SK Telecom to further develop AI, its growth driver in Q1

SK Telecom Co. beat market expectations for its first-quarter earnings thanks to its robust non-telecom businesses and vowed to continue to bolster its new growth engine AI to drive future growth, it said on Wednesday.

South Korea’s top mobile carrier reported in a regulatory filing that its consolidated operating profit for the January-March period added 14.4% from the same quarter a year earlier to 494.8 billion won ($373.7 million) on sales of 4.4 trillion won, up 2.2% over the same period.

The result came above a market consensus of 487.8 billion won estimated by Yonhap Infomax, a Korean financial data firm. 

Its earnings are also estimated to exceed those of its local rivals KT Corp. and LG Uplus Corp. whose first-quarter earnings outlook is dim.   

SK Telecom shares gained 2.4% to end at 49,750 won on Wednesday, outperforming Korea’s benchmark Kospi index, which was down 0.6%.

The company attributed its solid results to the strong performance of its new growth drivers in the media and business-to-business sectors.

Its efforts to transform into an AI company have paid off, reinforcing the new businesses while sharply reducing its reliance on the traditional telecom business, said market analysts.

On Wednesday, SK Telecom vowed to further advance its AI capabilities to turn its services across the board into AI-powered growth businesses after forming robust partnerships with AI experts.

MEDIA, ENTERPRISE DIVISIONS PERFORM WELL

Its mainstay non-telecom businesses, the Media and Enterprise divisions, saw revenue up 10.2% and 5.8% on-year, respectively, in the first quarter.

The Media division, which oversees entertainment, subscription-based content and metaverse services, posted 393.2 billion won in revenue in the quarter thanks to its improved AI targeting across multiple channels.

Revenue in the Enterprise business also increased, to 386.2 billion won, after revenue in its core data center and cloud services jumped 28.2% and 22.3% on-year, respectively.

In particular, the AI Contact Center, opened a year ago, reported record high orders of 8.1 billion won.

Its cooperation with Korean food delivery platform Yogiyo and global streaming giant YouTube Premium also boosted the growth of its subscription service T Universe, according to the company.

Monthly active users (MAU) of T Universe in the first quarter surpassed 1.8 million while foreign users of its metaverse platform ifland accounted for more than 10% of its total MAUs in the quarter following its entry into 49 countries last year.

K-AI ALLIANCE

The stellar performance of SK Telecom’s AI-powered services owes largely to the company’s diverse partnerships with AI tech companies at home and abroad.

It has been fortifying its generative AI capability through its collaboration with Scatter Lab, a Korean chatbot leader famous for Lee Luda and Kang Daon conversational AI services.

It has also joined hands with a pack of AI tech companies, including self-driving vehicle AI solution startup Phantom AI Inc., AI chip maker Sapeon Inc., cloud management service Bespin Global, machine learning firm Moloco Inc., AI expert Konan Technology Inc., AI-based cooperation tool developer Swit Technologies Inc. and AI startup Tuat Corp.

SK Telecom is working closely with all of these AI trailblazers to develop world-class AI technology and become an AI leader.

Amid its aggressive AI push, its traditional fixed line and mobile business still performed solidly in the quarter on a rise in both 5G and pay TV subscriptions.

Its 5G subscriber base grew to 14.1 million in the first quarter versus 10.9 million in the same period a year ago, while its pay TV (IPTV and CATV) subscribers rose to 9.4 million from 9.1 million over the same period a year ago.  

Write to Ji-Eun Jeong at jeong@hankyung.com
Sookyung Seo edited this article.