SK Telecom Reports Strong Third Quarter Earnings, Focusing on AI and Capex Initiatives

South Korea’s leading telecommunications company, SK Telecom (SKT), has announced robust financial results for the third quarter of 2023, showcasing 1.4 percent increase in revenue to KRW 4.403 trillion. The company’s operating income increased by 7 percent to reach KRW 498.0 billion, with a net income of KRW 308.2 billion.
SK Telecom 5G growthSK Telecom’s success in business can be attributed to sustained growth in key business areas, particularly in the telecommunications market, and the enterprise sector which continued to drive overall expansion.

A notable highlight is the rapid growth of SKT’s data center and cloud business revenues, which surged by 32.5 percent and 38.7 percent year-on-year, respectively.

SK Telecom’s Capex touched KRW 448 billion in Q3 2023 as compared with KRW 458 billion in Q3 2022.

As of the end of September 2023, SKT had a total of 15.15 million 5G subscribers, and SK Broadband secured a total of 9.52 million pay TV subscribers and 6.87 million broadband subscribers. Going forward, SKT will further solidify its competitiveness by using AI to conduct marketing, build networks and enhance network operational efficiency.

AI Pyramid Strategy Unveiled, Setting the Stage for Global AI Dominance

In September 2023, SK Telecom unveiled its ambitious vision to become a global AI company, introducing the AI Pyramid Strategy. This strategy aims to strengthen SKT’s competitiveness and foster global partnerships, focusing on three key areas: AI Infrastructure, AI Transformation (AIX), and AI Service.

Under the AI Infrastructure segment, SKT is set to enhance capabilities in AI data centers, AI semiconductors, and multi-large language models (LLMs). The data center business saw impressive growth, with a 32.5 percent increase in revenue, driven by higher utilization rates and increased demand for cloud services.

SAPEON, SKT’s AI semiconductor subsidiary, is gearing up to release its next-generation inference AI chip, ‘X330,’ boasting twice the computing power of the latest market models and 1.3 times more power efficiency. The company plans to continue advancing its AI technology brand, ‘A.X,’ with the establishment of Global AI Platform Corporation in the U.S.

In the AIX segment, SK Telecom is leveraging AI to innovate its fixed and mobile telecommunications business, capitalizing on its solid customer base. With 15.15 million 5G subscribers and continued growth in cloud business revenue (38.7 percent increase), SKT is strategically using AI to enhance marketing, network building, and operational efficiency.

Expanding AI Innovations in Mobility and Healthcare

SK Telecom is making significant strides in AI-powered innovations, expanding into mobility and healthcare. The company has collaborated with Joby Aviation to participate in the K-UAM Grand Challenge, aiming for the first commercialization of Urban Air Mobility (UAM) service in Korea by 2025.

Furthermore, SKT’s AI-based veterinary X-ray analysis solution, ‘X Caliber,’ launched a year ago, is gaining traction with around 300 veterinary clinics nationwide. Through a partnership with Anicom Holdings, the largest provider of pet insurance in Japan, SK Telecom is poised to take ‘X Caliber’ global.

AI Service Evolution and Metaverse Expansion

In the AI Service segment, SKT’s ‘A.’ personal AI assistant service, launched in September, is evolving rapidly with features like call recording, call summary, and sleep management, receiving positive customer feedback. The company plans to add real-time call interpretation services to ‘A.’ and expand its presence in the AI service market by entering overseas markets through collaboration with the Global Telco AI Alliance.

SKT’s metaverse service, ‘ifland,’ has garnered nearly 50 percent of monthly active users (MAU) from overseas, and strategic partnerships with global players like Deutsche Telekom and T-Mobile US are underway. The recent economic system introduced in October 2023 aims to expand the metaverse platform, creating a virtuous ecosystem and driving monetization.

Kim Jin-won, CFO of SKT, emphasized, “With our AI Pyramid Strategy, we will strive to ensure that SKT’s growth as a global AI company leads to the maximization of corporate and shareholder value.” The company’s commitment to AI and capital expenditure initiatives positions SK Telecom for continued success in the rapidly evolving technology landscape.