SK Telecom to focus on AI, air mobility this year

SK Telecom's Q4 net profit declined due to operating costs while revenue and annual profit increased. The company plans to focus on expanding its AI business this year.

SK Telecom, Korea's leading mobile carrier, said Monday that its fourth-quarter net profit slumped 16.2 percent on year to 187.4 billion won ($141.7 million) due to operating costs.

Operating profit for the October-December period rose 16.7 percent on year to 297.1 billion won, and revenue increased 3 percent to 4.52 trillion won.

The telecom giant reported a net profit of 1.15 trillion won for all of 2023, which was up 20.9 percent from a year earlier.

Annual operating profit reached 1.75 trillion won compared to 1.61 trillion won from the previous year. Annual sales rose 1.8 percent to 17.6 trillion won.

The company said its fourth-quarter net profit had decreased on year due to a base effect from a concentration of business spending during the period, but its AI business did post solid yearly earnings.

SK Telecom's AI infrastructure division saw data center sales jump 30 percent on year last year.

The company said it plans to focus on building a new AI facility this year and work to break into the global market amid growing demand for next-generation data centers.

SK Telecom also plans to expand its global telco-specific large language model business.

Sales in the enterprise division, which encompasses Business-to-Business items, gained 8.1 percent on-year to 1.63 trillion won last year.

In particular, the Business-to-Business cloud service saw sales advance more than 36.6 percent to 146 billion won in 2023.

The company said it will work to gain a foothold in the global urban air mobility and AI health care markets in cooperation with U.S. companies this year, and that it will strengthen its AI service businesses, applying AI to ifland, its metaverse platform, and upgrading A, its conversational AI app.

Regarding the mainstay telecom unit, Chief Financial Officer Kim Yang-sup said in a conference call that growth of 5G network subscribers and sales in the wireless business have been slowing.

SK Telecom had 15.7 million 5G subscriptions in the fourth quarter compared to 15.1 million in the previous quarter.

SK Telecom set its 2024 sales target to 17.9 trillion won, an on-year increase of two percent.

The mobile carrier also said it has finalized a 300 billion won stock buyback program and plans to hand out a cash dividend of 1,050 won per share to its fourth-quarter stockholders.

BY LEE JAE-LIM, YONHAP [lee.jaelim@joongang.co.kr]