SKT expediting global achievements in IoT, O2O

SK Telecom’s global business division head Lee Jong-ho, left, poses with Korean startup 12CM CEO Han Jeong-gyoun, Heima Live CEO Zhou Jianan and Duolabao CEO Chang Dawei after signing a letter of intent on JUNE 21, to establish a local online-to-offline joint venture in August in Beijing. / Courtesy of SK Telecom

By Yoon Sung-won

SK Telecom is pushing to boost achievements in the global market based on its new growth platform businesses such as online-to-offline (O2O) and the Internet of Things (IoT).

Despite its leadership in the domestic telecom market, the company has not been marked for its prominence on the global stage. It expected that such a slump will end as it has diversified its focus on the highly-regulated telecom and network sector to platform businesses with more potential.

“In the past, we had not many global businesses that have recorded eye-catching achievements. But we believe that our new projects overseas will be different,” SK Telecom said in a statement to The Korea Times, Friday.

“We used to enter the global stage mainly targeting telecom markets. But it was not easy to make results not only because such projects require massive investments but also they tend to be stubbornly regulated by governments,” according to the statement.

On June 22, SK Telecom signed a letter of intent with three Chinese partners ― Duolabao, BlueFocus and Heima Live ― and a Korean startup 12CM to establish a joint venture in August, aimed at launching an O2O platform business in China.

Under the deal, the telecom company will hold a 42.71 percent share of the joint venture followed by 12CM’s 35.81 percent and the three Chinese firms owning a total of a 21.48 percent stake.

SK Telecom said the five companies will open the business, headquartered in Beijing, by November this year.

The joint venture will work as an operating agency for O2O businesses to manage corporate accounts on China’s most-used mobile messenger platform WeChat and run promotion programs. Tapping into the strategic collaboration with the three Chinese partners, it will also attract affiliated O2O businesses to provide them with marketing, payment and advertisement services.

In May, SK Telecom has established partnerships in Iran and Indonesia to provide its IoT technologies and services.

The telecom company has signed a memorandum of understanding on May 12 with Iran’s energy ministry and national gas company and separately reached an agreement with an Iranian business ARSH Holdings to provide an intelligent gas metering service in Teheran, based on its energy-efficient IoT technology called “LoRa.”

SK Telecom has adopted the LoRa technology for its IoT services for small devices as it consumes less energy and its modules are cheaper. Last week, the company became one of the world’s first telecom companies to establish a nationwide LoRa-based IoT network.

For the demo project of the Iranian business, SK Telecom will build a LoRa-based IoT network in the Iranian capital city with the national gas company and set up smart gas metering devices at about 5,000 households. It also plans to expand their collaboration to build a nationwide LoRa network in the country while extending the application of the advanced metering infrastructure not only on gas but also in electricity and water supply.

SK Telecom stressed that the Iranian government took the lead in establishing the partnership as it reached out to the company first. Expectations are that the telecom company may generate more than 300 billion won in annual sales if it successfully expands its business targeting 32 million households in the country.

In Indonesia, SK Telecom also signed to an agreement with the country’s state-run telecom operator Telkom on May 12 to cooperate in new growth businesses such as IoT services.

Under the agreement, SK Telecom and Telkom will jointly push for new growth businesses including smart city projects and converged IoT services by tapping into the former’s IoT platform dubbed “ThingPlug” and IoT network based on the “low power wide area” technology. They also plan to establish a Jakarta-headquartered joint venture in the next two years.

The two companies will also develop a cloud-based television service based on the media streaming system by SK Telecom’s wholly-owned subsidiary ENTRIX.