541
)Cash and cash equivalents at beginning of the year based on U.S.
    GAAP

W
370,630


W
379,623


W
478,932Cash and cash equivalents at end of the year based on Korean GAAP

W
378,426


W
485,972


W
885,847Adjustments :Consolidation of variable interest entity


1,197



2,501



3,942Scope of consolidation






(9,541
)


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

W
379,623


W
478,932


W
823,477   34.
    ADDITIONAL
    DISCLOSURES REQUIRED BY U.S. GAAP  a.
    Income
    Taxes    Year Ended December 31,2005


2006


2007Currently payable

W
685,541


W
615,959


W
564,480Deferred


(18,422
)


70,871



12,456W
667,119


W
686,830


W
576,936  F-81




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended December 31,2005


2006


2007Income taxes at statutory income tax rate of 25% in 2005, 2006
    and 2007

W
670,776



W
641,840



W
507,200Resident surtax payable


67,078




64,184




50,720Tax credit for investments, technology, human resource
    development and others


(100,160
)



(110,785
)



(112,235
)Special surtax for agriculture and fishery industries
    and other


18,850




20,183




18,370Undistributed earnings of subsidiaries


4,846




1,777




5,326Other permanent differences


19,637




27,602




10,670Change in valuation allowance


(13,908
)



42,029




96,885Recorded income taxes

W
667,119



W
686,830



W
576,936Effective tax rate


24
.86
%


26
.75
%


28
.44
%  F-82




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,2005


2006


2007Current :Allowance for doubtful accounts

W
39,334


W
21,251


W
16,391Write-off of doubtful accounts


9,239







Accrued interest income


(1,229
)


(1,544
)


(1,971
)Net operating loss carryforwards


17



1,121



2,081Tax credit carryforwards


89



19



Accrued expenses and other


50,004



68,264



66,85797,454



89,111



83,358Non-current :Depreciation


(58,745
)


(64,915
)


(56,359
)Loss on impairment of investment securities


32,959



33,018



46,818Equity in losses (earnings) of affiliates


(7,471
)


(28,232
)


(121,855
)Undistributed deficit of subsidiaries


13,732



(17,179
)


(23,464
)Tax free reserve for technology development


(211,208
)


(211,215
)


(151,259
)Tax free reserve for loss on disposal of treasury stock


(130,372
)


(70,396
)


(70,396
)Unrealized gain (loss) on valuation of long-term investment
    securities (accumulated other comprehensive income)


15,996



(163,992
)


(523,761
)Tax credit carryforwards






24



24Net operating loss carryforwards


24,108



6,178



327Deferred charges and other


(4,129
)


37,147



34,617(325,130
)


(479,562
)


(865,308
)Total deferred tax liabilities

W
(227,676
)

W
(390,451
)

W
(781,950
)      F-83




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      AmountBalance at January 1, 2007

W
9,565Gross increases for tax position of prior years


501Gross decreases for tax position of prior years


(15
)Gross decreases for tax position of current year


(62
)Balance at December 31, 2007

W
9,989            F-84




---



##### 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    Gross


GrossCost


Unrealized


Unrealized


Impairment


Fair(Amortized Cost)


Gains


Losses


Losses


ValueAt December 31, 2005 :Available-for-saleEquity securities

W
465,244


W
173,960


W
(9,768
)

W
(60,838
)

W
568,598Debt securities


307,375







(217
)


(10,885
)


296,273Held-to-maturity Securities


115















115W
772,734


W
173,960


W
(9,985
)

W
(71,723
)

W
864,986At December 31, 2006 :Available-for-saleEquity securities

W
469,754


W
462,521


W



W
(62,614
)

W
869,661Debt securities


1,083,914



33,903



(46,107
)


(10,656
)


1,061,054Held-to-maturity Securities


134















134W
1,553,802


W
496,424


W
(46,107
)

W
(73,270
)

W
1,930,849At December 31, 2007 :Available-for-saleEquity securities

W
1,805,795


W
1,758,674


W
(683
)

W
(63,264
)

W
3,500,522Debt securities


470,280



9,293



(439
)


(10,656
)


468,478Held-to-maturity Securities


94















94W
2,276,169


W
1,767,967


W
(1,122
)

W
(73,920
)

W
3,969,094   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
    Trading
    Securities and Long-term Investment Securities
   F-85




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    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
      2005


2006


2007Carrying


Fair


Carrying


Fair


Carrying


FairAmount


Value


Amount


Value


Amount


Value(Note a)





(Note a)





(Note a)Financial assets:Cash and cash equivalents and short-term financial instruments

W
486,215


W
486,215


W
576,017


W
576,017


W
956,441


W
956,441Trading securities


777,472



777,472



665,312



665,312



635,434



635,434Accounts receivable (trade and other)


3,038,936



3,038,936



3,065,481



3,065,481



2,642,195



2,642,195Short-term loans


62,290



62,290



60,440



60,440



74,603



74,603Investment securities:Listed equity and debts


864,986



864,986



1,930,849



1,930,849



3,969,094



3,969,094Non - listed equity


353,168



N/A



141,138



N/A



127,718



N/ALong-term bank deposits


1,479



1,479



10,430



10,430



15,512



15,512Long-term loans


7,093



5,320



13,250



9,938



45,524



34,143W
5,591,639






W
6,462,917






W
8,466,521Financial liabilities:Accounts payable

W
1,094,855


W
1,094,855


W
1,224,536


W
1,224,536


W
1,241,935


W
1,241,935Short-term borrowings


4,614



4,614



63,612



63,612



11,737



11,737Bonds payable, long-term borrowings, convertible bonds,
    long-term payables  other and obligation under capital
    leases, including current portion


3,763,135



3,825,813



3,595,880



3,667,748



3,460,939



3,508,681W
4,862,604






W
4,884,028






W
4,714,611    (note a)
    These carrying amounts represent the amounts determined under
    U.S. GAAP. F-86




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   d.
    Comprehensive
    Income    2005


2006


2007Net income

W
2,027,550


W
1,880,529


W
1,506,414Other comprehensive income :Available-for-sale securitiesUnrealized gain on investment securities


34,915



284,359



1,914,596Less impact of realized losses(gains)


(3,065
)


446



(557,346
)Tax effect


(8,808
)


(78,348
)


(420,244
)Net change from available-for-sale securities


23,042



206,457



937,006Foreign-based operations translation adjustments


(1,792
)


(18,570
)


3,698Total other comprehensive income


21,250



187,887



940,704Comprehensive income

W
2,048,800


W
2,068,416


W
2,447,118   e.
    Goodwill
    and other intangible assets    Goodwill
    2005


2006


2007Beginning of period

W
3,408,989


W
3,418,212


W
3,419,114Goodwill increase due to acquisition and subsidiary change
    during the period


9,223



13,426



180,145Goodwill impairment losses






(12,524
)


Goodwill disposed of during the period










(124
)Ending of period

W
3,418,212


W
3,419,114


W
3,599,135  F-87




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Other
    Intangible Assets
    December 31, 2005


December 31, 2006


December 31, 2007Accumulated





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
(188,193
)

W
1,188,547


W
(278,521
)

W
1,188,547


W
(368,849
)Customer lists (4 years)


99,783



(99,783
)


99,783



(99,783
)


106,783



(99,783
)Software purchased (5 years)


496,373



(215,529
)


883,004



(310,184
)


1,083,552



(478,849
)Software development cost (5 years)


230,439



(164,448
)


242,164



(196,510
)


240,629



(223,508
)Other (2 to 20 years)


309,353



(75,528
)


308,747



(98,035
)


455,910



(134,349
)Total

W
2,324,495


W
(743,481
)

W
2,722,245


W
(983,033
)

W
3,075,421


W
(1,305,338
)   W W W W W W W W
  f.
    Condensed
    Consolidated Income Statements under U.S. GAAP    2005


2006


2007Operating revenue:Wireless services

W
9,148,363


W
9,025,209


W
9,531,488Interconnection


898,621



1,033,390



1,062,195Digital handset sales


294,557







51,714Other


359,911



483,203



566,989Total operating revenue


10,701,452



10,541,802



11,212,386Total operating expenses


(7,847,705
)


(7,720,028
)


(9,144,306
)Operating income


2,853,747



2,821,774



2,068,080Other income (expenses), net


(125,898
)


(135,726
)


(197,428
)Income before income taxes and appropriate item below


2,727,849



2,686,048



1,870,652Provision for income taxes


(665,209
)


(673,330
)


(483,963
)Minority interests in losses of consolidated subsidiaries


11,109



21,752



54,281Equity in earnings of unconsolidated businesses


(46,199
)


(153,941
)


65,174Net income

W
2,027,550


W
1,880,529


W
1,506,144  F-88




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##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  g.
    Segment    h.
    Supplemental
    Information relating to Cash Flows    2005


2006


2007Cash paid for interest (net of amounts capitalized)

W
203,259


W
226,442


W
169,311Cash paid for income taxes


588,296



660,188



591,672   i.
    Accrued
    Severance Indemnities    Year Ending December 31,2008

W
3,3532009


6532010


1,4832011


1,0262012


3,9632013 ~ 2017


28,907Total

W
39,385     j.
    New
    Accounting Pronouncements   F-89




---



##### Table of Contents



SK
    TELECOM CO., LTD. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  No. 157-1 No. 157-2 FSP 157-1 FSP 157-2
        14-1,
 F-90