SK Telecom’s transition into AI company gains traction

SK Telecom Co., South Korea’s leading telecom firm, reported solid earnings across the board in the second quarter, especially with steady growth in non-telecom businesses amid its transition into an artificial intelligence company from a traditional telecom company.  

The major mobile carrier announced on Tuesday that its consolidated operating profit in the second quarter ending in June stood at 463.4 billion won ($352.8 million), up 0.8% from the same period a year earlier.

Its revenue inched up 0.4% on-year to 4.3 trillion won while the bottom line climbed 34.7% to 347.8 billion won.

SK Telecom’s new growth engines, the data center and cloud businesses, continued to drive the Korean telecom major’s growth, while it maintained its leadership in the country’s traditional telecom business.

B2B AND MEDIA SEE STEADY GROWTH

The company's enterprise business revenue grew 9.2% on-year to 407.1 billion won in the second quarter.

The opening of the second Bundang Center in Gyeonggi Province near Seoul further shored up its data center business, which raked in 49.4 billion won in revenue, up 33.2% on-year. It is readying to open another new data center.

Its cloud sales jumped 67.7% to 39.8 billion won over the same period, mainly driven by its solid managed service provider (MSP) business on recurring and new customers from the game and financial sectors.

The company presented a rosy outlook for its cloud service, which is projected to maintain its growth streak in line with the growth of the AI and hybrid cloud markets.   

The media division, which oversees entertainment, subscription-based content and metaverse services, also fared well, with revenue in the quarter up 1.2% on-year to 386.5 billion won.

The monthly active users (MAU) of its subscription service T Universe, which also services YouTube Premium, topped 2 million in the second quarter versus over 1.8 million in the previous quarter.

Its metaverse platform ifland acquired more foreign users in the quarter, accounting for more than 30% of its total MAUs.

AI COMPANY

Its AI push to transform itself into an AI company from a traditional telecom company is also gaining traction.

SK Telecom’s Chief Executive Ryu Young-sang said at the annual shareholders’ meeting in March that the company will strive to take a leap as an AI company this year.

The company last month launched the Global Telcom AI Alliance with Deutsche Telekom AG, UAE's e& EAND.AD and Singapore Telecommunications to jointly develop an AI platform for the telecom industry, which could pave the way for the companies' inroads into the market with economies of scale.

They will also work together to lead AI transformation in both landline and wireless services and explore new growth engines with AI technologies.

In June, SK Telecom added ChatT, a generative AI service powered by ChatGPT-backed Microsoft Azura OpenAI service, to A Dot to provide users of SK Telecom’s AI service with more in-depth information handled by experts.

The company said it has advanced its A Dot services with multiturn dialogue technology.

While going all-out to expand its presence in non-telecom sectors, SK Telecom continued to lead the country’s telecom market in the quarter on a rise in 5G service subscribers to 14.7 million.

Its shares ended 0.6% lower at 46,500 won on Tuesday.

Write to Seung-Woo Lee at leeswoo@hankyung.com

Sookyung Seo edited this article.