Korean telecom giants pivot to AI and cloud services

[Courtesy of SK telecom Co.]

South Korea’s top mobile carriers report strong sales to collectively achieve an operating income of 1 trillion won ($732 million) in the second quarter of 2024. In terms of operating profit, however, profitability among KT Corp and LG Uplus Corp. has stagnated. In response, the companies are increasingly focusing on new non-telecom sectors, such as cloud services and artificial intelligence (AI).

The telecom giants saw a 10 percent growth in business-to-business (B2B) sales, including data centers and cloud services, in April to June 2024.

SK telecom Co. reported 59.5 billion won in data center sales and 39.6 billion won in cloud sales for the period, with the former increasing by 20.5 percent on year. The company has invested in global partnerships, with a recent $200 million in U.S.-based AI data center solution company Smart Global Holdings Inc. in July 2024.

KT said its cloud affiliate KT Cloud Co. generated 180.1 billion won in sales, marking a 17.1 percent increase thanks to higher demand for data centers. KT’s five new businesses, including AI contact centers (AICC) and smart mobility, earned 96 billion won in sales, up 10.3 percent from a year ago. LG Uplus reported 91.7 billion won in data center sales, up 15 percent, and 130.8 billion won in solution revenue, a 2.7 percent increase.