SK Telecom, a leading South Korean telecommunications company, has reported modest growth in its earnings for the second quarter of 2023.
Compared to the same period last year, SKT experienced a modest growth, with consolidated revenue and operating income increasing by 0.4 percent and 0.8 percent, respectively. This growth was driven by the success of its key businesses, particularly in the data center and cloud sectors. The revenue of SKT’s data center business rose by more than 30 percent year-on-year, while its Cloud business saw an impressive increase of more than 60 percent year-on-year.
SK Telecom has been actively expanding its AI capabilities, and recently, SKT partnered with Deutsche Telekom, e&, and Singtel to form the Global Telco AI Alliance. The alliance aims to co-develop the Telco AI Platform, which will serve as the core foundation for new AI services by combining the strengths of the member companies.
In collaboration with Microsoft, SKT integrated ‘Chat T’ into its AI service ‘A.’ using the ChatGPT model from Microsoft’s Azure OpenAI service. ‘Chat T’ enables users to engage in rich conversations and receive informative responses beyond simple answers. Additionally, SKT has improved its Large Language Model (LLM) to facilitate multi-turn dialogue, allowing the model to understand complex intentions and provide more logical and useful responses.
The Enterprise business of SKT achieved significant revenue growth, with a year-on-year increase of over 9.2 percent to KRW 407.1 billion. This growth was driven by the data center and cloud service businesses, which experienced substantial revenue expansions of more than 30 percent and 60 percent year-on-year, respectively. SKT is planning to open new data centers to further support this growth.
SKT’s Media business also showed growth, with revenue increasing by 1.2 percent year-on-year to KRW 386.5 billion. The growth was attributed to high-quality media assets such as TEAM studio and Btv.
In June 2023, SKT made a strategic investment of USD 100 million in Joby Aviation, acquiring approximately 2 percent stake in the company. The company is actively involved in research and development in the Urban Air Mobility (UAM) field and participates in projects aimed at creating a UAM ecosystem in Korea.
SKT’s metaverse platform ‘ifland’ has gained popularity globally, with 30 percent of its Monthly Active Users (MAU) coming from overseas during the second quarter. The addition of the metaverse social media feature ‘if home’ in May 2023 resulted in the creation of 400,000 if homes by the end of July. Additionally, the subscription service ‘T Universe’ surpassed 2 million MAU during the same quarter, with support from strong partnerships including YouTube Premium.
SKT maintains its leadership in the fixed and mobile telecommunications market, benefiting from business synergy with SK Broadband. As of the end of the second quarter, SKT had 14.67 million 5G subscribers, while SK Broadband secured 9.46 million pay TV subscribers and 6.81 million broadband subscribers.
The company has introduced 25 new price plans in the first half of the year, offering more options to customers. The ‘0 Youth Plan,’ catering to customers aged between 19 and 34, has been particularly popular, chosen by 70 percent of new subscribers, device changers, or those changing their price plans. The ‘Family Roaming’ service, introduced before the June vacation season, benefited 30,000 households or 70,000 individuals in just one month since its launch.
In July 2023, SKT decided to purchase treasury shares worth KRW 300 billion and cancel KRW 200 billion worth of shares, equivalent to around 2 percent of the total number of issued shares. The company remains committed to quarterly dividend payouts, with a dividend of KRW 830 per share confirmed for the second quarter of 2023.
Kim Jin-won, CFO of SKT, expressed the company’s commitment to becoming a leading global AI company by strengthening capabilities and fostering partnerships. SKT aims to maximize corporate and shareholder value through its transformation into an AI-focused entity and will continue to implement ESG management through advanced shareholder return policies.