SK Telecom announced on the 8th that it recorded a revenue of 4.4746 trillion won, an operating profit of 498.5 billion won, and a net profit of 361.9 billion won for the first quarter of 2024.

The revenue increased by 2.3% year-on-year due to balanced growth in the wired and wireless businesses of SKT and SK Broadband, while operating profit saw a 0.8% increase, maintaining a similar level to the previous year. Net profit jumped by 19.6% due to increases in non-operating income related to investment assets.

A noteworthy aspect of the first-quarter results was the continuous growth of the enterprise business, solidifying its position as a significant growth driver outside of telecommunications, with enterprise AI revenue also seeing meaningful growth of over 10% compared to the same period last year.

SKT plans to accelerate the execution of its AI pyramid strategy* this year, focusing on generating concrete outcomes in three core areas: AI infrastructure, AIX, and AI services.

*AI Pyramid Strategy: A strategy that groups the development of AI technology and the creation of AI services into a pyramid model characterized by self-strengthening (自强) and collaborative (協力) alliances, aimed at fostering close relationships with customers.

In the AI infrastructure area, the foundation of the AI business, revenue from the data center business saw a remarkable 26% increase year-on-year, thanks to a sustained rise in operational rates. SKT intends to evolve and develop its data center business into AI data center services that are experiencing explosive demand.

To achieve this, SKT is preparing an AI data center solution package that consolidates the capabilities of its group companies, including SK Hynix, SK Broadband, SK Enmove, and Sapion, and is also pursuing global collaborations with US server manufacturer Supermicro and GPU cloud company Lambda.

Regarding the development of a telco LLM (large language model) specialized for the telecommunications industry, SKT aims to complete the Korean version by June and push for commercialization. The telco LLM will be applied in customer service, infrastructure management, marketing/distribution channels, as well as in-house tasks such as legal affairs and HR, aiming for improvements in service quality, cost reduction, and operational efficiency.

In collaboration with GTAA (Global Telco AI Alliance) member companies such as Deutsche Telekom, e& in the UAE, Singtel in Singapore, and SoftBank in Japan, SKT is also developing a global telco LLM. With its vast multilingual telco data covering over 1.3 billion subscribers across 50 countries, enhanced localized services are anticipated through this advanced multilingual telco LLM.

In the mobile sector of the AIX segment, as of the end of Q1, SKT secured 15.93 million 5G subscribers, 9.59 million paid broadcasting subscribers, and 6.99 million high-speed internet subscribers, continuing to drive net subscriber growth in its mature wired and wireless business.

The enterprise business revenue grew by approximately 10% year-on-year, with cloud revenue increasing by about 40% year-on-year, driving overall enterprise growth. In the enterprise AI space, the plan is to cultivate innovative products like the recently launched AI simultaneous interpretation solution, ‘TransTalker’, as the focal point of its B2B business.

In the AI service sector, the A-dot application, which has gained significant favor among iPhone users for call recording, summarization, and real-time interpretation services, expanded availability to Android devices starting in April. A-dot intends to continuously add killer services and evolve into a genuine AI personal assistant.

The subscription service T Universe has surpassed 2.6 million monthly active users as of the end of Q1, thanks to the YouTube Premium package. SKT plans to develop T Universe into a ‘Subscription Marketplace’ during the first half of the year, aiming to expand partnership scopes and solidify its position as a leading subscription service in Korea.

Meanwhile, SKT recently announced its shareholder return policy for the next three years, pledging to return over 50% of adjusted net profits based on consolidated standards. This policy abolishes the upper limit on the guideline for share return funds, improving conditions for sharing subsidiary performance with shareholders based on consolidated results rather than separate performance. For Q1, the dividend per share remained the same as last year’s Q1 at 830 won.

SKT CFO Kim Yang-seob stated, “We have reflected our commitment to greater shareholder returns in the new policy according to performance improvement trends,” adding, “We will further solidify our robust wired and wireless foundation and focus on improving corporate value through profitability, efficiency, and tangible AI outcomes.”

Written by Lee Sang-jin daedusj@autodiary.kr