SKT vows to expand platform business

SK Telecom CEO Jang Dong-hyun introduces the new platform business plan during a press conference at the company’s headquarters in Euljiro, central Seoul, Thursday. / Korea Times photo by Shim Hyun-chul

CEO expects corporate value to double by 2018

By Yoon Sung-won

SK Telecom (SKT) CEO Jang Dong-hyun pledged Thursday to expand its platform business based on its telecom network and 26 million subscribers.

In his first press conference since he took office in December, the CEO said he will double the combined corporate value of the company, SK hynix and two other affiliates to 100 trillion won by 2018 from the current 54 trillion won.

“SK Telecom’s current value is about 23 trillion won. Assuming that SK hynix will be able to reach the 45 trillion won mark in corporate value, we seek to attain the remaining 55 trillion won,” Jang said. “SK Telecom once held a much greater market cap when we had more opportunities for growth. I believe we can raise the corporate value much higher than the current 23 trillion won if we make our market status and profitability clearer.”

Jang said local telecom companies have been engaged in competitive propaganda over payment plans, handsets and subsidies to lure more subscribers. This resulted in rivals giving negative images about other mobile carriers to customers, causing a decrease in sales and profits, he said.

The nation’s leading mobile carrier has suffered from a drop in performance this year due to expanded marketing expenses. It also lost its 50-percent domestic mobile market share for the first time in 13 years. Amid the negative market environment, the company has been urged to seek new growth engines.

To change the paradigm from supplier-centric business to customer-oriented, the CEO stressed that the company will push ahead with platform business in three segments _ life value, integrated media and the Internet of Things (IoT).

The company plans to include diverse services in the life value platform, aiming at customers with specific needs or preferences such as pet owners or parents with young children. For the integrated media platform, it will provide IPTV and media services optimized for mobile. The company also said it will launch smart home and smart industry IoT services by May.

Jang said the telecom firm will closely work with its subsidiary SK Broadband and the e-commerce affiliate SK Planet, and invite third parties for platform business.

“We need many players in the platform business because there are many things that SK Telecom cannot do by itself. We need to cooperate with other platform operators such as Naver, Daum Kakao and game companies,” he said. “We will start with one or two partners and gradually open to more players and allow customers to make the choice."

Jang said SK Telecom’s platform business will be different from that of over-the-top (OTT) service providers such as Google. The OTT companies provide telecom and media services through the Internet.

“Unlike OTT service and platform operators, we provide services to our subscribers based on the mobile network operation business that we have established,” he said. “The services, as well as how we approach providing them will be fundamentally different. What we plan to do is to integrate separate contents, community and commerce in a single platform.”

Meanwhile, the CEO remained defensive on global business.

“Many telecom companies worldwide do not have a good experience in going abroad,” he said. “We need a new business model other than acquiring a local carrier in an overseas country. We see more opportunities in the mobile commerce and life-value platform businesses. We plan to start small and humble in the global stage.”