SK Telecom (SKT) has outlined plans to split off its mobility business unit and ultimately bring it into a new joint venture (JV) with ride-hailing service Uber.

In a first step, SKT intends to form a new company called T Map Mobility Co. Ltd with effect from December 29, subject to shareholder approval.

The new company will take responsibility for existing services such as T Map, T Map Taxi, T Map Auto, T Map Public Transportation and T Map Parking.

Figure 1: Finding your ride: T Map Taxi is already the biggest ride-hailing app in South Korea.
(Source: Ryoji Iwata on Unsplash)

SKT noted that T Map Mobility is currently valued at approximately KRW1 trillion (US$873 million), and is expected to be worth KRW4.5 trillion ($3.9 billion) by 2025.

The operator then intends to bring T Map Mobility into a new joint venture with Uber in the first half of 2021. SKT said Uber will invest around $50 million in T Map Mobility and then $100 million in the joint venture.

According to the The Korea Herald, Uber will own 51% of the JV and SKT 49%. SKT said it is also open to investment from external partners.

Flying high

SKT indicated that the strategy is designed to increase its competitiveness in the growth area of digital mobility services such as taxi-hailing and parking.

It said mobility will now become a further core business area alongside mobile communications, media, security and commerce.

The operator claims T Map is already the largest mobility platform in South Korea, with around 13 million monthly active users, while T Map Taxi is the second-largest taxi hailing service with 200,000 registered drivers and 750,000 monthly active users.

T Map Mobility will focus on four key areas: