New telco AI group aiming for global leadership, says SKT

SK Telecom, one of the telecom sector's most ambitious AI players, says its new global alliance can help operators develop their own AI platforms and gain global AI leadership.

The company announced the formation of the Global Telco AI Alliance with Singtel, Deutsche Telekom and e& two weeks ago.

The initiative has high-level backing from the four members, with the launch attended by the CEOs of SK Telecom, DT and Singtel, and DT's innovation and technology board member.

SKT CFO Jinwon Kim said on an earnings call Tuesday that the alliance was aimed at building business collaboration in developing multilingual large language models (LLMs) "to gain AI leadership in the global market."

Jeong Seok-geun, head of global AI tech business for the Korean telco, said its experience in AI business and technology would help it lead the alliance to develop economies of scale in AI.

He said LLMs were currently dominated by global tech giants, which means "telcos are struggling to secure LLM-related technology."

"SK Telecom has been making investments in AI for the past couple of years, so we believe that we can lead this particular alliance with global telcos so that we can gain economies of scale," Jeong said.

Telco AI platform

"By doing so we can strengthen the negotiating power of the telcos as part of the alliance, and we can use our own LLM technology to build AI platforms where global telcos develop LLM technologies together."

Jeong said operators would first apply generative AI in their own processes such as marketing, network management and outsourcing.

He also said that by banding together, telecom operators could avoid the mistakes of the past, where the industry had ceded strategic businesses to rivals during a major technology shift.

"In preparation for this new era of generative AI we are taking action preemptively so that we can utilize AI for our business enhancement," Jeong said.

Jeong said SKT was in discussion with the other alliance members on joint investments and also planned to invite other telcos to join the group.

SKT's current AI-related business includes its A. chat service and its Ifland metaverse platform, which has clocked 4.2 million monthly active users, of which 30% are outside Korea.

Despite the growth in its non-core businesses the company reported flat second-quarter revenue, earnings and operating income.

Its best-performing segment was enterprise, which grew 9.2%, including a 68% increase in cloud revenue.

SK Telecom's stock fell 0.64% on the KRX Tuesday.

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— Robert Clark, contributing editor, special to Light Reading