TL;DR:
- SK Telecom (SKT) leads in AI among telcos, with ambitious AI goals.
- SKT’s AI pyramid strategy aims to achieve Won25 trillion ($19 billion) in AI revenues by 2028.
- SKT focuses on both domestic and international growth through “AI Infrastructure,” “AI Transformation,” and “AI Service.”
- SKT stands out by using AI to generate new revenues in both B2C and B2B sectors.
- SKT’s success is driven by internal innovation, strategic partnerships, and investments.
- They offer an “Enterprise Generative AI Service” and collaborate with Deutsche Telekom, Anthropic, and Meta for telco-specific LLMs.
- SKT’s X Caliber, a veterinary diagnostic service, is expanding globally.
- Telecoms should leverage assets like customer data and partnerships for AI revenue.
- Collaborations with entities like Anthropic and OpenAI offer growth opportunities.
- The enterprise AI space presents potential for telcos.
- SKT’s aggressive approach sets a precedent for the telco industry.
Main AI News:
In the ever-evolving landscape of telecommunications, SK Telecom (SKT) has emerged as a trailblazer, setting an exemplary standard in the realm of artificial intelligence (AI). According to GlobalData’s “Thematic Intelligence: Tech, Media, & Telecom Themes 2024” report, SKT stands atop the rankings among its telco counterparts in the AI theme, positioning itself as a true leader in the industry.
SKT’s unwavering commitment to AI innovation is poised to significantly reshape its future performance. The company has set audacious goals in the AI arena, encompassing generative AI and large language models. Announcing its ambitious AI pyramid strategy in the latter half of 2023, SKT aims to propel AI revenues to a staggering Won25 trillion ($19 billion) by 2028. This ambitious endeavor hinges on a three-pronged approach encompassing “AI Infrastructure,” “AI Transformation,” and “AI Service,” all while nurturing both domestic and international growth.
While AI adoption, including generative AI, garners the attention of telcos worldwide, SKT’s distinctive strategy sets it apart. While others primarily focus on internal adoption to enhance efficiency, reduce costs, and improve customer experiences, SKT’s vision extends beyond these parameters. The company has strategically harnessed AI technologies to cultivate new revenue streams, catering to both B2C and B2B segments, both domestically and globally.
The Catalyst: Innovation and Strategic Partnerships
SKT’s journey towards cultivating new revenue streams through AI is catalyzed by a potent combination of internal innovation, ecosystem partnerships, and strategic investments in existing solutions. The result is a diverse portfolio of AI and large language model-based solutions that cater to both Korean and global businesses.
For instance, SKT now offers its proprietary “Enterprise Generative AI Service,” underpinned by its very own “A.” LLM, Anthropic’s Claude LLM, OpenAI’s ChatGPT, and Korean-based Konan Technologies’ LLM. This service empowers companies to seamlessly integrate LLM functionality into their business workflows via a SaaS-based model, with tailor-made model recommendations for specific use cases.
Going Beyond Boundaries
SKT’s forward-looking approach extends its reach far beyond its domestic borders. The telecom giant has formed strategic alliances with industry titans such as Deutsche Telekom (DT), Anthropic, and Meta to develop a telco-specific LLM, designed to automate and bolster telco customer support. The monetization strategy involves white-labeling this product for other telcos, with a slated launch in the first half of 2024.
Generative AI and LLMs represent only one facet of SKT’s multi-pronged approach to monetizing AI for revenue augmentation. Take, for example, their innovative veterinary imaging diagnostic service, aptly named “X Caliber,” which offers AI-based diagnostics through a SaaS-based application. Originally launched in South Korea, this service has expanded its horizons and secured distribution deals with medical companies in Australia, Japan, and Singapore as of October 2023.
The Imperative for Telecoms
SKT’s pioneering foray into AI possesses certain advantages, including ownership of an AI-chip manufacturing business, which bolsters its AI data center operations. Moreover, its stronghold in the Korean market affords it an edge in developing Korean-language models and services, setting it apart from international competitors. However, other telcos need not replicate these specific advantages to commence their AI revenue journey.
The key lies in harnessing existing assets, such as customer data and enterprise relationships, to explore revenue-generating prospects. Collaborative ventures with entities like Anthropic and OpenAI to co-develop LLM capabilities and tailored use cases for specific markets could be a viable strategy for telcos looking to embark on their AI-driven growth trajectory.
Notably, the enterprise AI space remains ripe with potential, and investments in high-reward partners need not break the bank. SKT’s acquisition of a 20% stake in Konan Technologies for Won22.4 billion is a prime example, instantly granting them access to a company with 2,500 clients and 3,000 ongoing projects.
Conclusion:
SK Telecom’s ascendancy in the telco AI realm is a testament to its bold and aggressive approach. Rather than fixate solely on cost-cutting measures within existing businesses, SKT is leveraging its internal strengths while embracing a growth-oriented mindset. Through strategic partnerships and acquisitions, SKT is actively cultivating new business avenues both at home and on the global stage, setting a compelling precedent for telcos worldwide.
