SK telecom reports solid Q3 earnings on B2B sales

[Courtesy of SK telecom]

SK telecom announced robust financial results for the third quarter of 2023, propelled by its thriving business-to-business (B2B) activities that include Internet Data Centers (IDC) and cloud services.

The company revealed on Wednesday that it had achieved third-quarter revenues of 4.4 trillion ($3.37 billion) and an operating profit of 498 billion won. Compared to a year ago, revenues increased by 1.4 percent and operating profit surged by 7 percent.

Sales from the company’s cash cow mobile business totaled 2.65 trillion won, up 1.1 percent on-year. This growth was attributed to the expansion of its 5G subscriber base, which hit a milestone of 15 million subscribers, as well as the positive performance of the company’s roaming services. The 5G subscriber ratio reached 66 percent, marking a 3-percentage point increase from the previous quarter.

In the enterprise sector, which includes cloud services and data centers, SK telecom recorded revenues of 400.6 billion won, up 5.8 percent on-year. Notably, data center revenues jumped by 32.5 percent on-year to 53.4 billion won, while cloud revenues were up by 38.7 percent to 36.2 billion won.

“The sustained growth in new data center operations and the stability of the Cloud Management Service Provider (MSP) business, which has consistently generated more than 90 percent of revenue for six consecutive quarters, have established a reliable revenue model,” the company said.

SK telecom is committed to its “AI Pyramid Strategy,” which consists of three key growth areas: AI infrastructure, AIX, and AI services. SK telecom CEO Ryu Young-sang set ambitious targets in September 2023 that aimed to increase SK telecom’s annual revenue to 25 trillion won by 2028 and expand the AI business’s revenue share from 9 percent in 2022 to 36 percent by 2028.

SK telecom’s AI chip developer, Sapeon, also plans to release its next-generation chip, the ‘X330,’ within the year. Additionally, SK telecom’s AI technology brand, ‘A.X,’ will be further developed, with plans to introduce an AI platform that effectively uses a large language model (LLM) specialized for telcos in the first half of 2024.