SK Telecom focuses on monetization of AI services

SK Telecom's office in Euljiro, Seoul / Courtesy of SK Telecom AI data center biz shows stable revenue growth By Nam Hyun-woo SK Telecom said Wednesday it will focus on ways to monetize its artificial intelligence (AI) businesses, highlighting that its data center business showed noticeable growth in the third quarter of this year. SK Telecom announced that its consolidated operating profit for the third quarter stood at 533.3 billion won ($382.

3 million), up 7.1 percent from a year earlier. The consolidated sales also improved by 2.



9 percent to 4.53 trillion won, boosted by stable growth across its business divisions, the company said. For the past several years, SK Telecom has been making efforts to transform from a telecom service provider to an AI company.

This year, the company has been concentrating its efforts on monetizing AI. Among its AI businesses, SK Telecom said it expects quick monetization from AI data centers, business-to-business services and business-to-consumer services, adding that it plans to concentrate on these areas for its fast transition into an AI company. “The market is now experiencing a moment with AI-triggered massive demand for data centers far outweighing supply,” SK Telecom Chief Financial Officer Kim Yang-seob said during the company’s earnings call, adding that approximately 80 percent of data centers under construction are already rented.

“We estimate the most prompt outcome will likely come from our data center business.” The company has set its goal of achieving 30 trillion won in sales from its AI business by 2030, accounting for over 35 percent of the company's total yearly revenue — but has yet to reveal its current earnings status. SK Telecom did not provide total earnings from its AI businesses during Wednesday's earnings call as well, but reported that its data center business revenue grew by 14 percent year-on-year to reach 60.

9 billion won, as data centers showed improved operation rates. SK Telecom said it is scheduled to open an AI-specific data center powered by Nvidia graphics processing units (GPUs) in Seoul within December, and initiate a subscription-based cloud GPU service by the end of this year. The company stressed that the cloud GPU service is anticipated to have a competitive edge as it offers greater accessibility to companies that cannot afford pricey GPUs.

A model tests SK Telecom's AI service A. (A dot) in this promotional photo released Aug. 26.

Courtesy of SK Telecom In the business-to-consumer sector, SK Telecom said its AI personal assistant service, A. (A dot), surpassed 5.5 million users as of the end of September.

A dot is now provided for SK Telecom subscribers for free, but the company dropped hints at developing this service into a subscription-based model. “The business-to-consumer AI service market has been dominated by platform companies, which have been relying on ad-based business models for profits,” Kim said. “However, establishing AI infrastructure and data centers requires enormous investments and incurs massive energy costs due to power consumption, which can be hard to sustain solely on ad revenue.

” “This shift opens up new opportunities for telecom companies with established subscription models. Given our successful track record with a subscription-based business model, we will be able to showcase an advance in our A dot service.” In its flagship telecom business, SK Telecom said the number of its 5G subscribers reached 1.

66 million as of September, accounting for 73 percent of the company’s total subscribers. The number of customers who used roaming services also grew 23 percent year-on-year to reach 1.36 million.

Its business-to-business segment also showed a stable growth trajectory, achieving an 8 percent year-on-year growth in sales, buoyed by the data center and cloud service businesses, the company said..