SKT facing unprecedented crisis, CEO warnsSKT facing unprecedented crisis, CEO warns

SK Telecom, the biggest South Korean mobile operator, faces "an unprecedented crisis" in 2025, CEO Ryu Young-sang has warned.

Ryu said in a New Year's address to staff Thursday that while the company had laid the foundations of its AI business, competition for AI supremacy would only accelerate.

He painted a bleak picture of the business environment.

"We expect to face an unprecedented crisis this year," he said. "The market outlook is dark due to geopolitical issues such as global economic instability, and the domestic economy will also have various difficulties, including a sluggish domestic economy," he said.

Though describing local conditions, Ryu's words might also resonate with other telecom leaders, many of whom are also dogged by tepid economic growth and political uncertainty as well as the declining value of their legacy businesses.

Ryu said SKT last year had stabilized its telecom businesses through operations improvements and had begun building out its "AI pyramid" strategy, laying the foundation for its future as a global AI company.

Strengthen competitiveness

He said the company saw new opportunities and market growth from AI-based innovation and from the integration of AI and communication, but cautioned that "competition for AI technology supremacy and investment will accelerate."

He called on staff to "strengthen our competitiveness" and deliver "meaningful results in all areas of the AI value chain."

SKT's ambitious AI strategy ranges from its newly-announced AI Infrastructure Superhighway – encompassing AI data centers, GPUaaS and edge AI – to AI transformation and personal AI agents.

The company's improved financial performance and aggressive push into AI have helped lift its stock 12% in the past year and 5% since Ryu began his three-year term as CEO last March.

But it's still widely considered to be undervalued, with a market cap of just 12.1 trillion Korean won (US$8.2 billion), dwarfed by regional rivals such as Singtel, worth S$51 billion ($37 billion) and Chunghwa Telecom, valued at 954 billion New Taiwan dollars ($29 billion).