SKT earnings fuelled by AI as it plots further products in 2024

SK Telecom (SKT), South Korea's biggest mobile operator, boosted operating profit by 17% in Q4, powered by AI-related growth and lower costs.

In its regulatory filing the company said sales for the quarter rose 3% to 4.53 trillion Korean won (US$3.4 billion dollars), with core MNO revenue up just 0.9% but with cloud and enterprise sales advancing strongly.

The biggest revenue surge came in data center and cloud on the back of AI demand, the company said. Full-year data center revenue rose 30% to 202 billion Korean won (US$150 million), while cloud sales spiked 37% to KRW146 billion ($109 million).

Over the full-year, net earnings rose 21% to KRW1.15 trillion ($860 million) and operating profit was up 8.8% on just 1.8% higher revenue. The company also kept a lid on costs, with opex nearly a percentage point below revenue growth, while capex was down 15.8% for the quarter and 9.6% for the full year.

SKT has set a revenue target of KRW17.9 trillion ($13.4 billion) for 2024, roughly 2% above 2023, CFO Kim Yang-sup said. With 5G accounting for two-thirds of mobile subscriptions, he said growth from the MNO business was inevitably slowing down.

Enhanced experience

He said the operator aimed to incorporate AI into its mobile and broadband offerings to optimize products and ensure high-quality customer service that would enhance customer experience.

The prime example was the AI assistant A. (known as A-dot), which had attracted 3.4 million subs since launch last September through functions including call summary, real-time interpretation and playlist creation.

"We believe that the success of A. is the result of continued effort to deliver value to customers by offering diverse useful services and features such as call recording and summary and sleep management," Kim said.

SKT is also developing telco-specific services using its large telco datasets, working with telco partners DT, Singtel and e&. "It is our target to release commercial features that can be applied for AI contact centers and telco agents in the first half of this year," Kim said.

"We're currently working on commercializing AI tools that will effectively support localization and advancement of diverse telco-specific services through our own efforts and in cooperation with external partners," he added.

The company is still weighing a possible IPO for SK Broadband, which contains the SKT data center and media business, but has set no timetable on it.
SK Telecom's stock on the KRX closed 0.4% higher Monday.