5.	Operating Segments

The Group’s operating segments have been identified to be each business unit, by which the Group provides independent services and merchandise. The Group’s reportable segments are cellular services, which include cellular voice service, wireless data service and wireless internet services; fixed-line telecommunication services, which include telephone services, internet services, and leased line services; e-commerce services, which from 2018 include only the Eleven Street Co., Ltd., the open marketplace platform; and all other businesses, which include the Group’s internet portal services and other immaterial operations, each of which does not meet the quantitative threshold to be considered as a reportable segment and are presented collectively as others.

(1) Segment information for the years ended December 31, 2018, 2017 and 2016 are as follows:


(In millions of won)
	2018
	Cellular Services		Fixed-line telecommu- nication services		E-commerce Services			Others			Sub-total		Adjustments			Total
Total revenue	￦	13,961,762		3,973,533		674,359			1,198,865			19,808,519		(2,934,559	)		16,873,960
Inter-segment revenue		1,582,865		1,040,935		56,280			254,479			2,934,559		(2,934,559	)		—
External revenue		12,378,897		2,932,598		618,079			944,386			16,873,960		—			16,873,960
Depreciation and amortization		2,341,862		643,941		16,446			123,869			3,126,118		—			3,126,118
Operating profit (loss)		1,299,869		228,225		(67,757	)		(258,577	)		1,201,760		(367,909	)		833,851
Gain relating to investments in subsidiaries, associates and joint ventures, net																	3,270,912
Finance income																	256,435
Finance costs																	(385,232	)

Profit before income tax																	3,975,966


(In millions of won)
	2017
	Cellular Services		Fixed-line telecommu- nication services		E-commerce *Services()**			*Others()**			Sub-total		Adjustments			Total
Total revenue	￦	14,873,543		3,586,887		684,762			1,195,977			20,341,169		(2,821,156	)		17,520,013
Inter-segment revenue		1,611,408		862,736		37,662			309,350			2,821,156		(2,821,156	)		—
External revenue		13,262,135		2,724,151		647,100			886,627			17,520,013		—			17,520,013
Depreciation and amortization		2,390,016		592,877		15,221			99,352			3,097,466		—			3,097,466
Operating profit (loss)		1,714,078		167,515		(153,946	)		(191,021	)		1,536,626		(312,054	)		1,224,572
Gain relating to investments in subsidiaries, associates and joint ventures, net																	2,245,732
Finance income																	366,561
Finance costs																	(433,616	)

Profit before income tax																	3,403,249


(In millions of won)
	2016
	Cellular Services		Fixed-line telecommu- nication services		E-commerce *Services()**			*Others()**			Sub-total		Adjustments			Total
Total revenue	￦	14,635,720		3,349,905		608,585			1,295,112			19,889,322		(2,797,506	)		17,091,816
Inter-segment revenue		1,630,811		698,712		62,360			405,623			2,797,506		(2,797,506	)		—
External revenue		13,004,909		2,651,193		546,225			889,489			17,091,816		—			17,091,816
Depreciation and amortization		2,262,363		551,811		14,783			112,929			2,941,886		—			2,941,886
Operating profit (loss)		1,799,127		132,459		(245,703	)		(150,139	)		1,535,744		(232,326	)		1,303,418
Gain relating to investments in subsidiaries, associates and joint ventures, net																	544,501
Finance income																	575,050
Finance costs																	(326,830	)

Profit before income tax																	2,096,139

(*)	Segment information for the years ended December 31, 2017 and 2016 were recast to reflect Eleven Street Co., Ltd. only in the E-Commerce Services segment, with all the other businesses that were previously included in the E-Commerce Services segment now presented in “others” segment.

Segment information is based on information derived from IFRS financial statements, except for certain items included in operating profit as disclosed in note 5-(2).

(2)	Reconciliation of total segment operating income to consolidated operating profit from continuing operations for the years ended December 31, 2018, 2017 and 2016 are as follows:


(In millions of won)
	2018			2017			2016
Total segment operating income	￦	1,201,760			1,536,626			1,535,744
Other operating income:
Gain on disposal of property and equipment and intangible assets		38,933			13,991			6,908
Others(*1)		33,017			18,006			59,640

		71,950			31,997			66,548
Other operating expenses:
Impairment loss on property and equipment and intangible assets		(255,839	)		(54,946	)		(24,506	)
Loss on disposal of property and equipment and intangible assets		(87,257	)		(60,086	)		(63,797	)
Donations		(59,012	)		(112,634	)		(96,633	)
Bad debt for accounts receivable — other		(7,718	)		(5,793	)		(40,312	)
Others(*2)		(30,033	)		(110,592	)		(73,626	)

		(439,859	)		(344,051	)		(298,874	)

Consolidated operating profit from continuing operations	￦	833,851			1,224,572			1,303,418

(*1)	Others for the years ended December 31, 2018 and 2016 include ￦11 billion and ￦25 billion of penalty refund, respectively.

(*2)	Others for the years ended December 31, 2018, 2017 and 2016 include ￦0.4 billion, ￦21.4 billion and ￦7.6 billion of penalties, respectively, and various other expenses with inconsequential amounts.

Since there are no intersegment sales of inventory or depreciable assets, there is no unrealized intersegment profit to be eliminated on consolidation. Domestic revenue for the years ended December 31, 2018, 2017 and 2016 amounts to ￦16,656 billion, ￦17,374 billion and ￦16,940 billion, respectively. Domestic non-current assets (excluding financial assets, investments in associates and joint ventures and deferred tax assets) as of December 31, 2018, 2017 and 2016 amount to ￦20,040 billion, ￦15,554 billion and ￦15,949 billion, and non-current assets outside of Korea amount to ￦72 billion, ￦257 billion and ￦286 billion, respectively.

No single customer contributed 10% or more to the Group’s total sales for the years ended December 31, 2018, 2017 and 2016.

The Group principally operates its businesses in Korea and the revenue amounts earned outside of Korea are immaterial. Therefore, no entity-wide geographical information is presented.

(3)	Disaggregation of operating revenues considering the economic factors that affect the amounts, timing and uncertainty of the Group’s revenue and future cash flows is as follows:


(In millions of won)
		2018		2017		2016
Products transferred at a point in time:
Cellular revenue	Goods(*1)	￦	1,215,886		1,213,314		1,080,015
Fixed-line telecommunication revenue	Goods		119,599		74,065		95,218
Other revenue	Goods		112,859		93,109		60,914
	Products		31,974		25,068		28,002

			1,480,318		1,405,556		1,264,149

Services transferred over time:
Cellular revenue	Wireless service(*2)		9,770,423		10,638,961		10,582,963
	Cellular interconnection		532,156		592,755		614,446
	Other(*3)		860,432		817,105		727,485
Fixed-line telecommunication revenue	Fixed-line telephone service		291,028		308,051		346,580
	Fixed-line interconnection		95,742		116,069		134,089
	Internet Protocol Television(*4)		1,140,327		1,010,159		825,111
	International calls		80,415		89,412		95,986
	Internet service and miscellaneous(*5)		1,205,487		1,126,395		1,154,209
E-commerce services revenue	E-commerce service		618,079		647,100		546,225
Other revenue	Miscellaneous(*6)		799,553		768,450		800,573

			15,393,642		16,114,457		15,827,667

		￦	16,873,960		17,520,013		17,091,816

(*1)	Cellular revenue includes revenue from sales of handsets and other electronic accessories.

(*2)	Wireless service includes revenue from wireless voice and data transmission services principally derived from usage charges to wireless subscribers.

(*3)	Other revenue includes revenue from billing and collection services as well as other miscellaneous services.

(*4)	IPTV service revenue includes revenue from IPTV services principally derived from usage charges to IPTV subscribers.

(*5)	Internet service includes revenue from the high speed broadband internet service principally derived from usage charges to subscribers as well as other miscellaneous services.

(*6)	Miscellaneous other revenue includes revenue from considerations received for the development and maintenance of system software, and digital contents platform services.