SK Telecom’s AI focus appears to be paying off

• SK Telecom has revamped itself for the AI era
• It has been investing in AI infrastructure and the development of AI-centric services
• The company’s full year 2024 financial results suggest the strategy is good for business
• But SK Telecom is expecting a dip in total revenues this year

Having rebranded itself as an ‘AI company’ and revamped its corporate structure to capitalise on both AI and communications services opportunities, SK Telecom’s bold new strategy appears to be paying off, with its full year 2024 revenues and operating profits all headed in the right direction. 

SK Telecom (SKT) reported full year consolidated revenues (including SK Broadband and other smaller subsidiaries) of 17.94tn Korean won (KRW) ($12.34bn), up by 1.9%, and an operating profit of KRW 1.82tn ($1.25bn), up by 4%. Its full year capital expenditure (capex) stood at KRW 2.39tn ($1.64bn), down by 12.7% compared with 2023’s total: Its capex-to-revenues ratio in 2024 was just 13.3%, lower than most telcos.

On a non-consolidated basis – not including SK Broadband and other subsidiaries – SK Telecom reported full year revenues of KRW 12.77tn ($8.78bn), up by 1.5%, and an operating profit of KRW 1.52tn ($1.05bn), up by 4.6%. 

SK Telecom ended 2024 with 31.8 million mobile customers, of which 16.9 million are 5G customers. SK Broadband has 7.16 million fibre broadband customers and 9.6 million pay-TV customers (6.8 million IPTV users and 2.8 million cable TV users). 

Traditional telecom services are still important to SK Telecom, but the company’s strategic focus is to “actively pursue the monetisation of AI business” based on the development and growth of AI-centric services, both domestically and overseas. 

To that end, it unveiled its AI infrastructure superhighway plan in early November last year, with a focus on building out a national network of regional AI datacentres, enhancing that with edge AI infrastructure, and launching a GPU-as-a-service (GPUaaS) offering for enterprise and government customers – something it achieved in January. 

While the ‘superhighway’ development is still at a relatively early stage, SKT is already offering (or about to launch) AI-centric services through its four new AI divisions: Adot (A.) is SKT’s domestic personal AI agent, which now has 8.3 million users in South Korea, up from 3.2 million at the end of 2023; GPAA (global personal AI agent), which has been developed in partnership with Perplexity, is set to launch in the US within the next few months; AIX (AI transformation) is the enterprise and systems integration services unit that will engage with business users in South Korea and overseas; and AIDC (AI datacentre), which includes the already launched GPUaaS offering. 

SKT says its “AI-related revenue grew by 19% year on year” in 2024 but didn’t provide an actual number to go with that stat, though it did note that the AIDC division increased by 13.1% to hit a total of KRW 397.4bn ($273m), while the AIX division’s sales grew by 32% to KRW 193bn ($133m), “driven by the expansion of its AI cloud business and robust performance of AI B2B solutions, including AI Contact Center (AICC) and Vision AI”.

“We strengthened our competitiveness in the telecommunications sector and laid the foundation for our transformation into an AI company,” stated SKT’s CFO, Kim Yang-seob. “In 2025, we will continue to pioneer the AI era through determination and innovation, further solidifying our corporate value,” he added. 

But it seems the company isn’t expecting a bump in revenues this year from its new strategy, as SKT expects 2025 full year revenues to total KRW 17.8tn, down slightly compared with last year, though it expects its operating profit to rise.  

- Ray Le Maistre, Editorial Director, TelecomTV