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Future mobility

SK Telecom seeks $271 mn for mobility spin-off

Nov 17, 2020 (Gmt+09:00)

SK Telecom showcases its mobility services at CES 2020


South Korea’s largest mobile carrier SK Telecom Co. is looking to raise up to 300 billion won ($271 million) ahead of rolling out its new mobility spin-off. The funds will be used to foster the new entity, T Map Mobility Co., as the country's largest mobility service. 

The company has issued investment proposals to financial investors including overseas and domestic private equity firms, according to the investment banking industry on Nov. 17. The company aims to raise between 200 and 300 billion won.

Last month, SK Telecom announced that it would spin off its mobility platform business as a separate entity and also set up a joint venture with US ride-hailing company Uber Technologies Inc. in a move to strengthen its future mobility services.

Uber plans to invest $100 million in the JV, and $50 million in T Map Mobility.

Investors are enthusiastic about spin-off given the chance to partner with the SK Group and as mobility is regularly tapped as a future growth driver.

From an investor perspective, handsome returns can be expected based on T Map Mobility’s growth potential. SK Telecom also plans to push for an initial public offering in the mid to long term with T Map Mobility.

“Financial investors are likely to compete fiercely given that mobility is heralded as an up and coming industry,” said an investment banking industry source. 

SK Telecom is aiming for T Map Mobility to post yearly revenue of 600 billion won with an enterprise value of 4.5 trillion won by 2025.

SK Telecom offers superior mapping technology

SK Telecom may be a latecomer to the domestic mobility market, but it is a powerful contender expected to shake up the industry. The company's competitiveness lies in its ample capital and sound infrastructure, which will speed up its expansion.

Also, SK Telecom's partnership with Uber —  combining T Map Mobility's network of drivers and mapping technology with Uber's ride-hailing technology and global operations expertise — is expected to create great synergy.

Currently, the domestic mobility industry is dominated by Kakao Mobility Corp., the mobility arm of Korea's largest messaging app operator Kakao Corp. Kakao Mobility holds a hefty 80% market share in the taxi-hailing market.

Also, Korea’s car-sharing platform Socar Inc. has been gearing up to make a comeback after facing a setback earlier this year when the government passed a law suspending the service. The company has recently secured 60 billion won in investments to shore up its mobility operations.

As competition heats up between the three mobility services — SK Telecom, Kakao Mobility, SoCar — it is difficult to predict which company will emerge as the industry frontrunner.



Write to Chae-yeon Kim at why29@hankyung.com

Danbee Lee edited this article.

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