SK Telecom rekindles overseas expansion
By Kim Yoo-chul
Staff reporter
SK Telecom has seen a faster transition of its global strategies by implementing target-driven plans to efficiently find new business models.
The corporate shift came after the nation's top mobile carrier failed to yield "satisfactory results" for its direct telecommunications investment in the United States, China and Vietnam.
SK Telecom was trying to boost its international profile by purchasing stakes in particular companies.
But its investment of some $400 million in Helio of the United States didn't pay off. SK also departed from China Unicom by selling back of its 3.8 stake. In Vietnam, the carrier has suspended additional investment in the joint venture, S-Fone.
"It's evident that SK Telecom is seeking some of our next revenue sources outside the peninsula. Inspired by the needs for detailed and fine-tuned strategies, we are shifting our global strategies to lift industrial growth," said Cindy Kang, a spokeswoman for SK Telecom.
The new phrase in representing SK Telecom's global strategy is industry productivity enhancement or IPE. This is based on applying communications technology to other industries for strengthened productivity.
Markets are still questioning whether IPE help boost overseas sales.
SK Telecom is competitive in the mobile solution businesses, but not strong enough to compete with solutions giants such as IBM and Cisco.
Despite uncertainties, SK Telecom, however, is reaping some initial results. On Tuesday, it signed an official contract with Malaysia's Packet One Networks to buy a 25.77 percent stake.
The Malaysian company is a unit of Green Packet and leads the Malaysian mobile WiMAX sector. Kang said the $100 million investment will pave the way for SK to secure a springboard for IPE businesses in Southeast Asian countries.
"The impact on the deal will be limited. We don’t see the agreement significantly boosting SK Telecom’s corporate value," said Yang Jong-in, an analyst at Korea Investment.
"But it is positive that SK Telecom got a foothold to better penetrate the highly lucrative Malaysian mobile wireless market. Meanwhile, SK Telecom could expand into the business-to-business field," Yang added.
The entry of SK Telecom comes at a crucial juncture for Packet One as the start-up WiMAX broadband operator looks to accelerate its network expansion to win more subscribers in Malaysia’s under-tapped broadband market.
WiMAX, which stands for worldwide interoperability for microwave access, is a high-speed wireless broadband technology.
Kang of SK Telecom said the company has been in further talks with leading mobile wireless players in the Southeast Asian region, though she declined to elaborate further.
"We regard the Malaysian deal as meaningful. To guarantee the sustainability of the transition in overseas strategies, SK Telecom is needed to strike strategic partnerships with leading corporations in developed countries," said a company executive, asking not to be identified.