Widerthan (WTHNY) 6-K Widerthan Co., LTD.

Exhibit 99.1

NEWS
For Immediate Release
Investor Contact
Tania Almond
WiderThan
571-521-1080
ir@widerthan.com

WiderThan Reports 2006 Second Quarter Results
Second Quarter Revenues Grow to $33.1 Million, an Increase of 49% Year-Over-Year;
New Customer Win in Ringback Tone Service Announced

Seoul, South Korea — August 9, 2006 —WiderThan Co., Ltd. (NASDAQ: WTHN), a leading global provider of integrated mobile entertainment solutions for wireless carriers, today reported financial results for the second quarter ended June 30, 2006 and issued financial guidance for the third quarter and fourth quarter of 2006.

Second quarter 2006 revenues were $33.1 million, an increase of 49% over the $22.2 million in the second quarter of 2005. Net income, calculated in accordance with generally accepted accounting principles in the United States (US GAAP), for the second quarter of 2006 was $4.6 million, or $0.23 per diluted American Depositary Share (ADS), compared to $1.6 million or $0.08 per diluted ADS in the prior year period. Included in net income for the second quarter of 2006 was a non-cash, stock-based compensation charge of $0.7 million, compared to a charge of $0.6 million in the prior year period. Adjusted net income, which excludes non-cash stock compensation expense, was $5.2 million, or $0.26 per diluted ADS, in the second quarter of 2006, compared to an adjusted net income of $2.2 million, or $0.21 per diluted ADS, in the prior year period.

Commenting on the results, Sang Jun Park, WiderThan’s Chief Executive Officer, said, “WiderThan had a strong second quarter in 2006. I am also very pleased to announce that we have signed a new carrier customer for our Ringback Tone (RBT) Service. Service integration for this carrier is underway and we expect to launch service by the end of the third quarter of this year.”

F. Terry Kremian, WiderThan’s Global President, said, “Ringback tone subscribers outside Korea grew 20% sequentially in the second quarter of 2006 from the first quarter of 2006. Overall, we added a total of 1.5 million new RBT users bringing our total active RBT subscribers to 16.9 million.” Mr. Kremian added, “We continue to see solid consumer uptake for our carriers’ services in both ringback tone penetration and music-on-demand services.”

Cash, cash equivalents and short-term financial instruments on June 30, 2006, totaled $93.1 million. During the second quarter of 2006, WiderThan generated approximately $3.0 million in cash from operations. Hoseok Kim, WiderThan’s Chief Financial Officer, commented on the company’s finances saying, “Positive cash flow in the second quarter further enhances our strong balance sheet. In addition, we continue to improve our internal processes related to financial reporting which enables us to report our results in a more timely manner.”

Third and Fourth Quarter 2006 Outlook

WiderThan is issuing financial guidance for the third quarter and fourth quarter of 2006 based on information as of August 8, 2006. This guidance assumes that our major currency exchange rates remain constant.

	Third Quarter 2006	Fourth Quarter 2006
Net Revenues	$31.0—$33.0 million	$34.8—$37.3 million
US GAAP Net Income	$3.9—$4.3 million	$5.0—$5.6 million
Adjusted Net Income	$4.5—$4.9 million	$5.6—$6.2 million

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Presentation, Conference Call and Web Cast

On Wednesday, August 9, 2006 at 4:15 p.m. Eastern Daylight Time, WiderThan will post to its web site athttp://ir.widerthan.com a prerecorded presentation and transcript of the WiderThan management team’s review of the company’s second quarter financial performance. There will be a live question and answer (Q&A) conference call to allow analysts and investors to ask questions of the WiderThan management team at 5:00 p.m. Eastern Daylight Time that same day. A listen-only web cast of the Q&A session will be available athttp://ir.widerthan.com. Those wishing to participate in the live Q&A session should use the following numbers to dial into the session:

Calling from the United States or Canada: 800-260-8140
Calling from other countries: 617-614-3672
Pass code: 11764871

An online replay of the presentation and Q&A web cast will be available at http://ir.widerthan.com following the completion of the live call and will remain available for at least 90 days.

Non-GAAP Measures

To supplement WiderThan’s consolidated financial statements presented in accordance with US GAAP, WiderThan uses non-US GAAP measures of certain components of financial performance, including adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) and adjusted net income, which are adjusted from our US GAAP results. These non-GAAP results provide useful information to both management and investors by excluding expenses which we believe may not be indicative of the Company’s core operating results. These measures should be considered in addition to results prepared in accordance with US GAAP, but should not be considered a substitute for, or superior to, US GAAP results. The non-GAAP measures included in this press release have been reconciled to the nearest US GAAP measure.

Adjusted EBITDA excludes non-cash stock-based compensation expense, depreciation and amortization expense from the Company’s statement of operations. Adjusted net income excludes non-cash based stock compensation expense from the Company’s statement of operations.

About WiderThan

WiderThan is a leading provider of integrated mobile entertainment solutions for wireless carriers. Our applications, content and services enable wireless carriers to provide a broad range of mobile entertainment, such as ringback tones, music-on-demand, mobile games, ringtones, messaging and information services, to their subscribers. WiderThan currently provides mobile entertainment solutions to more than 50 wireless carriers in over 25 countries, including SK Telecom in Korea, Cingular Wireless, Sprint Nextel, T-Mobile USA and Verizon Wireless in the United States, Bharti Airtel in India and Globe Telecom in the Philippines.

Forward-Looking and Cautionary Statements

Any statements in this announcement about the future expectations, plans or prospects of WiderThan, including statements containing the words “believe,” “plan,” “anticipate,” “expect,” “estimate,” “will” and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including factors described in WiderThan’s annual report on Form 20-F for the year ended December 31, 2005. These factors include the fluctuations of revenues and earnings, our reliance on SK Telecom to generate a majority of revenues and as a partner to develop and test services, the fact that the markets in which we operate are highly competitive, the challenges of global expansion, the lack of any contractual obligation for our carrier customers to use our services, the fact that a substantial portion of our revenues are subject to pricing decisions of carrier customers, the consolidation among our potential customer base, the dynamics of the wireless carrier markets in which our largest potential customers compete with one another, the fact that our carrier customers could begin developing and/or providing some or all of our carrier application services on their own, our dependence on ringback tone service for a significant portion of our revenue, potential increases in royalty rates payable to music label companies, currency exchange rate fluctuations, maintaining an effective system of internal controls and complying with regulations required by the telecom industry and in Korea. The forward-looking statements included in this announcement represent WiderThan’s view as of the date of this release. WiderThan anticipates that subsequent events and developments may cause WiderThan’s views to change. However, WiderThan disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this document. These forward-looking statements should not be relied upon as representing WiderThan’s views as of any date subsequent to the date of this announcement.

# # #

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WiderThan Co., Ltd.
Condensed Consolidated Statements of Operations (Unaudited)
(In thousands of US dollars, except share and per share information)

	Three Months Ended June 30,						Six Months Ended June 30,
	2005			2006			2005			2006
Revenues
Service revenues
Carrier application services	$	13,860		$	22,878		$	26,004		$	43,485
Content services		3,979			3,576			9,727			7,044
Professional and other services		2,082			3,081			4,263			5,466
Total service revenues		19,921			29,535			39,994			55,995
System sales		2,283			3,531			4,479			5,874
Total revenues		22,204			33,066			44,473			61,869
Costs and expenses (Note A)
Cost of service revenues (exclusive of depreciation and amortization, as shown below)		7,342			10,909			14,566			20,683
Cost of system sales (exclusive of depreciation and amortization, as shown below)		1,573			1,370			2,621			2,766
Depreciation and amortization		1,051			1,369			2,031			2,640
Selling and marketing		1,324			1,273			2,283			1,949
General and administrative		5,722			9,747			11,784			18,837
Research and development		3,179			2,120			5,794			5,138
Total costs and expenses		20,191			26,788			39,079			52,013
Operating income		2,013			6,278			5,394			9,856
Other income
Interest income		121			935			249			1,768
Foreign exchange gain (loss), net		39			(92	)		92			(367	)
Total other income		160			843			341			1,401
Income before taxes, minority interest and earnings from equity method investment		2,173			7,121			5,735			11,257
Income taxes		643			2,659			1,555			4,221
Income before minority interest and earnings from equity method investment		1,530			4,462			4,180			7,036
Minority Interest		—			—			—			—
Gain (loss) from equity method investment		57			91			(60	)		168
Income before cumulative effect of a change in accounting principle		1,587			4,553			4,120			7,204
Cumulative effect on prior years of retroactive application of FAS123(R)		—			—			—			152
Net Income	$	1,587		$	4,553		$	4,120		$	7,356
Accretion of preferred shares		(297	)		—			(626	)		—
Amounts allocated to participating preferred shareholders		(586	)		—			(1,061	)		—
Net income attributable to common shares	$	704		$	4,553		$	2,433		$	7,356
Earning per share — basic	$	0.08		$	0.23		$	0.23		$	0.37
Earning per share — diluted	$	0.08		$	0.23		$	0.23		$	0.36
Weighted average number of shares — basic		10,500,000			19,807,216			10,500,000			19,807,216
Weighted average number of shares — diluted		10,510,517			20,220,824			10,510,517			20,258,320

Note A: The following stock compensation expenses resulting from our stock options, employee stock ownership association (ESOA) and virtual stock options (VSOs) are included in the following expense categories:

	Three Months Ended June 30,				Six Months Ended June 30,
	2005		2006		2005		2006
Cost of service revenues	$	57	$	130	$	111	$	222
Cost of system sales		7		10		10		16
General and administrative		434		454		820		1,005
Research and development		138		57		250		116
Total	$	636	$	651	$	1,191	$	1,359

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WiderThan Co., Ltd.
Condensed Consolidated Balance Sheet
(In thousands of US dollars)

	December 31,			June 30,
	2005			2006
	(Audited)			(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	71,171		$	50,931
Short-term financial instruments		14,851			42,172
Accounts receivable, net		34,924			32,972
Deferred costs		5,589			6,998
Other current assets		2,745			3,629
Total current assets		129,280			136,702
Property, plant and equipment, net		10,346			11,870
Goodwill		18,673			19,883
Other non-current assets		10,034			11,359
Total assets	$	168,333		$	179,814
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable		22,636			22,537
Current portion of deferred income		6,614			2,931
Accrued expenses		6,099			5,488
Taxes payable		2,620			3,284
Other current liabilities		3,753			3,937
Cash Appreciation Right liability		1,210			—
Total current liabilities		42,932			38,177
Non-current liabilities
Long-term deferred income, net of current portion		3,158			2,056
Other non-current liabilities		1,247			2,343
Total liabilities		47,337			42,576
Commitments and contingencies
Minority interest		(133	)		—
Stockholders’ equity
Common stock: Won 500 par value; authorized 30 million shares, issued and outstanding 10.5 million, and 19.8 million shares in 2005 and 2006, respectively		8,871			8,871
Additional paid-in capital		87,540			89,080
Retained earnings		17,805			24,828
Accumulated other comprehensive income		6,913			14,459
Total stockholders’ equity		121,129			137,238
Total liabilities and stockholders’ equity	$	168,333		$	179,814

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WiderThan Co., Ltd.
Condensed Consolidated Statement of Cash Flows (Unaudited)
(In thousands of US dollars)

	Three Months Ended			Six Months Ended
	June 30, 2006			June 30, 2006
Cash flows from operating activities:
Net income	$	4,553		$	7,356
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		1,369			2,640
Stock compensation expenses		651			1,359
Cumulative effect on prior years of retroactive application of FAS123(R)		—			(152	)
Foreign exchange translation loss, net		92			367
Equity in gain of related equity investment		(91	)		(168	)
Provision for severance benefits		323			634
Change in operating assets and liabilities:
Decrease (increase) in accounts receivable		(2,684	)		3,790
Increase in deferred costs		(696	)		(1,032	)
Increase in other assets		(1,592	)		(1,383	)
Increase (decrease) in trade accounts payable		1,528			(1,545	)
Decrease in deferred income		(2,450	)		(4,054	)
Increase (decrease) in accrued expenses		900			(992	)
Increase in taxes payable		1,012			487
Increase (decrease) in long-term deferred income		362			(1,289	)
Payment of severance benefits		(42	)		(50	)
Payment of cash appreciation right liability		(1,210	)		(1,210	)
Increase in other liabilities		1,021			358
Net cash provided by operating activities		3,046			5,116
Cash flows from investing activities:
(Decrease) increase in short-term financial instruments, net		—			(25,985	)
Purchase of property, plant and equipment		(2,365	)		(3,290	)
Net cash used in investing activities		(2,365	)		(29,275	)
Cash flows from financing activities:
Decrease in minority interest		149			133
Net cash provided by financing activities		149			133
Effect of exchange rate changes on cash and cash equivalents		953			3,786
Net decrease (increase) in cash and cash equivalents		1,783			(20,240	)
Cash and cash equivalents:
Beginning of year		49,148			71,171
End of period	$	50,931		$	50,931

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WiderThan Co., Ltd.
Reconciliation of Non GAAP Measures to GAAP (Unaudited)
(In thousands of US dollars, except share and per share information)

	Three Months Ended June 30,						Six Months Ended June 30,
	2005			2006			2005			2006
Reconciliation to adjusted EBITDA:
Net income	$	1,587		$	4,553		$	4,120		$	7,356
Cumulative effect on prior years of retroactive application of FAS123(R)		—			—			—			152
(Gain) loss from equity method investment		(57	)		(91	)		60			(168	)
Minority interest		—			—			—			—
Income taxes		643			2,659			1,555			4,221
Total other income		(160	)		(843	)		(341	)		(1,401	)
Depreciation and amortization		1,051			1,369			2,031			2,640
Stock compensation expenses		636			651			1,191			1,359
Adjusted EBITDA	$	3,700		$	8,298		$	8,616		$	14,159

	Three Months Ended June 30,				Six Months Ended June 30,
	2005		2006		2005		2006
Reconciliation to adjusted net income:
Income before cumulative effect of a change in accounting principle	$	1,587	$	4,553	$	4,120	$	7,356
Stock compensation expenses		636		651		1,191		1,359
Adjusted net income	$	2,223	$	5,204	$	5,311	$	8,715
Adjusted net income per share — diluted	$	0.21	$	0.26	$	0.51	$	0.43
Weighted average number of shares — diluted		10,510,517		20,220,824		10,510,517		20,258,320

WiderThan Co., Ltd.
Selected Operational Data for Carrier Application Services

	For the Three Months Ended June 30,
	2005		2006
Ringback tones:
Number of carriers (1)		6		7
Number of accessible subscribers (2) (in millions)		116.5		148.0
Number of ringback tone subscribers (3) (in millions)		11.9		16.9
Inter-carrier messaging:
Number of carriers (1)		26		37
Number of messages delivered (4) (in billions)		4.0		9.2
Music-on-demand:
Number of carriers (1)		1		2
Number of accessible subscribers (2) (in millions)		19.2		74.8

Notes:
(1)	Represents the aggregate number of carriers for which the relevant service was in operation during the relevant period.
(2)	Represents the approximate aggregate number of our carriers customers’ wireless subscribers at the end of the relevant period as reported publicly by our carrier customers.
(3)	Represents the aggregate number of subscribers to the ringback tone service provided by our carrier customers during the relevant period.
(4)	Represents the aggregate number of messages delivered by means of our inter-carrier messaging service on behalf of our carrier customers during the relevant period.

WiderThan Co., Ltd.
Geographic Revenue Distribution

	For the Three Months Ended June 30,
	2005			2006
Korea		69	%		62	%
America		24	%		31	%
Asia (ex-Korea)		5	%		6	%
EMEA		2	%		1	%

	For the Six Months Ended June 30,
	2005			2006
Korea		68	%		62	%
America		24	%		31	%
Asia (ex-Korea)		7	%		6	%
EMEA		2	%		1	%

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