SK Telecom tries to boost its future

SK Telecom CEO Jang Dong-hyun describes the telecommunication provider’s new business strategy on Thursday at company headquarters in central Seoul. Provided by the company

In face of dwindling market share and fast-changing technology, SK Telecom, the country’s top telecommunications provider, announced a set of new initiatives on Thursday to establish itself as a platform operator, going beyond its traditional role of providing a wireless network.

The move is part of the telecommunication giant’s efforts to pursue new revenue streams by connecting its vast customer pool with broader services such as e-commerce, media consumption and entertainment content.

With the plan, SK Telecom aims to achieve corporate value of 100 trillion won ($92 billion) by 2018, said Jang Dong-hyun, CEO of the company. Corporate value means the sum of estimated brand value and total market capitalization.

The new initiative will revolve around three integrated platform services using various mediums such as apps, wireless service and wearable devices.

One of the services, dubbed “Life Enhancement Platform,” is designed to provide content tailored to consumers’ interests, integrating e-commerce, communities and content.

“For example, if a consumer is interested in baseball and enthusiastic about a certain team,” said Huh Gwang, manager of SK Telecom, “we will provide him with a package of services that encompass online shopping malls selling baseball uniforms and memorabilia, online and app-based forums with fellow fans and tour information about where a match is going to be held.”

In offering the broader services, SK Telecom will integrate and further expand services already offered through subsidiaries SK Planet and SK Broadband. SK Planet is responsible for operating an e-commerce platform called 11th while SK Broadband is a fixed line Internet, telephone and TV carrier.

In line with the Life Enhancement Platform, the “Advanced Media Platform” will offer customized media content for its subscribers, reflecting their interests and preferences. SK Telecom wants to offer integrated media content that work seamlessly on different media ranging from cellular phones, smart devices, PCs and TVs.

The business strategy led the company to aggressively promote bundled packages that combine cellular and fixed-line services because integrated products keep customers loyal while reducing marketing expenses.

The last format is related to the theme that creates a lot of buzz in the tech industry: the Internet of Things (IoT). SK Telecom’s IoT Platform Service will combine the IoT into its products and network services. The company said it will launch a Smart Home service that allows users to remotely control home appliances, including dehumidifiers, door locks and boilers via smartphones. The service will run on its platform called Mobius.

The company also has a plan to upgrade the Smart Home service to a Total Home Care service by adding home security functions.

The company’s launch of a wearable pet-care device belongs to IoT Platform Service.

The device, called Petfit, fits on a pet’s collar and delivers information via an accompanying mobile application.

Such wearable devices could be bundled with SK Telecom’s network service in the future.

The announcement came as the company faces mounting challenges and unfavorable market conditions. Its market share fell below 50 percent for the first time since it merged with Shinsegi Telecom in 2002. It reported a 49.6 percent share last month, according to the Ministry of Science, ICT and Future Planning.

The downbeat figure is attributed to stiff competition with other carriers like KT and LG U+ and people’s reluctance to use expensive data plans, following the Mobile Device Distribution Improvement Act, which resulted in surging smartphone prices.

Jang acknowledged harsh market conditions and vowed to navigate around them.

“To overcome limitations facing the telecommunications industry, SK Telecom will actively promote the three Next-Generation Platforms to deliver unprecedented value to customers and build an enriched ICT ecosystem.”

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]