SK Telecom to split into AI and ICT investment cos
Korea's SK Telecom is to split into two companies: an AI and digital infraco, and a division tentatively called the ICT Investment Company.
With a focus on expanding its cloud, data centre and subscription-based services, SKT's surviving company will continue to create new revenue streams in 5G – SKT currently counts 6.35 million 5G subscribers as of February 2021 and enjoys a 46.5% market share in Korea. It will also invest in "new and innovative technologies" to boost the development of the ICT industry.
The spin-off company will "actively carry out diverse investment activities", investing in both domestic and overseas semiconductor companies to accelerate the growth of the semiconductor industry.
In addition to investments, this division will also pursue acquisitions. In fact, SKT highlighted that SK Hynix acquired Kioxia Corporation (formerly Toshiba Memory Corporation) and Intel’s NAND business, adding that future activities "will be proceeded in a swifter manner".
The "horizontal spin-off" intends to increase enterprise and shareholder value, with SKT saying it expects the separation will "create an opportunity for the telecommunications, semiconductor and new ICT businesses to be properly valued in the market to deliver greater value to shareholders".
Confirming the independence of the two operations, SKT said both companies will build a management structure "fit for the business to facilitate future growth and provide investors with two separate investment options".
In a statement, the telco said: "SKT plans to complete the spin-off within this year after going through necessary procedures including decision by board of directors and general meeting of shareholders."
SKT is currently active in telecommunications, semiconductors, AI, security, commerce and mobility. It said the operations that will fall under the new ICT Investment co – .e. media, security and commerce – have "grown rapidly" and accounted for 24% of SKT's total operating income in 2020
On its subsidiaries, SKT said it is "actively promoting" IPOs for One Store and ADT Caps. Further, ADT Caps, 11st and T Map Mobility will be repositioned to create "life platform companies", offering services linked in convenience in daily life.