Tech & Gadgets

SK Telecom Q2 Profit Soars: AI and 5G Drive Growth

by Philip Lee

Updated August 10, 2024

Seoul, South Korea - South Korea's largest mobile carrier, SK Telecom (NYSE: SKM), reported a 16% year-on-year increase in second-quarter operating profit, driven by growth in its mobile and enterprise businesses.

Operating profit for the April-June period rose to KRW 537.5 billion (US$393 million) from KRW 463.4 billion a year earlier.

Revenue grew 2.7% to KRW 4.42 trillion (US$3.23 billion).

SK Telecom's enterprise segment emerged as a key growth driver, with revenue surging 11% year-on-year to KRW 434.2 billion (US$317 million).

This growth was primarily fueled by increased data center utilization and a rising number of cloud service orders.

The company's data center business alone recorded a 20.5% year-on-year revenue growth, signaling strong demand in the enterprise market.

"We will enhance profitability and efficiency by consolidating our fixed and wireless businesses performance and will showcase our progress as an AI company in the second half of the year," said Kim Yang-seob, CFO of SK Telecom.

In a strategic move to capitalize on the burgeoning AI market, SK Telecom announced a US$200 million investment in SMART Global Holdings (SGH), a U.S.-based designer of high-performance enterprise solutions.

This partnership aims to transform SK Telecom's existing data centers into AI-optimized facilities, positioning the company to meet the surging demand for AI infrastructure.

SK Telecom secured 16.23 million 5G subscribers by the end of June, with 5G customers now comprising over 70% of its total user base.

The company plans to scale up its AI cloud business significantly after securing its first order from domestic internet service providers in the second quarter.

SK Telecom maintained its quarterly dividend at KRW 830 per share.

* US$ 1 = KRW 1,367.96