SK becoming desperate for global breakthrough
By Kim Yoo-chul
SK Telecom has struck out in its previous three attempts to establish a meaningful presence in international business.
The country’s largest mobile phone carrier is confident that its multi-million dollar investment in the American online video service, Viki, is better positioned to yield successful results, but market observers remain skeptical.
SK Planet, the carrier’s content and online commerce unit, recently confirmed plans to acquire a share in Viki as it attempts to tap into America’s lucrative Internet content market.
``SK Planet and Viki may combine for a productive partnership and the risks are hedged as other investors are involved,’’ said a SK Telecom official.
``We are renewing our approach to international markets and we believe we were too passive in the past.’’ SK Planet is entirely owned by SK Telecom.
SK was forced to pull back from its investments in the mobile-phone markets of Vietnam and China after years of struggling. Helio, its wireless joint venture with U.S. carrier, Virgin Mobile, also flopped.
SK Planet said it will join BBC Worldwide, Greylock Partners and others investors in a fund-raising campaign by Viki to the tune of $20 million.
ViKi acquires the rights to television shows and puts them on its channels within 24 hours of their being broadcast, with its volunteers subtitling the shows in different languages.
The U.S. firm is also a strategic partner of Samsung Southeast Asia, which develops smartphone and touchscreen tablet applications for use on the Google-backed Android mobile operating system. It remains to be seen whether SK Telecom’s involvement with Viki could eventually enrich its content platform.
``With Viki, SK Planet is attempting to see more business opportunities in previously-untapped territories. We will continue to find and advance into new businesses,’’ SK Planet said in a press release.
The investment by SK Planet allows SK Telecom the right to name one of the five members of Viki’s executive board and the company has settled on senior executive Park Yong-kil.
Despite its efforts to diversify its business lineup, SK Telecom continues to rely heavily on its wireless business.
Investors were worrying over the company’s losing business momentum in the heavily-regulated telecommunications market with a lack of international revenue sources
SK Planet is targeting sales of 2.5 trillion won in 2014. Its chief executive Seo Jin-woo said it is considering mergers and acquisitions (M&A) for effective external growth, though he declined to comment further.
``But the one thing SK Planet needs is technology. It’s meaningless to buy a company with just the aim of increasing the number of customers,’’ said Seo.