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Future mobility

SK Telecom to spin off mobility unit, launch JV with Uber

Seung-Woo Lee Oct 16, 2020 (Gmt+09:00)

SK Telecom Co. is spinning off its mobility platform business as a separate entity and also launching a joint venture with US ride-hailing company Uber Technologies Inc. in a move to strengthen its future mobility services.

South Korea’s largest mobile carrier said on Oct. 16 that the new entity, tentatively named T Map Mobility Co., will launch on Dec. 29 after approval at its shareholder meeting scheduled for Nov. 26.
SK Telecom is spinning off its mobility platform business to launch a ride-hailing joint venture with Uber Technologies Inc.
In a related move, SK Telecom said it will establish a joint venture with Uber, the world’s largest mobility platform company, to drive growth in Korea’s ride-hailing market.

Under the plan, Uber will invest over $100 million in the JV, and separately inject around $50 million in T Map Mobility to strengthen their strategic partnership.

The new JV would “create opportunities in the taxi-hailing market in Korea and explore new areas, including future mobility services,” the companies said in a joint statement.

Subject to regulatory approval, the JV is expected to begin operations in the first half of 2021.

JV TO PROMOTE E-HAILING SERVICE

SK Telecom said the JV will promote the e-hailing business in Korea by combining T Map Mobility's network of drivers and mapping technology with Uber's ride-hailing technology and global operations expertise.

For years, SK Telecom has been restructuring its business portfolio toward future mobility
“Together with Uber, we will recognize customers' time and money spent on mobility and turn that to more valuable use, while realizing greater safety in all modes of transportation,” said SK Telecom Chief Executive Park Jung-ho.

“To this end, we will work closely with companies with diverse capabilities to address current challenges in transportation, and ultimately usher in a new era of future mobility technology, such as in flying cars.”

UBER’S LATEST BID TO CRACK TOUGH KOREA MARKET

For Uber, the JV means its renewed attempt at cracking the tough Korean market, where it faced tough competition. In 2015, it had to stop using private cars for its ride-hailing service in Korea in the face of strong opposition from local taxi drivers and regulations. The US company currently offers premium taxi-hailing and registered taxi-hailing services in Korea.

“Through our strong partnership with SKT, we will expand access to ride-hailing services in the country, and bring better service to riders and drivers,” Nelson Chai, Uber’s chief financial officer, said in the joint statement.

SK Telecom and Uber are expected to launch a co-branded platform, which riders and drivers of T Map Taxi will be encouraged to join. T Map Taxi, the mobile carrier’s taxi-hailing service with around 13 million monthly active users, is the second largest such app in Korea after Kakao.

SK Telecom said it expects T Map Mobility, the new entity to be launched from its mobility business, valued at about 1 trillion won ($873 million), to grow into a company worth 4.5 trillion won by 2025.

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

In-Soo Nam edited this article.

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