Yoo Young-sang SK Telecom CEO "Will Pursue Strategic Mergers and Acquisitions"

2025 Sales Target of 23 Trillion Won, Aiming for Stability and Growth
Fair and Convenient Policies Needed for Additional 5G Frequency Allocation

[Asia Economy Reporter Lim Hye-seon] Yoo Young-sang, CEO of SK Telecom (SKT, photo), stated during the 2021 Q4 earnings conference call on the 9th, "Our sales target for 2025 is 23 trillion KRW," adding, "We plan to expand the revenue share of media, enterprise, and AIVERSE (a combination of AI and Universe) businesses from 18% last year to 36%."

SKT announced on the 9th that it recorded consolidated financial results for 2021 with annual sales of 16.7486 trillion KRW, operating profit of 1.3872 trillion KRW, and net profit of 2.419 trillion KRW. Through balanced growth across all business areas, consolidated sales and operating profit grew by 4.1% and 11.1% year-over-year, respectively. Net profit increased by 61.2% year-over-year to 2.419 trillion KRW, driven by equity-method gains from SK Hynix.

"Each of the Five Business Groups Will Be Recognized for Their Corporate Value"

Declaring its transformation into an AI & Digital service company, SKT has designated this year as the inaugural year of the SKT 2.0 era and a year to prepare for the next decade. SKT has redefined its business around five core groups: ▲wired and wireless communications ▲media business ▲enterprise business ▲AIVERSE ▲connected intelligence. Regarding the fundamental reason for dividing into these five groups, CEO Yoo Young-sang said, "It is to properly recognize the corporate value of each business group."

CEO Yoo stated, "From a company connecting people to people, we will become a company that expands customers' time and space in the era of AI and the metaverse universe, continuously discovering businesses that enhance customer and shareholder value to achieve both stability and growth." Currently, wired and wireless communications account for 82% of sales with a growth rate of about 3%, while growth businesses represent 18% of sales with a growth rate of approximately 15%.

Regarding the net increase in 5G subscribers by 2025, he responded, "It will exceed 8 million." As of January, SKT surpassed 10 million cumulative 5G subscribers. The metaverse platform (ifland) exceeded 1.1 million monthly active users (MAU), with an average session time of 61 minutes, showing meaningful results. CEO Yoo said, "We aim for over 30 million global MAUs by 2025," adding, "We will be recognized as a new platform, establish an open content platform and economic system this year, and pursue overseas expansion." He also mentioned that the AI agent, a character-based conversational AI service aiming to offer unprecedented new services, is currently under development with a planned release this year.

"We Will Pursue Strategic M&As in Three Directions"

Regarding this year’s total dividends, he emphasized, "We will maintain at least the level before the SK Square spin-off," adding, "In the mid to long term, we presented 'EBITDA (earnings before interest, taxes, depreciation, and amortization) minus CapEx'; we expect EBITDA to increase while CapEx will either decrease or be maintained, providing room for dividend growth."

Additionally, CEO Yoo said SKT plans to pursue strategic mergers and acquisitions (M&A) in three directions: acquiring companies related to AI and metaverse technologies, acquiring teams of developers, and acquiring companies to support global expansion of its own services.

SKT also plans to develop a joint platform with SK Broadband to grow its advertising business as a new growth engine. However, CEO Yoo stated, "Since SKT and SKB have effectively become one system with increased synergy, we are not considering corporate mergers or changes in governance structure."

Presidential Election Impact? Focus on Nationwide Network Expansion and Digital Investment

Regarding the controversial issue of additional 5G frequency allocation in the telecom industry, he stated, "From the perspectives of public convenience and fairness, rather than allocating only 20 MHz, it is more appropriate policy to allocate three bands of 20 MHz each simultaneously to ensure both public convenience and fairness."

On the impact of the presidential election, CEO Yoo explained, "I believe the burden of telecom fees is being alleviated through the growth of MVNOs and discount programs such as selective contracts," adding, "Overall telecom policy seems to prioritize early nationwide 5G network deployment and investments in national infrastructure like data centers." He continued, "Telecom operators also intend to focus policies on nationwide network expansion and digital investment." In line with this, SKT plans to maintain its 5G base station investment at last year’s level and continue efforts to improve quality. CFO Kim Jin-won said, "SK Telecom spent a total of 3 trillion KRW on facility investments last year," adding, "Since a key goal of these investments is to maintain communication quality for 5G customers, similar levels of investment will be necessary this year as well."

This content was produced with the assistance of AI translation services.