[Concall Summary] SKT with 탈통신 Wings "No Decision on Governance Restructuring... Expanding Ultra-Collaboration"

[Asia Economy Reporters Seulgina Jo and Eunmo Koo] "We are keeping all possibilities open." Despite the impact of COVID-19, SK Telecom, which recorded growth in the 20% range, confirmed that no decisions have been made yet regarding the transition to an intermediate holding company and the restructuring of the group’s governance. The taxi service between T map Mobility, launched at the end of last year, and the global company Uber will officially start in April. Starting with One Store in the first half of the year, subsidiary initial public offerings (IPOs) will also be actively pursued. This year, SK Telecom aims to break the 20 trillion KRW sales mark for the first time in history.

◆ "Driven by Non-Telecom and Pushed by 5G" Strong Performance by SKT... Market Focuses on Intermediate Holding Company Transition

SK Telecom announced on the 3rd that it recorded consolidated sales of 18.6247 trillion KRW and operating profit of 1.3493 trillion KRW last year. Sales increased by 5% and operating profit by 21.8% compared to the previous year. During the same period, net profit rose 74.3% to 1.5005 trillion KRW, influenced by equity method gains from SK Hynix.

The so-called 'untact' (contactless) services gained attention, with new business sectors such as media and security achieving record-high performance, and the core mobile network operator (MNO) business also turning around thanks to the expansion of 5G subscribers. This is analyzed as a result of proactively responding to untact demand and accelerating the shift away from traditional telecommunications. In particular, operating profit from new growth businesses such as media, security, and commerce amounted to 326.2 billion KRW, accounting for 24% of total operating profit.

Yoon Poong-young, SK Telecom’s Chief Financial Officer (CFO), emphasized during the earnings conference call held that afternoon, "We recorded steady growth in every business sector each quarter," and "We have once again updated our record-high performance following last year."

During the call, much attention was focused on SK Telecom’s governance restructuring issues, including the transition to an intermediate holding company, which is effectively considered a deadline this year. CFO Yoon explained, "No decisions have been made yet regarding governance restructuring, including the split," and "We will communicate promptly with the market once decisions are made." He added, "Under the premise of enhancing shareholder value, we have kept all possibilities open and exchanged various opinions with stakeholders," and "If restructuring proceeds, it will aim to increase corporate value and be a plan that satisfies shareholders."

Currently, SK Group’s governance structure flows from the owner family → SK Inc. → SK Telecom → SK Hynix. SK Hynix is a grandchild company of SK Inc. However, if SK Telecom becomes an intermediate holding company, SK Hynix’s status will change to a subsidiary, and the shackles that have hindered aggressive group-level investments and mergers and acquisitions (M&A) will be lifted.

The scenario for transitioning to an intermediate holding company likely involves a spin-off of SK Telecom into a mobile telecommunications business and an investment company. Another scenario mentioned is SK Telecom splitting into an investment company and a business company, with the intermediate holding company (investment company) overseeing the business company, SK Hynix, SK Broadband, and others.

◆ Continuing Ultra-Cooperation... Taxi Service with Uber to Launch in April, Synergy Expected with Amazon

Following the establishment of a five-major business division system as a new growth engine last year, SK Telecom reaffirmed its plan to accelerate its leap to a 'big tech' company by expanding ultra-cooperation with domestic and global companies this year.

The taxi service between T map Mobility, launched at the end of last year, and the global company Uber will officially start in April. Ha Hyung-il, head of SK Telecom’s Corporate 2 Center, explained during the conference call, "The taxi service with Uber will be launched in April," and "Services such as designated driver will be introduced gradually afterward."

Currently, T map Mobility is preparing to grow as an ‘all-in-one (MaaS, Mobility-as-a-Service) operator’ covering public transportation, rental cars, car sharing, and taxis. A joint venture (JV) for the taxi-hailing business with Uber will be established soon. Ha said, "Based on T map, we will grow focusing on five core areas and achieve a corporate value of 4.5 trillion KRW by 2025."

Ultra-cooperation with Amazon will also expand into various ICT areas following the subsidiary 11st. Ha said, "Smooth cooperation between Amazon and 11st will enable us to provide differentiated benefits to customers quickly," and "We expect to create synergy in various ICT areas, including commerce." The cooperation between 11st and Amazon is expected to lead to an expansion of the domestic direct purchase market, currently valued at around 4 trillion KRW.

In the core MNO business, SK Telecom plans to introduce various subscription services not only for its own customers but for the entire nation this year. The strategy is to create a new growth story as an AI platform-based subscription company. CFO Yoon explained, "We want to go beyond telecommunications and partner with various businesses such as education and rental to launch diverse products that customers want," and "We will also link with telecom membership programs." Through this, the goal is to reach 20 million subscription product subscribers and 600 billion KRW in sales by 2023.

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