SK Telecom eyes tangible results from AI business in 2024

South Korea’s No. 1 mobile carrier SK Telecom Co. is set to accelerate investments in artificial intelligence to bring more tangible outcomes from the advanced technologies by the end of this year. 

The telecom company will secure financial resources via all means, such as raising profitability, liquidating assets and improving investment efficiency, to invest in AI and future growth sectors, said SK Telecom Chief Financial Officer Kim Yang Seob during the earnings call for the first quarter.

The mobile carrier’s first-quarter revenue and operating profit respectively reached 4.47 trillion won ($3.3 billion) and 498.5 billion won. The figures increased 2.3% and 0.8% on-year, respectively.

The company’s revenue for enterprise business, which covers data centers, Internet of Things, cloud computing and big data for corporate clients, rose more than 10% on-year and backed the mobile carrier’s entire sales increase, the CFO said.

Its AI infrastructure business, which includes AI data center, AI chipset and wired and wireless networks, increased its first-quarter revenue by 26% on-year, thanks to an improved utilization rate of data centers.

SK Telecom will speed up the execution of its so-called AI Pyramid strategy, which is largely divided into AI Infrastructure, AI Transformation (AIX) and AI Service, to bring concrete results by the end of this year.

The mobile carrier is preparing a package of AI data center management solutions in collaboration with SK Group affiliates, including memory chipmaker SK Hynix Inc., telecom company SK Broadband Inc., lubricant products maker SK Enmove Co. and AI chip developer Sapeon.

SK Telecom has also partnered with US companies such as tech solutions provider Super Micro Computer Inc. and graphics processing unit (GPU) cloud provider Lambda Labs to accelerate its data center business.

The mobile carrier will complete the development of the Korean version of a large language model (LLM) tailored for telecom companies as early as June and seek commercialization.

SK Telecom is also developing global telecom-specific LLM in partnerships with SoftBank,  Deutsche Telekom, Singapore Telecommunications Ltd. (SingTel) and the United Arab Emirates’ e&.

“Learning telecom data, based on 1.3 billion mobile carrier users across 50 countries, will enable a company to secure a larger amount of data than any other big tech firms, and this will offer the company not only economies of scale but also power of negotiations with tech giants,” said Kim.

SK Telecom plans to return at least 50% of its net profit on a consolidated basis between 2024 and 2026. The company maintained its first-quarter dividend at 830 won per share, the same amount from a year earlier. 

The company will prioritize the stability of dividend payout and will consider buying its treasury stocks given the corporate value, financial structure, investment for growth and foreign investors’ holdings, Kim said.

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


Jihyun Kim edited this article.