SKB Data Center's Third Largest
Visiting Bundang Center to Convince Local Residents... Approval in June
SK Broadband has broken ground on its sixth data center (DC) in Yangju, Gyeonggi Province. It is the third largest among SKB's data centers, accelerating growth in the business-to-business (B2B) sector by expanding data centers in key metropolitan areas.
Since the 25th of last month, SKB has started construction of a three-story data center in Ganap-ri, Gwangjeok-myeon, Yangju. Currently, groundwork is underway.
The Yangju DC has a total floor area of 12,301㎡ (approximately 3,721 pyeong) and consists of three floors. SKB currently operates five data centers in Gasan, Seocho, Ilsan, Bundang, and Bundang2. In terms of size, Yangju DC is the third largest among the six data centers, following Gasan and Ilsan. It is scheduled for completion by November 2024.
SKB applied for a data center construction permit from Yangju City in November last year, but faced opposition from local residents. Concerns were raised about noise generated by the 24-hour operation of the data center and electromagnetic waves caused by the installation of high-voltage power lines. The Yangju City Council unanimously adopted a resolution in December urging the withdrawal of the Yangju data center construction. SKB is not alone in facing difficulties due to local opposition; Hyosung Group's Hogye GDC Data Center has been stalled for over two years, and Naver relocated its site from Yongin to Sejong.
However, SKB received construction approval from Yangju City on June 20 and began work. An SKB official said, "We held several meetings and briefings to persuade local residents, and the atmosphere changed decisively after local residents and officials visited SKB's Bundang DC." The Bundang DC demonstrated that there is no noise despite being adjacent to officetels.
The reason SKB has invested effort in the Yangju DC is that data centers have recently emerged as a major revenue source in telecommunications companies' B2B business. Demand for data centers has surged due to the generative artificial intelligence (AI) boom, such as ChatGPT, and rapid digital transformation. Once customers are secured, stable revenue can be generated. Before completing construction of the Pyeongchon2 Center in May, LG Uplus planned to acquire new sites for data centers and reported this to its board, with telecom companies competing to expand their data centers.
The Yangju DC is significant because it is located in the metropolitan area. Being near Seoul is advantageous for attracting customers, but new construction is difficult due to overcrowding of data centers and limited power supply in the metropolitan area. With the smooth commencement of construction at Yangju DC, SKB's B2B revenue expansion is expected to accelerate. SKB's data center sales in the second quarter reached 49.4 billion KRW, a 33.2% increase year-on-year. The US market research firm Arizton forecasted that the domestic data center market will grow at an average annual rate of 6.7%, expanding from 5.03 trillion KRW in 2021 to 8 trillion KRW by 2027.
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