April 29 (Bloomberg) -- SK Telecom Co., South Korea's largest mobile-phone operator, said first-quarter profit rose 1 percent on increased income from customers who access games and music. The stock rose after earnings beat analysts' expectations.

Net income rose to 453 billion won ($388 million), compared with 449 billion won a year earlier, the Seoul-based company said in a regulatory filing. Profit was more than the 403 billion won median estimate of eight analysts surveyed by Bloomberg News.

SK Telecom's customers increasingly use their phones to access online games and music as well as to send e-mail, helping the operator boost revenue and profit. Earnings from those data services helped offset higher marketing costs.

Operating profit fell 8 percent from a year earlier to 691 billion won, beating the 671 billion won expected by the survey of analysts. Operating profit fell after marketing expenses rose 34 percent to 478 billion won, the company said.

Sales gained 7 percent to 2.4 trillion won from 2.2 trillion won a year earlier, in line with analysts' expectations.

The stock, which earlier traded as much as 2.8 percent lower, rose to 196,500 won, up 0.5 percent on the Korea stock exchange as of 1:27 p.m., after the earnings were released.

To contact the reporter on this story: Young-Sam Cho in Seoul at ycho2@bloomberg.net

Last Updated: April 29, 2004 00:34 EDT