Lee Gyu-lee is a business writer at The Korea Times, focusing primarily on IT & telecommunications, the Ministry of Trade, Industry and Energy and KOTRA. Prior to this, she has covered a wide range of cultural news, from film, television and K-pop to lifestyle and fashion.
Telecoms see AI businesses gain traction in Q2
A screen shows SK Telecom's artificial intelligence (AI) service. Courtesy of SK Telecom
By Lee Gyu-lee
AIDC, cloud, AI transformation businesses grow despite sluggish traditional telecom operations
Major telecom operators are seeing early results from their push into artificial intelligence (AI), with AI data centers (AIDC), cloud and AI transformation businesses posting growth in the second quarter even as traditional telecom operations remained largely stagnant.
SK Telecom reported the sharpest growth in its AI infrastructure business. Its second-quarter revenue rose 0.5 percent year-on-year to 4.3591 trillion won ($3.08 billion), while operating profit jumped 67.3 percent to 566 billion won. The profit increase was partly due to the absence of one-off costs from last year’s hacking incident.
Despite the company’s marginal growth in overall revenue, its AIDC business surged 92.5 percent year-on-year to 136.2 billion won this quarter. It attributed the growth to expanded data center operations and rising demand for high-performance computing infrastructure as generative AI adoption accelerates.
The company established a new company, SK Hyper, late last month to oversee AIDC business development and plans to invest 750 billion won through 2030. It aims to build out 5 gigawatts of AIDC capacity by 2029, starting with a gigawatt-scale cluster in Ulsan.
KT, which announced its second-quarter results Wednesday, posted 6.6799 trillion won in revenue, down 10.1 percent from a year earlier, while operating profit fell 36.1 percent to 648.3 billion won, largely due to the impact of one-off real estate development gains recorded last year.
However, its AI transformation (AX) business, which encompasses AI and cloud services, bucked the broader decline, with revenue rising 22.3 percent year-on-year.
KT CEO Park Yoon-young inspects AI infrastructure and related technology at the company's AI Innovation Center in Yangcheon District, Seoul, Thursday. Courtesy of KT
The company said growth was driven by rising demand for AI adoption in the financial sector and expansion at its cloud and data center arm, KT Cloud, which posted double-digit growth.
KT won 22 AX projects from financial institutions in the first half and is involved in building or operating AI contact centers for four of the country’s five major commercial banks.
The company said it plans to make AX infrastructure and solutions a key growth engine, more than doubling AX revenue by 2028. It also aims to position itself as a hub connecting AX services across Asia, while securing an additional gigawatt of AIDC capacity and 90 terabits per second of subsea cable capacity by 2031.
Meanwhile, LG Uplus reported a 3.9 percent year-on-year decline in revenue to 3.69 trillion won, but its operating profit rose 13.1 percent to 344.5 billion won, marking a record quarterly high.
Its enterprise infrastructure business grew 8.6 percent to 464.4 billion won, led by AIDC revenue, which climbed 28.9 percent to 124.1 billion won on increased demand for colocation services that provide data center space and infrastructure for customers’ servers.
LG Uplus' 200-megawatt AI data center is under construction in Paju, Gyeonggi Province, June 5. Korea Times photo by Kim Jin-wook.
Revenue from its solutions business, including AI contact centers and smart mobility, also rose 6.8 percent to 134.6 billion won.
LG Uplus is building a 200-megawatt AIDC in Paju, Gyeonggi Province, with the first facility set to open in the first half of 2027. It plans to invest about 2 trillion won in AIDC infrastructure, while expanding through asset-light models such as leasing and data center design, build and operation services.