- SK Telecom intensifies investments in AI to yield tangible outcomes by end of 2024.
- First-quarter revenues show a 2.3% increase year-on-year, with notable growth in enterprise business and AI infrastructure division.
- Implementation of AI Pyramid strategy to expedite AI Infrastructure, AI Transformation (AIX), and AI Services.
- Collaborations with SK Group affiliates and US firms to develop AI solutions and accelerate data center business.
- Development of Korean and global telecom-specific large language models (LLMs) for commercialization.
- Plans to allocate at least 50% of net profit between 2024 and 2026, prioritizing dividend stability and considering treasury stock buybacks.
Main AI News:
SK Telecom, South Korea’s leading mobile carrier, is poised to intensify its investments in artificial intelligence (AI) to yield tangible results from these cutting-edge technologies by the close of this year.
In an earnings call for the first quarter, SK Telecom’s Chief Financial Officer Kim Yang Seob revealed plans to secure financial resources through various channels, including enhancing profitability, divesting assets, and optimizing investment efficiency, all aimed at fueling investments in AI and future growth areas.
During the first quarter, the telecom giant reported revenues of 4.47 trillion won ($3.3 billion) and an operating profit of 498.5 billion won, marking a 2.3% and 0.8% increase year-on-year, respectively.
According to the CFO, the company experienced a notable uptick in revenue from its enterprise business segment, encompassing data centers, Internet of Things (IoT), cloud computing, and big data services for corporate clients, with a more than 10% surge year-on-year, significantly contributing to the overall sales growth.
Furthermore, its AI infrastructure division, covering AI data centers, chipsets, and both wired and wireless networks, witnessed a robust 26% year-on-year revenue increase in the first quarter, attributed to enhanced data center utilization rates.
SK Telecom is now poised to accelerate the implementation of its AI Pyramid strategy, which comprises AI Infrastructure, AI Transformation (AIX), and AI Services, with the aim of delivering tangible outcomes by year-end.
In collaboration with SK Group affiliates such as SK Hynix Inc., SK Broadband Inc., SK Enmove Co., and Sapeon, an AI chip developer, SK Telecom is developing a suite of AI data center management solutions. Additionally, partnerships with US firms like Super Micro Computer Inc. and Lambda Labs are set to expedite its data center business.
Moreover, SK Telecom is on track to unveil a Korean version of a large language model (LLM) tailored for telecom companies by June, with plans for commercialization. The company is also collaborating with global telecom giants including SoftBank, Deutsche Telekom, SingTel, and e&, to develop telecom-specific LLMs.
Kim emphasized the significance of leveraging telecom data from over 1.3 billion mobile carrier users across 50 countries, asserting that it will grant the company a competitive edge in terms of data volume and negotiation power with tech giants.
Looking ahead, SK Telecom aims to allocate at least 50% of its net profit on a consolidated basis between 2024 and 2026. The company has maintained its first-quarter dividend at 830 won per share and will prioritize dividend stability while considering treasury stock buybacks based on corporate value, financial structure, growth investments, and foreign investors’ holdings.
Conclusion:
SK Telecom’s strategic shift towards AI investments and infrastructure development signifies a proactive approach to harnessing advanced technologies for sustainable growth. With a focus on leveraging telecom data and fostering global partnerships, SK Telecom is positioning itself as a formidable player in the evolving AI landscape, poised to capitalize on emerging opportunities and drive innovation in the market.
