SKT and Deutsche Telekom Establish 5G Technology Joint Venture to Target "12 Trillion Won Market"

Park Jung-ho, CEO of SK Telecom, is taking a commemorative photo after signing the final contract to establish a '5G Technology Joint Venture' through a video conference with Timotheus H?ttges, CEO of Deutsche Telekom (second from the left in the first row of the screen).
[Photo by SK Telecom]

[Asia Economy Reporter Kim Heung-soon] SK Telecom is establishing a 5G technology joint venture with Germany's Deutsche Telekom and is set to target the related market worth approximately 12 trillion KRW.

On the 8th, SK Telecom announced that President Park Jung-ho and Deutsche Telekom Chairman Timotheus H?ttges finalized the contract to establish the 5G technology joint venture (tentative name) through a video conference on the afternoon of the 6th.

The joint venture will be equally owned by the two companies with a 50-50 share, and its headquarters will be located in Germany. Two co-CEOs appointed by each company and four shareholder representatives composed of business and technology experts from both companies will participate in the management. The official establishment will take place within the year after obtaining approval from relevant authorities.

Through the joint venture, the two companies plan to jointly develop leading technologies such as 5G in-building solutions and disseminate the technology to ICT companies worldwide, starting with Europe. In the mid to long term, they also plan to collaborate on app markets, augmented reality (AR) and virtual reality (VR), and mobile edge computing (MEC).

Deutsche Telekom is a global telecommunications company with approximately 240 million subscribers across 13 countries worldwide. In April, Deutsche Telekom's U.S. subsidiary, T-Mobile, acquired and merged with Sprint, the fourth-largest U.S. carrier, significantly expanding its business scale.

Successful 3-Month Pilot Service in 8 German Cities
Targeting Approximately 12 Trillion KRW Market in 2023

SK Telecom and Deutsche Telekom optimized the '5G/LTE RF repeater' developed in Korea for the European market in the first half of this year and conducted a pilot service targeting actual customers from August to October in eight major German cities (Berlin, Hamburg, Bonn, Cologne, Munich, Frankfurt, Leipzig, Darmstadt). Based on the pilot service results, the joint venture plans to commercialize the upgraded 5G/LTE RF repeater by the first half of next year.

According to global market research firms, the worldwide in-building solutions market targeted by the SK Telecom and Deutsche Telekom joint venture is expected to reach approximately 10.33 billion USD (about 11.62 trillion KRW) in 2023 and grow at an annual rate of about 10%.

To secure market leadership through rapid technology development, the two companies successfully completed technology verification and customer pilot services in Korea and Germany despite the COVID-19 pandemic. During this process, they also established untact (contactless) solutions and remote support systems, presenting a global cooperation model.

SKT Expects Royalty Income from Core Technology + Global Joint Expansion with Domestic SMEs

SK Telecom will provide about 100 technology assets prepared over several years to the joint venture and receive royalties proportional to sales. Additionally, it can expect dividends based on the joint venture's performance. Through the 5G technology joint venture, SK Telecom anticipates co-expansion with Korean small and medium-sized equipment companies into Europe and other regions, spreading Korean 5G technology.

Park Jung-ho, President of SK Telecom, said, "In the post-COVID era, the two companies will serve as a bridge connecting Asia and Europe and jointly consider technologies and services that provide new value to humanity." Timotheus H?ttges, Chairman of Deutsche Telekom, emphasized, "We are now able to develop new and innovative products that enhance customer experience together with SK Telecom. The joint venture will start with repeater technology and move toward much larger goals, creating significant innovation for both companies."

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