SKT goes up against Kakao for mobility services market share

SK Telecom CEO Park Jung-ho speaks at a shareholders' meeting where the decision was made to set up a new corporate body for mobility services, Nov. 26. / Courtesy of SK Telecom

By Kim Bo-eun

All eyes are on SK Telecom's new mobility unit that launched, Tuesday, given it is set to engage in a fierce battle for market share with Kakao mobility.

The new corporate body is headed by Lee Jong-ho, who headed mobility services at SK Telecom. Members of the firm are comprised of employees who had been in charge of mobility services at the telecommunications company, as well as newly recruited members.

T Map Mobility will develop a platform offering car sharing, cab hailing and chauffeur services as well as parking information and payment services. T Map is SK Telecom's version of Google Map and the company offers an automotive navigation system based on the map.

In addition, T Map Mobility will offer in-car information and entertainment services developed by SK Telecom, which include artificial intelligence (AI)-based voice recognition, music streaming and mobile payment services.

In the longer term, T Map Mobility is seeking to build a data system for flying cars that will take passengers from Seoul to Gyeonggi Province within 30 minutes. It plans to start with creating 3D maps and then develop a transport control system for smart flying vehicles. The company plans to develop navigation services built on AI and 5G technologies.

“The new company will start with focusing on expanding the existing taxi hailing service and introducing chauffeur services next year,” an SK Telecom official said.

“Separate applications that exist for cab hailing, parking information and data on public transportation will also be integrated into one T map app, and UI and UX will be improved so that users can access all mobility services on a single platform.”

The idea is to enable users to sign up for taxi hailing, car sharing and rental car services as well as electronic kickboards on the platform and offer discounts when multiple services are subscribed.

Uber stated plans to invest $50 million in T Map Mobility. SK Telecom and Uber have also partnered to establish a joint entity next year, in which the latter invests $100 million. The joint venture will offer ride hailing services with Uber vehicles.

“The joint venture will utilize Uber vehicles and existing cab hailing services will continue to connect users with partner taxi companies,” the official said.

SK Telecom aims to bring up T Map Mobility's annual sales to 600 billion by 2025 and boost the company's worth to 4.5 trillion by then. SK Telecom plans to take T Map Mobility public as early as next year.

The decision to set up a new affiliate in charge of SK Telecom's mobility service was reached at a board meeting in October and approved at a shareholders' meeting last month.

"Transportation is one of the areas where key expenditures are made, along with food and living costs, and mobility takes up the largest part of our lives after mobile services," SK Telecom CEO Park Jung-ho said at the shareholders' meeting. "The decision was made to launch a firm specializing in mobility services to innovate the way people and objects move based on the ICT of SKT, creating a stir in the ecosystem of mobility services."

T Map's expansion is set to intensify competition with Kakao. Currently, T Map holds a 55 percent market share in mobile navigation services with 13 million monthly active users, and Kakao 20 percent. But in cab hailing services, Kakao takes up about 80 percent market.

T Map Mobility caused a stir in the industry in recent months as it sought to recruit staff from rival firms.

T Map Mobility is the fifth pillar of SK Telecom, which is seeking to transform from a telecommunications company into a global firm in ICT. SK Telecom is also expanding businesses in media, security and e-commerce.