SK Telecom Aiming for No.1 in Security Experts "Subsidiaries ADT Caps and SK Infosec Merge" (Update)

[Asia Economy Reporter Joselgina] SK Telecom is merging its subsidiaries SK Infosec and ADT Caps. The goal is to grow the merged company into South Korea's number one security specialist with a corporate value of 5 trillion won within three years of its launch.

On the 27th, SK Telecom announced that its subsidiaries SK Infosec and LSH each held board meetings and resolved to merge the two companies. LSH is the parent company of ADT Caps, the second-largest physical security business in South Korea.

Accordingly, SK Infosec and LSH will merge within this year. SK Telecom plans to complete the merger including ADT Caps by the first quarter of next year after going through procedures such as corporate combination notifications, thereby launching a security specialist company.

ADT Caps, which has secured 700,000 subscribers, is the second-largest company in South Korea with sales of 913 billion won last year. Its main business areas are physical security such as unmanned security, unmanned parking, and access control. Recently, it has been leading K-quarantine by providing total quarantine solutions based on artificial intelligence (AI) such as video recognition and fever detection to overcome the novel coronavirus disease (COVID-19).

SK Infosec is the number one information security business in South Korea, with sales exceeding 270 billion won in 2019. Its main business areas include information security consulting, cyberattack detection and security monitoring, and system integration (SI).

Through the merger, ADT Caps and SK Infosec will promote joint R&D utilizing top-level security operation technologies maintained domestically, establishing a ‘comprehensive security portfolio’ tailored to diverse customer needs. The company explained that this will broaden consumers’ choices for security products and services and invigorate the security market.

SK Telecom plans to break down the boundaries between existing physical security and information security industries through the merged company and lead the convergence security industry combined with New ICT. It expects to achieve a corporate value of 5 trillion won within three years.

SK Telecom believes that combining its ICT technology, SK Infosec’s information security platform, and ADT Caps’ state-of-the-art control system and dispatch infrastructure as a physical security business will create a new level of convergence security services.

For example, for general individual customers, it can provide personal information protection services that prevent home CCTV or Wi-Fi hacking along with dispatch security services in case of external intrusion. For corporate customers, it can build ICT access control systems using IoT sensors, intelligent CCTV, and biometric recognition. It can also prevent safety accidents through a convergence control system that protects IT systems and dispatches security personnel when physical external intrusion or hacking risks are detected.

As digital innovation accelerates across all industries recently, the demand for ‘convergence security’ technology that combines physical security protecting assets and people with information security is growing. According to global market research firm MarketandMarkets, the convergence security market, which was valued at $3.9 billion (about 4.33 trillion won) in 2017, is expected to grow to $34.8 billion (about 38.87 trillion won) by 2025.

SK Telecom stated, "From traditional security protecting fixed assets, we plan to innovate and advance security services at all hyperconnected touchpoints including people, objects, enterprises (industries), and society, becoming a strong supporter of digital economy innovation across all industries."

The merged company will focus on ▲personal, home, industrial (enterprise), and societal customized convergence security services ▲AI-based intelligent integrated control system implementation. It also plans to expand its growth pace and accelerate preparations for an IPO in the future.

It will also begin full-scale steps as a global advance base. Starting with China and Southeast Asia, it plans to export convergence security products and services and expand its business worldwide. SK Infosec has maintained a strategic partnership with Vin Group, Vietnam’s largest private enterprise.

Park Jung-ho, CEO of SK Telecom, said, “Through this merger, we plan to raise the level of the domestic security industry by one step and lead the future convergence security industry with innovative security services, platforms, and technologies capable of winning global unlimited competition.” He added, “Through this, we will lead the growth of the related ecosystem as a representative big tech company of South Korea.”