SK Telecom looks beyond mobile telephony
By Kim Tong-hyung
SK Telecom, having secured undisputed status as the country's biggest mobile-phone carrier, is perhaps Korea's answer to Verizon Wireless.
But judging by the company's new business strategies, one would assume that SK Telecom wants to be a Cisco too, as it looks beyond its traditional telecommunications boundaries in an attempt to keep growth alive for the next decade and further.
Since taking the management helm at the start of 2009, SK Telecom CEO Jung Man-won has been pushing an initiative dubbed as ``Industry Productivity Enhancement (IPE),'' which is aimed at tapping into new opportunities across the industries of retail, automotives, construction, logistics, finance, education and healthcare.
SK Telecom hopes that its technologies and experience in data services will allow it to provide value-added consumer products in different markets, while also offering cost-effective business solutions for corporate and government clients.
SK Telecom hopes that its IPE businesses will generate 20 trillion won ($17.6 billion) in revenue by 2020, with more than half it coming from foreign markets.
The company is even relocating the headquarters of its content and convergence unit, which is among its three ``company-in-company'' (CIC) business divisions, to China to jolt its global push.
It would be critical for SK Telecom to secure revenue sources beyond mobile telephony, as the country now has more handsets than heads and carriers are facing increasing pressure by the government and civic groups to lower the prices of their voice services.
SK Telecom's efforts to create new revenue sources appear most visibly in its advancement into credit card services. The company now owns 49 percent of Hana Card, which it jointly operates with the Hana Financial Group, and is vowing to usher in the era of the ``mobile wallet,'' allowing users to buy products with their chip-embedded handsets.
``Our IPE businesses are a critical part in our efforts to emerge as a global player in information and communication technology (ICT) services,'' said Jung in an e-mailed statement to The Korea Times.
``IPE is not about us advancing and winning the competition in other markets. The goal is to provide technologies and business solutions that allow the traditional players in each industry to improve productivity and effectively manage costs, resulting in a win-win relationship between us and them.''
It's not that SK Telecom intends to compromise its dominance in the wireless market. The telecommunications industry is in a transition period, with the market flooded with intriguing devices such as the Apple iPhone and Samsung Electronics' Omnia II that are making smartphones conventional.
KT, the local provider of iPhone, has so far benefited most from the smartphone boom, but SK Telecom remains the player to beat, as it responds with a slew of devices powered by the Google-backed Android operating system.
The company is also looking to provide a larger variety of monthly data plans, including options that will allow customers to use their mobile Internet allowance over a variety of devices, including phones, portable multimedia players and laptop computers.
SK Telecom's lack of a Wi-Fi network has been mentioned as its weakness in the smartphone wars, but the company is now planning to add 10,000 Wi-Fi ``hot zones'' in major transport areas, leisure districts, shopping malls and theaters. The Wi-Fi areas will be opened not only to SK Telecom subscribers, but also the users of rival carriers KT and LG Telecom.