SK Telecom to hive off technology unit from telecoms business

Park Jung-ho SK Telecom.jpg

SK Telecom is splitting into two companies, with an technology investment unit to be spun off in November.

Telecoms activities, including digital infrastructure and artificial intelligence (AI) will remain in SK Telecom, with semiconductors plus information and communication technologies going to a new entity, SKT Technologies.

“The horizontal spin-off will mark the beginning of a new era for SK Telecom,” said Park Jung-ho (pictured), CEO of SK Telecom, which will keep its name. “We will make best efforts to contribute to the advancement of the ICT ecosystem by achieving new and sustainable growth.”

The split — 60% to SK Telecom and 40% to the new entity — needs approval of shareholders at a meeting on 12 October. If they agree, the company will divide on 1 November. Both companies will be listed.

The company said: “The new entity will actively pursue mergers and acquisitions in the global semiconductor market. It plans to build a semiconductor ecosystem with SK Hynix by investing in innovative technologies including future semiconductor technologies.”

As the surviving entity, SK Telecom “plans to establish itself as an AI and digital infrastructure company by maintaining its growth in fixed and wireless telecommunication and home media based on its leadership in the 5G market”, it said.

“Building on its AI and digital infrastructure technology assets, the surviving entity will increase its investment in data centre and mobile edge computing cloud business to secure new sources of revenue.”

The SK Telecom side of the split will include Techmaker, a technology joint venture between it and Deutsche Telekom. The two companies set up a 5G joint venture last year.