All references to “Korea” contained in this report shall mean The Republic of Korea. All references to the “Government” shall mean the government of The Republic of Korea. All references to “we”, “us”, “our” or the “Company” shall mean SK Telecom Co., Ltd. and its consolidated subsidiaries. References to “SK Telecom” shall mean SK Telecom Co., Ltd., but shall not include its consolidated subsidiaries. All references to “U.S.” shall mean the United States of America. Unless otherwise indicated, from 2001 onwards, all references to our number of subscribers shall include subscribers attributable to Shinsegi Telecomm, Inc.’s subscribers from April 1, 2000. (“Shinsegi”).

      All references to “KHz” contained in this report shall mean kilohertz, a unit of frequency denoting one thousand cycles per second, used to measure band and bandwidth. All references to “MHz” shall mean

      In this report, we refer to third generation, or “3G”, technology and “3.5G” technology. Second generation, or 2G, technology was designed primarily with voice communications in mind. On the other hand, 3G and 3.5G technologies are designed to transfer both voice data and non-voice, or multimedia, data, generally at faster transmission speeds than was previously possible.

All references to “Won”, “(Won)” or “W”“W” in this report are to the currency of Korea, all references to “Dollars”, “$” or “US$” are to the currency of the United States of America and all references to “Yen” or “¥” are to the currency of Japan.

      Unless otherwise indicated, all financial information in this report is presented in accordance with Korean generally accepted accounting principles (“Korean GAAP”).

      Unless otherwise indicated, translations of Won amounts into Dollars in this report were made 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. Unless otherwise stated, the translations of Won into Dollars were made at the noon buying rate in effect on December 31, 2004,2005, which was Won 1,035.11,010.0 to US$1.00. On December 31, 2003,June 26, 2006, the noon buying rate was Won 1,192.0 to US$1.00. On May 25, 2005, the noon buying rate was Won 1,000.0959.2 to US$1.00. See “Item 3. Key Information3A. Selected Financial Data — Exchange Rates”.

      This report contains “forward-looking statements”, as defined in Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, that are based on our current expectations, assumptions, estimates and projections about our company and our industry. The forward-looking statements are subject to various risks and uncertainties. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “anticipate”, “believe”, “considering”, “depends”, “estimate”, “expect”, “intend”, “plan”, “planning”, “planned”, “project” and similar expressions, or that certain events, actions or results “will”, “may”, “might”, “should” or “could” occur, be taken or be achieved.

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

      We caution you that reliance on any forward-looking statement involves risks and uncertainties, and that although we believe that the assumptions on which our forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and, as a result, the forward-looking statements based on those assumptions could be incorrect. Risks and uncertainties associated with our business, include but are not limited to, risks related to changes in the regulatory environment; technology changes; potential litigation and governmental actions; changes in the competitive environment; political changes; foreign exchange currency risks; foreign ownership limitations; credit risks and other risks and uncertainties that are more fully described under the heading “Key“Item 3. Key Information — Risk Factors” beginning on page 12 of this report, and elsewhere in this report. In light of these and other uncertainties, you should not conclude that we will necessarily achieve any plans and objectives or

     Not applicable.

     Not applicable.

      You should read the selected consolidated financial and operating data below in conjunction with the consolidated financial statements and the related notes included elsewhere in this report. The selected consolidated financial data for the five years ended December 31, 20042005 are derived from our audited consolidated financial statements and related notes.notes thereto. Information as of and for the yearsyear ended December 31, 2000 and 2001 includes information as of and for the nine months ended December 31, 2000 and the year ended December 31, 2001 respectively, for Shinsegi Telecomm, Inc. unless otherwise specified. Shinsegi Telecomm, Inc. was merged into SK Telecom in January 2002.

      Our consolidated financial statements are prepared in accordance with Korean generally accepted accounting principles, or Korean GAAP, which differ in certain respects from United States generally accepted accounting principles, or U.S. GAAP. For more detailed information you should refer to notes 30 and 31 of the notes to our audited consolidated financial statements included in this annual report.

      The following table sets forth, for the periods and dates indicated, certain information concerning 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. We make no representation that the Won or Dollar amounts we refer to in this report could have been or could be converted into Dollars or Won, as the case may be, at any particular rate or at all.

      On May 25, 2005,June 26, 2006, the noon buying rate was Won 1,000959.2 to US$1.00.

     An investment in our American Depositary Shares, or ADSs,Not applicable

      We face substantial competition in the wireless telecommunications sector in Korea. We expect competition to intensify as a result of consolidation of market leaders and the development of new technologies, products and services. ContinuedWe expect that such trends will continue to put downward pressure on the prevailing tariffs we can charge our subscribers. Also, continued competition from the other wireless and fixed-line service providers has resulted in, and may continue to result in, a substantial level of deactivations among our subscribers. Subscriber deactivations, or “churn”,churn, may significantly harm our business and results of operations. In addition, increased competition may cause our marketing expenses to increase as a percentage of sales, reflecting higher advertising expenses and other costs of new marketing activities, which may need to be introduced to attract and retain subscribers.

      Prior to April 1996, we were the only wireless telecommunications service provider in Korea. Since then, several new providers have entered the market, offering wireless voice and data services that compete directly with our own. Together, these providers had a market share of approximately 48.9%49.1%, in terms of numbers of wireless service subscribers, as of April 30,December 31, 2005. Furthermore, in 2001, the Government awarded to three companies licenses to provide high-speed third generation, or 3G, wireless telecommunications services. In Korea, this 3G license is also known as the “IMT-2000” license. IMT-2000 is the global standard for 3G wireless communications, as defined by the International Telecommunication Union, an organization established to standardize and regulate international radio and telecommunications. One of these licenses was awarded to SK Telecom’s former subsidiary, SK IMT Co., Ltd., which was merged into SK Telecom on May 1, 2003, and the other two licenses were awarded to consortia led by or associated with KT Corporation, (formerly known as Korea Telecom Corp.), Korea’s principal fixed-line operator and the parent of KT Freetel Co., Ltd.,KTF, one of our principal wireless competitors, and to LG Telecom, Ltd., or LGT. In addition, our wireless voice businesses compete with Korea’s fixed-line operators, and our wireless data andWireless Internet businesses compete with providers of fixed-line data and Internet services.

      Beginning in 2000, there has been considerable consolidation in the wireless telecommunications industry resulting in the emergence of stronger competitors. In 2000, KT Corporation acquired a 47.9% interest in Hansol M.Com (formerly Hansol PCS Co., Ltd.), which was the fifth largest wireless operator in terms of numbers of wireless service subscribers at such time. Hansol M.Com subsequently changed its name to KT M.Com and

      We expect competition to intensify as a result of such consolidation and as a result of the rapid development of new technologies, products and services. Our ability to compete successfully will depend on our ability to anticipate and respond to various competitive factors affecting the industry, including new services that may be introduced, changes in consumer preferences, economic conditions and discount pricing strategies by competitors. Future business combinations and alliances in the telecommunications industry may create significant new competitors and could harm our business and results of operations.

      SignificantThe telecommunications industry has been characterized by continuous improvement and advances in technology are occurring that may affect our business, including the roll-out by usand this trend is expected to continue. For example, we and our competitors ofhave introduced new network technology upgrades from our basic CDMA network to a more advanced high-speed wireless telecommunications networksnetwork based on CDMA 1xRTT and CDMA 1xEV/ DO technology and othertechnology. Korean wireless telecommunications companies, including us, have also implemented newer technologies such as W-CDMAwide-band code division access, or WCDMA, which is the 3G technology implemented by us, and cdma2000, bothCDMA2000, which is the 3G technology implemented by certain of our competitors, all of which are commonly referred to as third generation, or 3G wireless technology. W-CDMA servicetechnology and is also known as IMT-2000 service in Korea. Such networks areOur new WCDMA network is expected to support data transmission services with more advanced features andat significantly higher data transmission ratesspeeds than our principal data network, which uses a technology calledbasic CDMA, 1xRTT.CDMA 1xRTT and CDMA 1xEV/ DO networks.

      We commenced provision of our W-CDMAWCDMA services on a limited basis in Seoul at the end of 2003.2003 and continued to expand and improve our WCDMA services in the Seoul metropolitan area in 2004. In 2005, we completed commercial development of HSDPA technology, also known as 3.5G technology. HSDPA is a new mobile telephony protocol that represents an evolution of the WCDMA standard and, among others, supports higher data capacity and allows faster data transmissions than previous WCDMA-based protocols. HSDPA upgrades to our existing WCDMA network do not require hardware upgrades and may be accomplished through software upgrades at virtually no cost. By May 2006, we had expanded HSDPA service to 25 cities, including Busan and Incheon. We are continuing expansion of an upgraded, HSDPA-ready version of our WCDMA network to other metropolitan areas of Korea. By the end of 2006, we expect that HSDPA service will be available in 84 cities nationwide. The successful introduction and operation of a 3G or 3.5G network by a competitor could materially and adversely affect our existing wireless businesses as well as the returns on future investments we may make in aour 3G network or our

      In March 2005, we obtained a license from the MIC to provide wireless broadband internet, or WiBro, services, which will offer high-speed and large packetlarge-packet data services at a competitive priceprices and serve as a complementary solution to the existing mobilecomplement our other wireless communication services, such as W-CDMA. Our decisionHSDPA. WiBro service enables wireless broadband Internet access to make further investmentsportable computers, mobile phones and other portable devices. We conducted pilot testing of WiBro

      W-CDMAHSDPA, an evolution of our WCDMA standard, is a high-speed wireless communication technology that we believe will allow us to offer even more sophisticated wireless data transmission services at faster speeds than previously available on our current CDMA 1xRTTWCDMA network. Under the terms of our W-CDMAWCDMA license received in 2001 from the MIC, we were required to commence provision of W-CDMAWCDMA services by the end of 2003. We commenced provision of our IMT-2000WCDMA services based on our W-CDMA network on a limited basis in Seoul at the end of 2003. Although2003 and continued to improve our WCDMA services in the Seoul metropolitan area in 2004.

      We first deployed HSDPA technology in 2006. HSDPA is a new mobile telephony protocol that represents an evolution of the WCDMA standard and, among others, supports higher data capacity and allows faster data transmissions than previous WCDMA-based protocols. HSDPA upgrades to our existing WCDMA network do not require hardware upgrades and may be accomplished through software upgrades at virtually no cost. We are continuing expansion of an upgraded, HSDPA-ready version of our WCDMA network in other metropolitan areas of Korea. By May 2006, we had expanded HSDPA service to 25 cities, including Busan and Incheon. By the end of 2006, we expect HSDPA service to be available in 84 cities nationwide. In March 2005, we developed and launched in March 2005 dual band/dual mode handsets, one of the key factorswhich can be used in both CDMA and WCDMA networks, to offer seamless nationwide 3G service, an important factor for a nationwide deployment of W-CDMA,HSDPA. However, the actual scope and timing of the full nationwide roll-out of our W-CDMA networkHSDPA service will depend on various other several factors, including the availability of networkrequired equipment, our ability to overcome technical problems currently affecting W-CDMAHSDPA performance, regulatory decisions, our assessment of the market opportunities for W-CDMAHSDPA technology-based services and the competitive landscape in the Korean wireless market. We expect to provide W-CDMA services in the Seoul metropolitan area and other local metropolitan areas of Korea by the end of 2005.

      We cannot assure you that we will be able to construct a nationwide W-CDMAWCDMA network or provide W-CDMAHSDPA services in a timely, effective and cost efficientcost-efficient manner. Several companies in other countries have announced delays in the roll-out of their 3G and 3.5G services as a result of technological problems and difficulties with software, equipment and handset supply. We arebelieve that we may be vulnerable to similar problems, and if such problems are not resolved effectively as they arise, our financial condition or results of operations could be adversely affected. In addition, the MIC is empowered to take various measures against us ranging from the suspension of our business to the revocation of our W-CDMAWCDMA license if we fail to comply with the terms of our W-CDMAWCDMA license. We believe that we are currently in compliance with all material terms of the license. Also, even if we complete our WCDMA network on a timely basis, we cannot assure you that there will be sufficient demand for our W-CDMAHSDPA services, as a result of competition or otherwise, to permit us to recoup or profit from our investment in the W-CDMAWCDMA license and network. In addition, demand for our W-CDMAHSDPA services will depend in part on the availability of attractive content and services. We cannot assure you that such content and services will become available in a timely manner, or at all. If W-CDMA services are not widely implemented, we may have to record an impairment loss on the license fee that we paid and our equipment relating to W-CDMA.

      We expect that any future expansionthe build-out of our W-CDMAWCDMA network may require external funding,financing, and we cannot assure you that such fundingfinancing will be available at a cost acceptable to us, or at all. Although we do not foresee that the funding of such expansion of our W-CDMA will necessarily require significant amount of capital and expenditure for an extended period of time due to the significant on-going advances in technology relating to the construction of W-CDMA network in general and due to increasing deployment of W-CDMA technology in the wireless communication market worldwide,Also, we cannot assure you that we will be able to successfully integrate W-CDMAWCDMA services into our existing businesses in a timely or cost-effective manner or that the W-CDMAWCDMA business will not adversely affect our currentexisting wireless businesses, including the services currently provided on our networks and new services. The MIC also awarded the IMT-2000 license to provide 3G services based on a technology different from ours to LG Telecom for a fee lower than the fee we are required to pay for our IMT-2000 license and on terms generally more favorable than the terms of our license, which may give LGexisting networks.

      As a part of our growth strategy, we plan to selectively seek business opportunities abroad. For example, in March 2005, we established a joint venture with EarthLink, a major Internet service provider in the United States, to provide voice and data services as a mobile virtual network operator in the United States. We also have ongoing projects in Vietnam and Mongolia. In addition, in February 2005, we established a joint venture company with China Unicom, China’s second largest mobile operator, called UNISK Information Technology Co., Ltd., to market and offer wireless Internet service in China. In addition, in June 2006, our board of directors approved plans to subscribe for up to US$1 billion of convertible bonds issued by China Unicom, convertible into 899,745,075 common shares of China Unicom, which represents an approximate 6.67% equity interest in that company. We expect the subscription to be consummated in July 2006. We will continue to seek other opportunities to expand our business abroad, particularly in Asia, as circumstances present themselves.

      In addition, we believe that we must continue to make significant investments to build, develop and broaden our existing businesses, including by developing and providingimproving our wireless data, multimedia, mobile commerce and Internet services. We will need to respond to market and technological changes and the development of services which we may have little or no experience in providing. We may also make investments in wireless telecommunications and other businesses outside of Korea. Entering these new businesses and regions, in which we have limited experience, may require us to make substantial investments and no assurance can be given that we will be successful in our efforts.

      According to data published by the MIC and our population estimates based on historical data published by the National Statistical Office of Korea, the penetration rate for the Korean wireless telecommunications service industry as of April 30,December 31, 2005 was approximately 77.1%79.4%, which is high compared to many industrialized countries. InIt is unlikely that the past,penetration rates for wireless telecommunications service providers provided handsetswill grow at below retail prices to attract new subscribers, offsetting a significant portion of the cost of handsets. The rapid growth in penetration rate in recent years can, at least in part, be attributed to such subsidies on handsets given to new subscribers. The MIC prohibited all wireless telecommunications service providers, subject to certain exceptions stipulatedsame pace as it has in the Telecommunications Business Act, from providing anypast given such handset subsidies beginning June 1, 2000. In March 2002, the MIC concluded that certain incentive payments made to wireless handset dealers by us and other wireless network service providers were being passed on to purchasers of wireless handsets and therefore constituted improper handset subsidies. On April 8, 2002, we, KT Freetel and LG Telecom were fined an aggregate of Won 20.0 billion by the MIC in respect of these incentive payments. We were assessed and have paid in full a fine of Won 10.0 billion. On November 15, 2002, we received an order from the MIC prohibiting us from signing up new subscribers for 30 days (from November 21, 2002 through December 20, 2002) for violating MIC’s handset subsidy regulation. KT Freetel and LG Telecom were also prohibited from signing up new subscribers for 20 days. In February 2004, the MIC imposed upon us a fine of Won 21.7 billion with respect to another incentive payments that were deemed by the MIC to constitute improper handset subsidies and thereby disrupt fair competition. We paid the fine in March 2004. In February 2004, KT Freetel and KT Corporation were also fined Won 7.5 billion and Won 4.1 billion, respectively, in respect of such incentive payments.

      One of the principal limitations on a wireless network’s subscriber capacity is the amount of spectrum available for use by the system. SK Telecom’s networksWe have been allocated 2 x 25 MhzMHz of spectrum in the 800 MhzMHz band.

      The growth of our wireless data businesses has increased our utilization of our bandwidth, since wireless data applications can beare generally more bandwidth-intensive than voice services. This trend has been offset in part by the implementation of our CDMA 1xRTT1xEV/ DO network and, more recently, our WCDMA network, which usesuse bandwidth more efficiently for voice and data traffic than our basic CDMA networks. If the current upward trends intrend of increased data transmission use by our subscribers continue,continues, our bandwidth capacity requirements could increase further.are likely to increase. Growth of our wireless business will depend in part upon our ability to manage effectively our bandwidth capacity and to implement efficiently and in a timely and efficientlymanner new bandwidth-efficient technologies if they become available. We cannot assure you that bandwidth constraints will not adversely affect the growth of our wireless businesses.business.

      As a network-based wireless telecommunications provider, we have had in the past, and expect to continue to have, significant capital expenditure requirements, as we continue to build-out and maintain our networks. We estimate that we will spend approximately Won 1.6 trillion for capital expenditures in 20052006 for a range of projects, including expansion and improvement of our wireless networks, investments in our Internet-related businesses and expansion of our W-CDMAWCDMA network. We expectcurrently plan to plan our future capital expenditures after we have reviewed the progress of the introduction and marketabilityinvest Won 570 billion on expansion of our W-CDMAWCDMA network and HSDPA service which we commenced on a limited basisand Won 170 billion to build and expand our WiBro network in Seoul at the end of 2003.2006. For a more detailed discussion of our capital expenditure plans and a discussion of other factors which may affect our future capital expenditures, in the future, see “Operating and Financial Review and Prospects —“Item 5B. Liquidity and Capital, Resources”. At December 31, 2004,2005, we had approximately Won 500.0814.4 billion in contractual payment obligations due in 20052006 of which almost all involve repayment of debt obligations. See “Operating and Financial Review and Prospects —“Item 5F. Tabular Disclosure of Contractual Obligation & Commitments”Obligations”.

      We have not arranged firm financing for all of our current or future capital expenditure plans.plans and contractual payment obligations. We have in the past obtained funds for our proposed capital investmentsexpenditure and cash payment obligations from various sources, including our cash flow from operations as well as from financings, primarily debt and equity financing transactions. Wefinancings. Although we believe that we have sufficient capital resources including our ability to sell debtfrom operations and equity securities,financings to meet our capital expenditure requirements and debt payment obligations in the near term. However, if, for any reason,term, inability to fund such capital expenditure requirements may have a material adverse effect on our financial condition, results of operations and business. In addition, although we currently anticipate that the capital expenditure levels estimated by us will be adequate capital is not available at the time it is

      We purchase wireless network equipment from a small number of suppliers. We purchase our principal wireless network equipment from Samsung Electronics Co., Ltd. and LG Electronics Inc. To date, we have purchased substantially all of the equipment for our CDMA 1xRTT and CDMA 1xEV/ DO networks from Samsung Electronics and substantially all of the equipment for our WCDMA network from Samsung Electronics and LG Electronics. Samsung Electronics also currently manufactures more than 40% of the wireless handsets sold to our subscribers. Although other manufacturers sell the equipment we require, sourcing such equipment from other manufacturers could result in unanticipated costs in maintenance and upkeep of the CDMA 1xRTT and CDMA 1xEV/ DO networks or delays and additional costs in our roll-out or expansion of the CDMA 1xRTTWCDMA network. CarriersWith respect to the introduction of 3G and 3.5G services, various wireless telecommunications service providers globally have had difficulty in obtaining adequate quantities of various types of 3G and 3.5G equipment including handsets, from suppliers. Inability to obtain the needed equipment for our networks in a timely manner may have an adverse effect on our business, financial condition and results of operations.

      In addition, we rely on KT Corporation and SK Networks to provide a substantial majority of our leased lines.lines used for our wireless services. In 2004,2005, KT Corporation and SK Networks provided approximately 21%16.0% and 65%62.0%, respectively, of our leased lines. In order to reduce our dependence on our competitor, KT Corporation, we are considering leasing a majority of our fixed lines from SK Networks in the future. We cannot assure you that we will be able to continue to obtain the necessary equipment from one or more of our suppliers. Any discontinuation or interruption in the availability of equipment from our suppliers for any reason could have an adverse effect on our results of operations. Inability to lease adequate lines at commercially reasonable rates may impact the quality of the services we offer and may result in damage to our reputation and our business.

      All of our businesses are subject to extensive government supervision and regulation. The MIC has periodically reviewed the tariffs charged by wireless operators and has, from time to time, suggested tariff

      The Korean government plays an active role in the selection of technology to be used by telecommunications operators in Korea. The MIC has adopted the W-CDMAWCDMA and cdma2000CDMA2000 technologies as the only standards available in Korea for implementing 3G services. The MIC may impose similar restrictions on the choice of technology used in future telecommunications services and we can give no assurance that the technologies promoted by the Government will provide the best commercial returns for us.

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

      In January 2003, the MIC announced its plan to implement number portability with respect to wireless telecommunications service in Korea. The number portability system allows wireless subscribers to switch wireless service operators while retaining the same mobile phone number.

      We believe that the use of the common prefix identification system may pose a greater risk to us compared to the other wireless telecommunications providers because “011”‘011’ has a very high brand recognition in Korea as the premium wireless telecommunications service. The MIC’s adoption of the number portability system has resulted in and could alsocontinue to result in a deterioration of our market share as a result of weakened customer loyalty, increased competition among wireless service providers and higher costs of marketing as a result of maintaining the number portability system, increased subscriber deactivations and increased churn rate, and higher marketing costs, all of which had, and may continue to have, an adverse effect on our results of operations. See “Operating“Item 5. Operating and Financial Review and Prospects”. See “Information on the Company and “Item 4B. Business Overview — Law and Regulation — Number Portability”.

      In December 2002, the MIC implemented a wireless Internet network co-share system that permits the wireless application protocol gateway, or WAP gateway, of a fixed-line operator to connect to a wireless network service provider’s inter-working function, or IWF, (inter-working function) device. IWF is a device that connects a cellular network with an Internet Protocol, or IP, (Internet Protocol) network while WAP Gatewaygateway converts hypertext transfer protocol, or HTTP protocol, into WAP protocol. This co-share system would allow subscribers of a wireless network service provider to have access to wireless Internet content provided by a fixed-line operator. In December 2002, KT Corporation connected to our IWF but has not yet commenced service. In July 2003, the MIC approved the basic terms regarding the implementation of a network co-system.co-share system. In January 2004, we entered into a memorandum of understanding with Onse to establish a co-share system, under which we plan on launchinglaunched these services in June 2005. Currently, our subscribers can access portals provided by outside parties. In addition, the MIC has requested that a third party oversee wireless operators’ customer billing procedures with respect to third-party content providers who are seeking to provide their content directly to subscribers without going through an individual operator’s portal, as third-party content providers have experienced difficulties in the past in providing their content service directly to subscribers due to the lack of resources for billing users. We believe that such a co-share system, if widely adopted, will have the effect of giving our users access to a wide variety of content using their handsets which may in turn increase revenues attributable to our data services. However, this system could also place significant competitive pressure on the revenues and profits attributable to our NATE wireless portal.

      The MIC’s policy is to promote competition in the Korean telecommunications markets through measures designed to prevent the dominant service provider in a telecommunications market from exercising its market power to prevent the emergence and development of viable competitors. SK Telecom isWe are currently designated by the MIC as a “market dominant service provider” in respect of our wireless telecommunications business. As such, we are subject to more stringentadditional regulation thanto which our competitors.competitors are not subject. For example, under current government regulations, we must obtain prior approval from the MIC to change our existing rates or introduce new rates althoughwhile our competitors may generally change their rates or introduce new rates at their discretion. See “Information on the Company“Item 4B. Business Overview — Law and Regulation — Rate Regulation”. As of April 30,December 31, 2005, our standard peak usage charge rate was approximately 11.1% higher than those charged by our competitors. We could also be required by the MIC to charge higher usage rates than our competitors for future services. In addition, we were required to introduce number portability earlier than our competitors, KT FreetelKTF and LG Telecom.LGT. The MIC also awarded the IMT-2000 license to provide 3G services based on a technology different from ours to LG Telecom forLGT at a fee lower than theour license fee we are required to pay for our IMT-2000 license and on terms generally more favorable than the terms of our license. As a result, our wireless businesses may operate at a competitive disadvantage to that of LG Telecom.

      In addition, when the MIC approved the merger of Shinsegi into SK Telecomus in January 2002, the MIC imposed certain conditions on SK Telecom.us. The MIC periodically reviews our compliance with the conditions related to our merger with Shinsegi. On May 25, 2004, a policy advisory committee to the MIC announced the results of its review and stated that the committee believed that our market dominance may significantly restrict competition in the telecommunications market and that we havehad violated a merger conditionthe conditions related to our acquisition ofmerger with Shinsegi by providing subsidies to handset buyers. The committee stated that it will recommend that the MIC extend the post-merger monitoring period by two years until January 2007 and take appropriate corrective measures against us for providing subsidies to handset buyers. OnIn June 7, 2004, the MIC made a formal decision as to the policy advisory committee’s findings and imposed a Won 11.9 billion fine on us and extended the post-merger monitoring period until January 2007 pursuant to the policy advisory committee’s recommendation. On June 7,May 25, 2004, we voluntarily undertook to limit our market share through the end of 2005 to 52.3% of the wireless telecommunications market, the level of our market share at the time of the approval of our merger with Shinsegi in January 2002. On July 6, 2005, we voluntarily extended such market share limitation through the end of 2007. We can give no assurance that the MIC issuedwill not take action that may have a suspension that prohibited us, along withmaterial adverse effect on our three largest competitors, from acquiring new subscribers forbusiness, operations and financial condition. See “— Our businesses are subject to extensive government regulation and any change in government policy relating to the telecommunications industry could have a periodmaterial adverse effect on our results of 40 days beginning on August 20, 2004 as a punishment for violating the ban on providing subsidies to handset purchasers.operations and financial condition.”

      In addition, we qualify as a “market-dominating business entity” under the Korean Monopoly Regulation and Fair Trade Act, or the Fair Trade Act. The Fair Trade Commission of Korea, or the FTC, approved our acquisition of Shinsegi on various conditions, one of which was that SK Telecom’s and Shinsegi’s combined market share of the wireless telecommunications market, based on numbers of subscribers, be less than 50.0% as of June 30, 2001. In order to satisfy this condition, we reduced the level of our subscriber activations and adopted more stringent involuntary subscriber deactivation policies beginning in 2000 and ceased accepting new subscribers from April 1, 2001 through June 30, 2001. We complied with this requirement by reducing our market share to approximately 49.7% as of June 30, 2001. We are not currently subject to any market share limitations; however, on May 25, 2004, we voluntarily undertook to limit our market share through the end of 2005 to 52.3% of the wireless telecommunications market, through the end of 2005, the level of our market share at the time of the approval of our merger with Shinsegi in January 2002. On July 6, 2005, we voluntarily extended such market share limitation through the end of 2007. We can give no assurancesassurance that the Government will not impose restrictions on our market share in the future or that we will not undertake to voluntarily restrict our market share in the future. If we are subject to market share limitations in the future, our ability to compete effectively will be impeded.

      The FTC is also ascurrently conducting an antitrust investigation into alleged price collusion among KTF, LGT and us. In May 2006, the FTC imposed fines of Won 660 million on KTF and us and Won 462 million on LGT for collusion in terminating optional flat-rate subscription plans. We expect the FTC to announce additional rulings on alleged collusive practices among mobile service providers. We cannot predict the ultimate outcome of the FTC’s investigation, and there can be no assurance that we will not be subject to additional fines or other sanctions, or that the eventual outcome will not have a material adverse effect on our financial condition to the Shinsegi acquisition, imposed a maximum limitor results of 1,200,000 on the number of digital handsets we may purchase annually from our subsidiary, SK Teletech Co., Ltd., until December 31, 2005. The limitation on the number of handsets we may purchase annually from SK Teletech does not apply to W-CDMA handsets.operations.

      The additional regulation to which we are subject has affected our competitiveness in the past and may hurt our profitability and impede our ability to compete effectively against outour competitors in the future.

      Charges of financial statement irregularities by certain directors and executives at SK Networks have culminated in the resignation of four of our board members and executives in March 2004, although none of these resignations were related to any allegations of wrongdoing in connection with their role in our business, andbusiness. SK Telecom was not implicated in any of the charges against SK Networks’ management. Furthermore,However, continuing financial difficulties at SK Networks could result in our having to look for alternative sources for handset distribution and fixed network line needs. In February 2004, Mr. Kil Seung Son and Mr. Tae Won Chey, who both received prison terms of three years in the court of first instance and appealed withto the Seoul High Court in connection with allegations of financial misconduct at SK Networks, resigned from our board of directors, along with Mr. Moon Soo Pyo, our president at the time, and Mr. Jae Won Chey, our executive vice president.president at the time. See “Directors,“Item 6A. Directors and Senior Management and Employees — Involvement In Certain Legal Proceedings”.

      The financial future of SK Networks remains uncertain. In March 2003, the principal creditor banks of SK Networks commenced corporate restructuring procedures against SK Networks after the company announced that its financial statements understated its total debt by Won 1.1 trillion and overstated its profits by Won 1.5 trillion. These banks agreed to a temporary rollover of approximately Won 6.6 trillion of SK Networks’ debt until June 18, 2003 and subsequently decided to put SK Networks into corporate restructuring. In October 2003, SK Networks’ foreign and domestic creditors agreed to a restructuring plan which, among other things, allowed the foreign creditors to cash outhave their debts repaid at a buyout rate of 43% of the face value of the outstanding debt owed to them. In November 2003, SK Networks underwent a capital reduction and sold approximately Won 1 trillion of its assets as part of its restructuring plan, and SK Corporation approved a Won 850 billion debt-for-equity swap. Although SK Networks is still under the joint management of its domestic creditors in accordance with its business normalization plan, some financial indicators suggest that the financial conditions of SK Networks have consistently improved since 2003. In April 2005, the Korea Exchange Inc. removed SK Networks from the ‘watch list’, the list of which is maintained by the Korea Exchange Inc. to alert the public of possible companies that may be delisted from the KRX Stock Market. Korea Information Service, a leading credit ratings agency in Korea, further raised the credit rating of SK Networks by 8 levels from level C in June 2004 to level BB+ at the end of 2004.plan.

      SK Networks is the exclusive distributor of all of the handsets sold by our subsidiary, SK Teletech, to our nationwide network of dealers.      SK Networks also serves as a distributor of handsets manufactured by third parties to our nationwide network of dealers. SK Networks was also the exclusive distributor of all of the handsets sold by our former subsidiary, SK Teletech, prior to our sale of the company to Pantech & Curitel in July 2005. Samsung Electronics

      In addition, in 2004,2005, we leased approximately 65%62.0% of our fixed network lines, which connect our various cell sites and switching stations, from SK Networks. In order to reduce our dependence on the fixed network lines of our competitor, KT Corporation, we are considering leasing a majority of our fixed lines from SK Networks in the future. If there is a material disruption of SK Networks’ ability to maintain and operate this business due to its financial difficulties, we may need to seek alternative sources. Although we do not believe that this will have a materially adverse effect on our business, this may result in a disruption of our services in the short term.

      In the past, allegations that serious health risks may result from the use of wireless telecommunications devices or other transmission equipment have adversely affected share prices of some wireless telecommunications companies in the United States. We cannot assure you that these health concerns will not adversely affect our business. Several class action and personal injury lawsuits have been filed in the United States against several wireless phone manufacturers and carriers, asserting product liability, breach of warranty and other claims relating to radio transmissions to and from wireless phones. Certain of these lawsuits have been dismissed. We could be subject to liability or incur significant costs defending lawsuits brought by our subscribers or other parties who claim to have been harmed by or as a result of our services. In addition, the actual or perceived risk of wireless telecommunications devices could have an adverse effect on us by reducing our number of subscribers or our usage per subscriber.

      We generate substantially all of our revenue from operations in Korea. Our future performance will depend in large part on Korea’s future economic growth. Adverse developments in Korea’s economy or in political or

      InFrom early 1997 and 1998,until 1999, Korea experienced a significant increase infinancial and economic downturn, from which it is widely believed the number and size of companies filing for corporate reorganization and protection from their creditors. As a result of these corporate failures, high levels of short-term foreign currency borrowings from foreign financial institutions and the consideration of non-market oriented factors in making lending decisions, Korea’s financial institutions experienced a sharp increase in non-performing loans and a deterioration in their capital adequacy ratios. These developments ledcountry has now recovered to a substantial increase insignificant extent. However, the number of unemployed workers, reducing the purchasing power of consumers in Korea. These developments also led international credit rating agencies to downgrade the credit ratings of Korea and various companies and financial institutions in Korea to below investment grade, although Standard & Poor’s, or S&P, and Moody’s raised the credit rating of Korea back to investment grade levels in early 1999. The current long-term foreign currency rating of Korea by S&P is A- and the current foreign currency rating on bond obligations of Korea by Moody’s is A3. Prompted by heightened security concerns stemming from nuclear weapons program of Democratic People’s Republic of Korea, or North Korea, Moody’s had changed the outlook on the long-term ratings of Korea from positive to negative in February 2003 before changing it to stable in June 2004 as a series of six party talks involving Korea, the United States, North Korea, China, Japan and Russia suggested a lessened tension over the nuclear weapons program of North Korea.